Latest update March 29th, 2024 12:59 AM
Jun 22, 2014 News
By Leonard Gildarie
A few readers have raised what I believe is an important issue. I have spoken about it before but not in any great detail. Would it be better to rent a home than to go through the headache of owning one?
For me…it is a resounding yes. I have kids and would like to leave them something. I like the idea of walking in my own home. It feels good. There is another good reason for owning a home. It represents value. You can take it to the bank and raise financing for a shop or business. In other words, it increases your worth. It is part of what I call the Guyanese dream.
However, the sad reality is that not everyone could afford to own a home. It takes money. That comes either if you are saving for years or have taken a mortgage. It can also happen if you are well-off or have generous family overseas. There are many families who will find it difficult to qualify for a mortgage because of their low-paying jobs or absence of the steady, legal one.
You would need money to pay the monthly mortgage and expenses and cater for maintenance.
The Ministry of Housing, through its operation arm, the Central Housing and Planning Authority (CH&PA), has introduced the Core Homes in certain communities. These are the small V-roof wooden homes that can come partly concrete. They are easily recognizable. I know in La Parfaite Harmonie, West Demerara, where I live, there are quite a few of them. The homes are less than $2M and are for vulnerable families.
In any housing drive being pushed by Government, the policy makers have to cater for families who under normal conditions will never have an opportunity to own one. Those Core Homes were meant to fill one such gap. There are also a number of homes being built by CH&PA in the Eccles to Herstelling areas, East Bank Demerara, that are geared to attract persons from the so-called low incomes for about $4.7M to $18M for the professionals.
There is a whole point to this. The housing policy has to include measures to cater for the “vulnerables”.
I lived in St Maarten, Netherlands Antilles, for six years. There was an area there called Belvedere. Several duplexes were built by Government under a special programme to cater for families that had no means to own one otherwise. The duplexes are basically apartment homes in one building. While not on the same quality of normal homes, the duplexes were controlled by a foundation that collected rent. Of course, there were cases of non-payments. The foundation has reportedly introduced measures that allow the renter to buy out the apartment after years of occupancy.
While St Maarten’s limited land space has forced policy makers to come up with innovative ideas, the Guyana situation may be a little different. I am not so sure that enough data exists that will demand an initiative similar to what prevails in St Maarten.
Maybe a smart developer will come up with a plan to build scores of low income homes that can cost below $5M. I think it will work. It will of course hinge on the availability of lands.
Government has already said none is available on the East Coast and East Bank of Demerara.
In neighbouring Brazil, currently in the throes of the World Cup, the ‘Minha Casa Minha Vida’ (My House, My Life) was launched by the government in March 2009 with a budget of R$36 billion (US$18 billion) to build one million homes. This works out to about US$18,000 (G$3.6M) for one. The second stage of the programme was announced in March 2010. This stage reportedly foresees the construction of a further two million homes.
Of course, because of what the finance folks would call economies of scale, the costs would be less.
What is interesting with that Brazil programme is that of the total 3 million homes, about 1.6M are for the low income with about 400,000 for the higher earning families.
The funding for the initiative is provided by the Brazilian public bank, Caixa Econômica Federal. The bank finances development and provides mortgages for qualifying families.
Again, I am not sure whether we need to follow a similar model. We are a nation of around 700,000 persons. However, we may need to start thinking about the long term.
Enjoy the week and don’t forget to continue sending your comments to [email protected] or call 6821256.
THIS IDIOT TELLING GUYANA WE HAVE NO SAY IN THE 50% PROFIT SHARING AGREEMENT WE HAVE WITH EXXON.
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