Latest update April 23rd, 2024 12:59 AM
Oct 12, 2014 News
By Leonard Gildarie
The past week has been a rather good one for me in terms of moving Guyana forward.
It has long been known that consultation with stakeholders – the pooling of ideas and meaningful discussions – is a critical way of advancing initiatives and paving the way for development.
Through these weekly columns, and with the comments and valuable advice from our readers, we have been pushing for initiatives that encourage affordable housing. Who wouldn’t like to save money? Who wouldn’t want to ensure that the money they would have borrowed and saved is spent wisely?
During the past week, one of Guyana’s foremost non-governmental organisations, Habitat for Humanity, facilitated a panel discussion on affordable housing. Housing, they emphasised, is linked to poverty and by reducing the cost of housing, the lives of citizens become less burdened.
Habitat extended an invitation to me to be part of the panel. Of course, I refused. I am no expert. I write of my own experiences. What could I tell Guyanese on affordable housing? But Habitat insisted that I take part. They were convinced I knew enough, and would not take no for an answer. So it was with some amount of trepidation that I turned up at Theatre Guild in Kingston.
My spirits sank even lower when I saw the other panelists. It included eminent Professor Clive Thomas, a long-standing business columnist and UG lecturer; Jennifer Cipriani of Scotiabank, and Habitat’s National Director, Rawle Small.
There were several students present, and the gathering also included representatives from Europe and other organisations.
Habitat is no stranger to Guyana, helping hundreds of families unable to access mortgage financing to be able to afford low-cost homes. They have been here for two decades. Telephone company, GT&T, was there also, making a $1M donation that will go towards making a special 20th Anniversary Home which is to be given free to a family in need.
Habitat’s intention was clear. Guyana should look at more alternatives to low-cost housing. From my perspective, it will take a number of measures. We need low-cost materials. Like I said before, we have construction materials made right in Guyana. Lumber is available. We need incentives that will push for manufacturers to develop cheaper materials. These incentives can include tax breaks or concessions for manufacturers.
During the discussion, I also urged for the financing institutions like the commercial banks and NBS, to conduct workshops with its customers before doling out those millions. While there is a cost to those workshops, ways can be found to pay for them. However, the workshops will be key to help first-time home owners manage their money and even teach them to shop smart and not be conned by contractors.
Significantly, Habitat itself had initiated research by a local consultant to explore housing finance and its impact on poverty. While the full report is still to be completed, Habitat managed to release the summarized highlights.
According to Habitat, there is a universally accepted right that citizens are guaranteed housing. But adequate housing is not a mere four walls and a roof…it must meet conditions such as security of tenure; be affordable; be available; be accessible and there must be cultural adequacy.
Habitat also explained that affordable housing is generally considered to be housing which meets the needs of households whose incomes are not sufficient to allow them to access appropriate housing in the market without assistance. Affordable housing is housing that tries to meet the pocket of those who fall below the median income.
A major area being examined in the report is “housing stress.” Habitat says that it is a threshold established beyond which it becomes difficult for households. One is said to be experiencing household stress when rent-to-income or housing cost-to-income ratio shows that expenditures are more than 30 per cent of the household’s total income. Families who pay more than 30 per cent of their income for housing are considered cost burdened, because they may find it difficult to afford other necessities such as food, clothing, transportation and medical expenses or saving for their future, and that of their families. I have spoken about this before.
Accessible Housing relates to the scope of households that fall below the medium income category, some of which might not even be bankable (do not have stable income).
According to Habitat, economically weak segments of the population find it challenging to own a home, because of inadequate provision of funds (capital to fund low income housing), and conditions and complexity of access to finance
Access to finance might be restrictive, based on conditions that relate to reliability requirements (proof of formal and regular income of an adequate level to the amount of the loan, necessary personal resources, collateral) and loan terms (loan amount, maturity, interest, and method of payment) which not only make owning a home unaffordable, but also make the requisite finance inaccessible.
Financing options for affordable housing are primarily related to financial architecture – institutional and legal pillars that make affordable housing accessible.
The report that is coming out will also examine some likely models that Guyana can contemplate to adopt.
I saw no Government officials at the forum last week. Habitat says that housing officials were invited, but wanted the full report to come out before engaging.
I want to stop here because there were some other pertinent points raised, including partnerships for affordable housing on the local level. A National Housing Policy was also raised. We have to delve more into this.
Enjoy the weekend and please don’t forget to drop your comments to [email protected] or call weekdays on 2258491 or 6821256.
*For the record, I lost my stage fright after I became animated while talking about how Government should introduce more incentives for manufacturers of local building materials.
LISTEN HOW JAGDEO WILL MAKE ALL GUYANESE RICH!!!
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