Tuesday, March 9, 2021

BHC’s major focus should be provision of affordable housing to Batswana

On the occasion that marked the announcement of what should by now have radically changed the shape of home ownership in our country, the Government said that one of the functions of SIHA (Single Housing Authority), mandated to the Botswana Housing Corporation in 2012 will be the provision of ‘affordable’ and ‘adequate’ housing for all income categories.
As we all might be aware, the establishment of SIHA came as a result of numerous complaints by many Batswana over the past years of high cost of acquiring houses.
The upward trend resulted in some of them opting to purchase depreciating assets such as motor vehicles while others opted to purchase their houses from private firms which they considered cheaper than the subsidised BHC.
However, two years down the line the question that remains unanswered for aspiring home owners, especially young Batswana who just joined the labour market is whether the introduction of a single housing authority will result in improved home ownership at affordable prices; or it will it get even tougher to acquire a house.
This week, the Reginald Motswaiso led corporation almost excited the market through the launch of their ‘Sitting tenants’ sales campaign. We say almost because there is high likelihood that only a few would benefit from this scheme which is targeting only tenants with a valid lease agreement with BHC.
No one can dispute the fact that 31 years after Botswana’s first housing policy, the dream of a decent home has become even more elusive than ever for the country’s low and middle income earners.
The policy that was drafted in 1982 was meant to encourage the building of new urban housing for all income levels to avoid illegal settlement and to improve housing in rural areas has not been successful to deliver what real estate experts would call ‘affordable housing’.
Given the fact that low to middle income prospective purchasers of houses have been shut out of the market as evidenced by the exponential increase in house prices, it is fait that one could even conclude that Botswana’s affordable housing market is non-existent.
It is quite clear that prospective buyers are fatigued due to a sustained increase in property prices over the last few years. Botswana Housing Corporation (BHC) low cost house in Gaborone currently costs around P700, 000 but was initially at P300, 000 in 2009 while in an inactive market like Lobatse the low cost house sells for above P400, 000.
As a single housing delivery vehicle, wholly owned by the government, BHC should not be reminded of the fact that the property market is very thirsty for affordable housing. However for the sake of these prospective home owners, let us just remind BHC that potential gap market homeowners are falling through the cracks.
Like the poor who of late find themselves waiting to acquire a house through the President Housing appeal, there is nowhere for this growing group of people to go when they want to stop renting and start buying homes.
It is however worthy noting that, for some time now the BHC has been lobbying government through the line ministry to give them more independence. What a noble request. Indeed if given autonomy, BHC would be better placed to make management decisions that would benefit both the public and the corporation’s line of business.
It is evident that at the moment the corporation is restrained by having to report to the minister who reports to cabinet; a tedious thing which hampers speedy commercial decisions in our view.
Despite all these, the market remains ripe thus the need for all the players to come to the fore. Government, commercial banks, private developers and pension funds need to start ‘talking and acting’ because affordable housing can only be affordable in the real sense if all the concerned players participate.
In our mist, active supporters of affordable housing such as the Real Estate Institute Botswana (REIB) can help steer affordable housing policy. These could include the government’s consideration to subsidise property developers who in turn should sell houses to low income earners at a lower price.
Private land developers should also look for creative solutions because land prices and construction costs will remain high.
They must create a new community-led business model that enables them to build quality homes at a fraction of the cost of their luxury ones whilst also maintaining profitability.
We are not supporting home ownership because we believe everyone needs to own a home the way everyone needs to own a nice car or good clothes. We support home ownership because there is a broad public benefit to it and what it contributes to the development of good citizenship.
That Batswana aspire to homeownership is clear. While they may postpone acting on that desire, as they almost certainly have over the past several years, a change in policy that would make house affordable could readily change that.
It is quite evident that most of them have been prevented from acting on their desire to buy by underwriting standards or decided not to even ask for credit from financial institutions out of fear of being denied a loan.
Although it is a prime conviction of the BHC to overcome these tides and hurdles, the corporation would need assistance, precisely political one as the Bottom line remains the urgent need for ‘affordable housing’. While there might be a bitter pill to swallow the suggested interventions might prove to be just what the doctor has ordered.

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