While State housing is highly-subsidised to allow middle and low-income earners a chance to own a home, Housing and Urban Development Minister Pennelope Beckles said delinquent tenants owe the Housing Development Corporation (HDC) $130 million.
Beckles revealed this at a key distribution ceremony at the new Lexus Villas in Marabella yesterday; the first public event of its kind since COVID-19 restricted gatherings last year.
She said the HDC made significant headway in increasing its revenue streams through debt collection, sales and mortgage conversions. However, more still needs to be done, as it remains a major revenue source for the HDC.
“As it stands, the HDC is currently owed approximately $130 million by way of delinquent tenants and homeowners which needs to be addressed. The HDC also needs to pursue its mortgage conversion and sales programme.
“Because if we are to look at the potential of revenue sales just from the units being distributed today, we will see that the HDC stands to collect approximately $16 million from revenue sales where mortgages have been closed and $12 million under the LTO arrangements once the sites are closed and the properties converted to mortgages,” Beckles said.
Last year, the HDC granted a moratorium on payments for tenants who suffered job losses or loss of earnings due to the government’s COVID-19 restrictions. Beckles said granting another would be something for the government to consider if necessary, given the economic climate. She said tenants are asking a lot from the HDC, especially for refurbishment. If the HDC could collect the $130 million in arrears, she said it could do a lot more for tenants.
HDC chairman Noel Garcia said that HDC is stepping up its efforts to collect outstanding debts, but is aware of the challenging time.
“We are urging our tenants, our mortgagees to come in a have a discussion with us. Just do not stop paying. We are prepared to work out a monthly payment plan and we are prepared to listen,” Garcia said.
The Lexus Villas is a gated community comprising 102 townhouse units. The three bedrooms, two-bathroom homes cost $795,000 for middle-units and $825,000 for end units with monthly instalments around $3500. The project began in August 2017 and ended in September 2020. The HDC also distributed keys for homes in Freeport, Chaguanas and other areas.
Beckles said despite COVID-19’s impact on the construction sector, the HDC plans to build more than 2000 units this year, in addition to completing those already under construction.
These include units currently being built under the Small and Medium Contractors Housing initiative (SMCHI), Public-Private Partnership arrangements, the Housing Construction Incentive Programme and the Infrastructure Development Fund (IDF).
While homeownership is in great demand, Beckles said that approximately 83 per cent of applicants on the HDC’s housing database earn $9,000 per month or less. Despite their desire to acquire their own home, they cannot afford the cost. Therefore, the government subsidises the cost of State housing.
Beckles said that in addition to subsidising the cost of the land, development and infrastructural costs, and the cost of mortgages, the Ministry decided to use small and medium contractors in the housing construction sector. It was a way to encourage competitive pricing and keep construction costs down to a reasonable limit.