Review BHC tenant purchase scheme - Saleshando

Gothataone Moeng | Wednesday February 12, 2014 13:43

GOTHATAONE MOENG

Staff Writer

he Leader of Opposition and Member of Parliament for Gaborone Central Dumelang Saleshando wants government to prioritise the re-introduction of the Botswana Housing Corporation (BHC)'s Tenant Purchase Scheme in the 2014/2015 financial year.

The tenant purchase scheme was introduced by the BHC in 1986 and allowed tenants of the BHC to buy houses without seeking financial assistance from banks, by allowing thems to pay monthly instalments towards buying the house instead of paying monthly rental. The scheme is currently suspended.

On Friday, Saleshando argued that the current environment, in which property values have skyrocketed, with many households having reduced capacity to invest in property through financial institutions and in which the economy of the country has improved, is the right time to re-introduce the scheme.

'The scheme was stopped 10 years ago with a promise that it would be reintroduced when the financial situation improves. It's clear that the situation is improving, we have moved from a deficit budget to a surplus budget. We are not likely to return to the situation we were in before the recession,' he said.

Saleshando said that even if the revival of the scheme comes at a cost to the government, in the long term, the government would be better off pushing policies that promote home-ownership.

'As a house is an asset that appreciates in value, an owner can use it as security for other businesses, and if one buys a house in Gaborone and goes back to their home village to retire, they can rent the house to earn an income.'

Saleshando argued that the scheme should be revived because of a growing pool of people who do not qualify for Self-Help Housing Agency (SHHA) nor for loans from financial institutions to buy the cheapest BHC houses. Saleshando acknowledged that the scheme was suspended because of millions of Pula in arrears that the BHC had accrued because they did not have the in-house skills to efficiently collect the arrears. He said after these years, it is likely that the housing corporation now has the requisite skills and resources to run the scheme.

When debating the motion, the Minister of Lands and Housing (MLH) Lebonaamang Mokalake said both the tenant purchase scheme and the step ownership scheme were stopped because of several problems. He acknowledged that the BHC was at the time owed P44 million, and said that the corporation was too under-staffed to effectively collect revenues from buyers. Further, he said because the BHC acquired short-term loans from banks to build the houses to be sold, it did not make economic sense for the corporation to sell the houses through a long-term loan scheme.

He said the BHC came up with another scheme, being the instalment purchase scheme. Mokalake said the ministry has reserved P83 million that will cater for the turnkey (SHHA) houses as well as the instalment purchase scheme in this financial year. He said they are hoping to start on a small scale with 1,000 houses.

While most MPs supported the motion, the MP for Lobatse Nehemiah Modubule went further to get the motion adjourned and to be taken before two Parliamentary committees being the Finance and Estimates Committee and the Committee for Lands and Housing to see whether there is money within the budget presented last week to be set aside for the prioritisation of the scheme.

In a motion presented before Parliament last Friday, Saleshando said despite President Ian Khama and the responsible minister's assurances that government would re-introduce the scheme, it still has not happened.The tenant purchase scheme was introduced by the BHC in 1986 and allowed tenants of the BHC to buy houses without seeking financial assistance from banks, by allowing thems to pay monthly instalments towards buying the house instead of paying monthly rental. The scheme is currently suspended.On Friday, Saleshando argued that the current environment, in which property values have skyrocketed, with many households having reduced capacity to invest in property through financial institutions and in which the economy of the country has improved, is the right time to re-introduce the scheme.'The scheme was stopped 10 years ago with a promise that it would be reintroduced when the financial situation improves. It's clear that the situation is improving, we have moved from a deficit budget to a surplus budget.

We are not likely to return to the situation we were in before the recession,' he said.Saleshando said that even if the revival of the scheme comes at a cost to the government, in the long term, the government would be better off pushing policies that promote home-ownership.'As a house is an asset that appreciates in value, an owner can use it as security for other businesses, and if one buys a house in Gaborone and goes back to their home village to retire, they can rent the house to earn an income.'Saleshando argued that the scheme should be revived because of a growing pool of people who do not qualify for Self-Help Housing Agency (SHHA) nor for loans from financial institutions to buy the cheapest BHC houses.

Saleshando acknowledged that the scheme was suspended because of millions of Pula in arrears that the BHC had accrued because they did not have the in-house skills to efficiently collect the arrears. He said after these years, it is likely that the housing corporation now has the requisite skills and resources to run the scheme.When debating the motion, the Minister of Lands and Housing (MLH) Lebonaamang Mokalake said both the tenant purchase scheme and the step ownership scheme were stopped because of several problems.

He acknowledged that the BHC was at the time owed P44 million, and said that the corporation was too under-staffed to effectively collect revenues from buyers. Further, he said because the BHC acquired short-term loans from banks to build the houses to be sold, it did not make economic sense for the corporation to sell the houses through a long-term loan scheme. He said the BHC came up with another scheme, being the instalment purchase scheme. Mokalake said the ministry has reserved P83 million that will cater for the turnkey (SHHA) houses as well as the instalment purchase scheme in this financial year. He said they are hoping to start on a small scale with 1,000 houses.While most MPs supported the motion, the MP for Lobatse Nehemiah Modubule went further to get the motion adjourned and to be taken before two Parliamentary committees being the Finance and Estimates Committee and the Committee for Lands and Housing to see whether there is money within the budget presented last week to be set aside for the prioritisation of the scheme.