The Tribune

 By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net

A CABINET minister has said a recent IMF report on housing affordability and home ownership issues has “validity”.

Minister of Housing and Urban Renewal Keith Bell was speaking after the release of the report which said the supply of new residential housing in The Bahamas has declined ever since the 2008-2009 global recession, shrinking to a low of 607 unit completions in 2023.

Mr Bell said the Davis administration is working to combat this issue through a “very aggressive” construction programme on New Providence and other Family Islands especially ones affected by Hurricane Dorian.

“I do believe that there is validity and what the IMF is reporting in the respective housing report. Obviously, we have not met our targets. And I think that I have said in several media presentations that we are approximately 12,000 housing units short in the country,” said Mr Bell

“What this government is doing is we have reversed the policy of the former administration, and who adopted a position that they would not build any homes, and we have started the construction, a very aggressive construction programme in the country. We are looking at building homes in a number of islands, particularly those that were ravaged by Dorian and also New Providence, where most of the population lives.”

He said the government is also making homes available for low income people through the rental assistance programme and several government rental units will be renovated for low income residents to reside in before moving into their own homes.

“We’re looking at building homes through our government Rental Assistance Programme, the rent to own programme,” said Mr Bell.

He also cited a government rental programme, saying: “The government has some about 50 or more units in different locations here in New Providence, where are persons actually rent government rental units. And the idea is to ensure that we put persons in the rental units for a period of time, and then they eventually go into their homes. And so we are now, if you were to go in several areas, and you’re going to see a very aggressive strategy by this government to renovate, ensure that we up the standards of those units, and then we’re looking to bring people out of those units and put them in their own homes.”

He said a difficulty that many persons face when trying to become homeowners is their high amount of debt and high closing costs.

To combat this, Mr Bell said his ministry is working along with a number of commercial banks to lower these costs and educating consumers on debt management.

“First of all, the rate of consumer borrowing, the debt, the consumer debt, is far too significant in the country. And what has happened is you would find that many of our clearing banks, they would they’re very quick to give persons loans for cars. As a matter of fact, you really don’t need a down payment, and when you want to get a home, the closing costs are so significant that is very there are some challenges,” said Mr Bell.

“But we’re working with our clearing banks as well as we’re working with the consumer to ensure that we’re educate them to begin to stop getting into this heavy consumer borrowing, which is a sadden on them when they really are trying now to get a home.”

He said they are also hoping to work with the banks to find financing solutions that would clear the interest on distressed properties so individuals that have lost their residences can regain them,

“I believe that a significant part of the population are heavily indebted with consumer debt, and how do we now begin to pull them up out of it? A number of the clearing banks have very large distress lists. And what we are hoping is to work with these banks where we able to keep people in their homes, as well as look at these distress lists that if they able to forgive the interests, then be able to recoup those homes and put people back in their homes,” he explained.

On the high rental costs, Mr Bell said while they are going to look at the Rent Control Act to see what adjustments can be made rising inflation and insurance costs have driven up the cost of owning a rental property and landlords have had to adjust their rent accordingly.

“We have to look at the Rent Control Act to determine what provisions we need to amend and how we’re going to adjust it. But you would appreciate that the reality is that inflation is really significant today,” said Mr Bell.

“Interest rates have gone up, the cost of insurances because we live in a hurricane belt. And for many years, sometimes even before Dorian, we would have seen significant rates of increase in insurance, because when there is a catastrophic event anywhere else in the world, it impacts us. And so, when you’re talking about you have an apartment building and you have to insure it, you’re looking at $2,000 to $4,000 for insurance alone. And when you look at maintenance and upkeep because building materials, everything has gone up.”