The decision of the Ministry of Housing to construct townhouses and duplexes is an indication of the level of stifled thinking within APNU+AFC. The coalition government has flattered to deceive when it comes to injecting new thinking.
The coalition desperately wants to look and appear different from the PPPC, but it seems that the only original thinking that the coalition is capable of at the moment is to recede into the past, and impose policies and initiatives which have failed this nation.
The PNC had a housing programme which provided a lot of houses for its supporters. But there were serious problems with the low income housing schemes which it established. These schemes were virtually turned into slums. The range houses that were constructed festered overcrowding. The areas in which these houses were located remained low income. For this reason, the properties did not appreciate. It also led to the exodus of middle class persons from surrounding areas, since the values of their properties fell as a result of this same idea of having townhouses and duplexes built by the government for low income public servants.
The government has not explained how it intends to manage the 700-odd townhouses and duplexes which it plans to construct. It has not said how the beneficiaries will pay for the townhouses and duplexes. But it can be reasonably deduced that, in keeping with past practices under the PNC, the government will build the housing units, allocate it to its supporters who will then be required to repay a monthly sum to the Ministry until such time as the cost is repaid.
This is where the problem lies. Past experience has shown that when people have to pay government for housing, they do not pay. As such, the arrears mount up, and what ends up happening is that the housing units end up being gifted to the owners.
This is the danger of the billion-dollar duplex and townhouses project. If the government spends the money, there will be no incentive for the beneficiaries to repay. They know that government is not inclined to eject them into the streets, since this will lead to a loss of popularity by the government. And so what the housing projects end up becoming is free housing for the poor.
This may seem like a good thing, but it is not. All over the world the “projects”, as they are known, become unsafe neighbourhoods. The value of real estate declines and the dwellers invariably do not have titles or transports, and even when they do, the decline in property values render it useless for collateral purposes. Home ownership, rather than helping the dwellers, actually ends up obstructing them from improving their lot.
There are many existing homeowners who are asking where the townhouses (ranges) and duplexes are going to be erected. They are afraid of the effect of such housing units on their own properties. They will move out of any area where the property values are degraded.
This is why, while the intention of the government to help low income earners may be a good thing, the construction of duplexes and townhouses is not the way to go.
A housing model does exist which has helped to improve the lot of the poor. That model is to give poor people subsidized land, keep the interest rates for housing loans low, and reduce taxes on construction materials. It is true that these measures also benefit the rich, but once the land gets into the hands of the poor, the poor can build their own homes and expand over time.
Unfortunately, that is the very model that the PPP used to provide housing to over 70,000 families. And it is the very model which the new government wants to distance itself from.
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