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‘Housing plan a noble one - but it needs to be wider’

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Gowon Bowe

By LEANDRA ROLLE

Tribune Staff Reporter

lrolle@tribunemedia.net

A TOP banker yesterday described the government’s recently announced housing programme for young Bahamian professionals as a “noble” initiative but said there needs to be a wider “comprehensive plan” for promoting land redevelopment in the country.

Gowon Bowe, Fidelity Bank Bahamas’ chief financial officer, told The Tribune officials must ensure the plan is feasible and does not add to existing economic issues being experienced in the country.

His comments came after Prime Minister Dr Hubert Minnis gave notice in the House of Assembly on Wednesday night that a resolution to develop an affordable “upscale” community for young people in the western area of New Providence will be debated at Parliament’s next sitting.

Mr Bowe said the announcement was a “very surface level communication” that provided no details on how officials plan to execute such an initiative.

He said: “I think the initiative is certainly one that is noble and is commendable thought process in terms of what ideally would like to be done because it is looking at ‘how do I grant land ownership to young professionals,’ but I think we should have a much wider land policy or redevelopment policy.

“Because when we use Crown land, it then will negate their ability to use that land for other purposes. Secondly, there needs to be a very balanced empirical study to say will persons be able to — while they may be able to qualify to purchase the homes — will they qualify to be able to build in two years and if not, is there a recourse?

“And will this then revert to the government and if they commence borrowing, when they run into difficulties is the government providing a recourse or guarantee behind them in order to provide some assurance?

“So, there needs to be a comprehensive plan and ultimately, we have to be more deliberate in the initiatives and the programmes we want to implement.”

Before officials move to execute such an ambitious programme, Mr Bowe said the government also needs to address some of “the broader structural deficiencies” long spoken of by the banking industry.

He said: “What I mean by that is the Bahamian economy, in particular New Providence, has a tremendous amount of distressed properties that have borrowers and tenants that are unable to meet their commitments and if you will, I’m going to say clogging the banking system.

“Because ultimately, when I have a portfolio of distressed loans where payments are not being made and then it means that I’ve not freed up those loans by being able to sell them and so certainly, in a recommendation I made directly to the Prime Minister himself and the Mortgage Corporation and others has been to why not consider the funds that are available to government in the form of being able to acquire these distressed properties?

“There naturally would be an ability to negotiate a price because with the liquidity in the market, the financial institution that you yourself would see it by all the distressed properties that are listed, we’re not seeing active movement because people are not qualified which is a vicious cycle so, if you find that you’re able to start clearing some of that backlog, it has several positive contributors.”

He said one such benefit is that it will “clear up the legacy loans”.

He said the move could also help boost economic activity in the construction industry.

“I would encourage the government to look at having a very confined programme that looks at redevelopment which will mean that a lot of these properties, because they’ve been in this current state for a while, have started to (become) dilapidated and you would be able to reinvigorate the construction industry and being able to start pumping money into it,” he added.

Asked if the commercial banking industry will support the housing programme if the resolution is passed, Mr Bowe replied: “I can’t speak across all of the banking industry but…All banks have significant portfolio of non-performing mortgage loans. We see it at the Central Bank’s monthly reporting and so when you have a significant amount of non-performing loans, remember or more important, be aware of what that means.

“That means there is a significant amount of money that has been lent but has not been collected so that is cash resources that are now not available to do other things and so while that bottleneck continues to exist, then it has nothing to do with a willingness to lend into this particular initiative. It boils down to the where does the capital or the money going to come from?”

Dr Minnis has promised more benefits and details of the plan will be discussed during the debate in April.

Comments

BONEFISH 1 year, 6 months ago

The lack of affordable, decent housing is a major issue in this country. Many persons at the lower level in this country can barely afford the down-payment for a single family home on this island. Add to that the high closing costs of real estate transactions.

If you drive through certain communities on New Providence, there are sights to be seen. Quite a number of closed up homes rotting down. Some of these homes were repossessed by banks or the owners passed away. Also a next thing that defers people from purchasing those homes is the high cost of renovations. Renovating homes in this country is both expensive and time consuming.

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The_Oracle 1 year, 6 months ago

Cost effective low income housing has been a dismal failure since Pindlings day. Remember the round houses on Harrold road? Let's face it, government cannot do anything properly, never mind cost effectively.

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TalRussell 1 year, 6 months ago

Some $9.8 million spent for the prefabbin' of 300 Domes but less than 38 have been occupied by Abacoian families. Well, yes, and half of the 38 is submerged underwater.

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sheeprunner12 1 year, 6 months ago

How many more Elizabeth Estates and Yellow Elders can be built in Nassau???? ......... God forbid, if we build any more Pinewood Gardens ......... only Carmichael Road has open space

Just build a few housing subdivisions in the Family Islands as PPPs ......... Prospect Ridge is no Yellow Elder, so what if its marketed to a bit more upscale Bahamian class???????

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