By NEIL HARTNELL
Tribune Business Editor
The Government should seize abandoned Over-The-Hill properties for its low income housing programme, a well-known businessman is arguing, rather than employ the “jokey ideas” of Dr Hubert Minnis.
Sir Franklyn Wilson, the Sunshine Holdings chairman, told Tribune Business that dealing with abandoned, vacant properties in such fashion would be a far more effective way of revitalising inner-city communities than the tax breaks proposed by the FNM leader.
He explained that many buildings had fallen into disrepair because of inheritance and estate planning issues, with families failing to properly complete the probate process.
Sir Franklyn argued that the Government should fill the vacuum created by building new homes and buildings on these properties, noting that their sale to new owners would enable the Public Treasury to have sufficient funds to pay families who eventually probated their estate.
He added that Government would also benefit financially from not having to put in infrastructure and utilities because, unlike its new housing subdivisions, these were already in place.
Sir Franklyn was speaking after Dr Minnis last week unveiled more details on his plans to revitalise Over-the-Hill and other inner-city communities through a comprehensive set of tax breaks and concessions.
“We will institute a programme of far-reaching targeted tax initiatives to help stimulate business Over-the-Hill and in inner city communities,” he told the FNM campaign rally at Christie Park.
“We will help the people in the inner-city to invest in their own communities by using the tax code to spur jobs, economic activity and investment.”
The tax breaks an FNM government would implement would include the duty-free importation of construction materials for residential and commercial properties; no Business License fees or real property taxes; no taxes on household furniture; no taxes on capital goods and business equipment “after proper vetting”; and lower import duties on business vehicles.
Dr Minnis’s strategy appears to have been borrowed from the late US president, Ronald Reagan, who employed tax-free areas, known as Economic Enterprise Zones (EEZs), in a bid to attract businesses to revitalise depressed American inner-cities in the 1980s.
However, monitoring these ‘tax breaks’ to prevent fraud and evasion by those not entitled to them is likely to present difficulties for the Customs Department and other relevant agencies.
Family members living outside the ‘inner city’ may seek to evade due taxes by importing furniture through relatives who do live there, for example, with businesses also seeking to employ similar tricks.
Apart from the problems of ‘policing’, further issues relate to who will be eligible to receive such tax breaks, as not all ‘inner-city’ residents are poor or low income. And then there is the question of how to define ‘inner-city’ areas.
“In terms of Over-the-Hill communities, that sounds populist,” Sir Franklyn said of Dr Minnis’s tax plans. “The fact of the matter is there are pockets of poverty in pretty much every community you can point to in this country.
“It may sound strange, but the late George Damianos was giving me a ride down Eastern Road, and was pointing out poverty in terms of housing on Eastern Road.
“When you talk about assisting poor people, that’s not limited to a geographical area. You’ve got to be scientific about it,” he continued.
“You can’t say all people in Ross Corner are poor, and can’t say all the poor people in the Bahamas live Over-the-Hill. You can’t say these things. Public policy needs to be more thoughtful, in my view.”
Sir Franklyn then recommended housing initiatives as an alternative to Dr Minnis’s tax breaks, suggesting they would have a bigger impact by repopulating and bringing life back to inner-city communities, as well as improving the environment.
“If you want to do something for Over-the-Hill areas, if you want to revitalise Over-the-Hill, I recommend any Government of the Bahamas to this as policy,” he told Tribune Business.
“There are a lot of properties that are vacant. They are vacant because of problems of inheritance. Houses are in disrepair because estates have not been probated properly. It’s a result of abandoned properties because of the lack of probate.”
Sir Franklyn said there were “hundreds, if not thousands” of inner-city homes and lots afflicted by these problems. As a result, he suggested that the Government build new homes on these properties.
“If the people owning the land ever probate the estate, the Government can pay them for the land,” he told Tribune Business. “And if they ever do come forward, the money will be in the Treasury to pay them.
“You could build a large number of houses without having to spend a fortune on infrastructure because the infrastructure already exists. That will revitalise Over-the-Hill far more than these jokey ideas of Minnis to give free furniture.”