Govt caps prices on BHC housing scheme
Brian Benza | Wednesday May 28, 2014 14:43
Appearing before the Public Accounts Committee (PAC) yesterday, the Permanent Secretary in the Ministry of Lands and Housing Thatoyaone Raphaka said government has placed a price ceiling of the two bedroomed houses after realising that the majority of public officers cannot afford the exorbitantly priced BHC houses.
While ruling out the possibility of providing subventions to BHC for the parastatal to avail affordable houses to Batswana, Raphaka said that government in conjunction with the parastatal are currently consulting on the option of engaging the private sector to build the houses.
“The scheme which was supposed to be implemented by April this year has been delayed largely due to consultation with the private sector particularly the financial institutions that will be expected to finance the scheme. We hope together with the BHC to have finalised the implementation modalities and the housing specification in the next six months. Two options available are that BHC will either build the houses and sell to Batswana and or the private sector can do the same with the option of selling or renting the houses to government public officers,” he said.
Most Batswana, including middle-income earners have been priced out of BHC houses due to the exorbitance.
According to Raphaka, it currently costs around P300,000 to build a standard two bedroomed house which attracts a mortgage repayment rate of around P5,000 per month which is higher than the average P3,000 per month rentals paid by most Batswana.
“Instead of them asking Batswana to fork out another P2,000 to be able to afford the mortgage repayments for a standard two bedroom house, the public officer scheme has scaled down the requirements and specifications of these houses to make them affordable,” he said.
According to the PS, the cost of servicing land and putting up other amenities infrastructure has been a significant factor in pushing up the costs of houses while finance costs could also be pivotal as BHC sources funding from the open market. It is estimated that serving land contributes between 24 and 27 percent to the final costs of BHC houses. Apart from the P83 million allocated to BHC in the current financial year for the Turnkey housing project, government does not provide subventions to the parastatal except for guarantees on loans.
Early this year, BHC lifted the suspension of the tenant purchase scheme availing 1,528 houses to sitting customers to buy.
On offer are 1,354 low cost houses, 141 medium cost houses and 33 high cost houses. The bulk of the houses to be sold under the scheme are situated in Gaborone and Francistown, both cities boasting 825 and 350 houses respectively.
The parastatal has also roped in Stanbic Bank Botswana for financing the sitting tenants campaign. Stanbic Bank Botswana will participate as financiers in the campaign, with financing extended to the sitting in tenant as well as their nuclear family, thus allowing for increased affordability.
The Stanbic campaign runs until March 2015 and targets a total of 1,528 BHC properties across Botswana.