Monday, December 11, 2023

BHC gets permission to charge market rentals 15 years after lobbying Gov’t

A sea change is expected to happen following a decision by Botswana Government to allow Botswana Housing Corporation to go ahead and implement market related rentals in all their housing units. Government has made a far-reaching decision that permits BHC to start a process of achieving market related rentals, 15 years after the corporation started lobbying Botswana government. This was announced by the BHC Chief Executive Officer, Reginald Motswaiso at a press conference this week.

BHC is owned 100 percent by Botswana government. The BHC key mandate is to provide housing for Batswana either on their own or through partnerships. Working hard to suppress his excitement, Motswaiso and his executive team belaboured the fact that BHC units across board were underpriced. He said the BHC prices were nowhere near the market rates. On average a BHC low income house costs just over P537 a month rental. At market rate it would be P2050. A medium income house currently cost P1330. The market related rental will take it up to P3700. And High Cost BHC house currently is P2162.

The Market related value as allowed by government will take it up to P5200.A proportionate increase will henceforth also be levied on Town Houses and Flats, said Motswaiso. Town houses will now attract close to P5300 after the government sanctioned increase. He explained that at the moment the disparity between prices charged by the market and those charged by BHC was too huge, thus lending a plausible explanation to challenges faced by BHC when it comes to issues related to renovation, maintenance and related services. This disparity, said Motswaiso was behind reasons to sub-let BHC houses by people given them for rent. Sub-renting has become a big headache for BHC. On another related matter Motswaiso explained that BHC has not been able to get a grant from government that had earlier been promised.

The grant was to help BHC to Fasttrack building housing reserved for the youth. When announced, the grant was supposed to be in the region of P667 million. That would have built 1000 units. When no such money was forthcoming from government, BHC on their own could not do the undertaking given that no lender was willing to give credit for a period as long as was required by a calculation to reserve units for the youth. In the end BHC dropped the idea. And went to the open market. Mr Motswaiso is however relieved that, notwithstanding figures indicated,  it is the youth who are buying or making enquiries about the new units at Tsholofelo in Gaborone recently completed by BHC.

“About P667 million was expected from Government as a grant to build 1000 units in four years for the youth. When it was not forthcoming, we go to the market. And lenders are not lending over 10 years. And interest is very high,” said Mr Motswaiso.


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