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, six 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 EVER result in improved home ownership at affordable prices; or it will it get even tougher to acquire a house.
In 2016, the then Minister of Lands and Housing Prince Maele directed BHC to modify and re-introduce the Tenant Purchase Scheme effective August 1st, 2016. Since inception in 1986, the ‘Tenant Purchase Scheme’ faced numerous challenges due to poor record keeping and administration challenges. At the time we had hope that the modified scheme will not go under such. Two years later we are yet to get an update of how many Batswana of middle income have benefitted from such scheme.
From where we stand, our country needs to look at a wide range of its policies and regulatory constraints that will ensure that houses become affordable to each and every Motswana. We also have to amend programmes, mobilize large amounts of capital, and create support systems and financial incentives to assist the middle income earners who like our country seems to be trapped there.
No one can dispute the fact that thirty seven 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 close to a million Pula 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 national Housing appeal that was established a few years back by the former President Ian Khama, there is nowhere for this growing group of people to go when they want to stop renting and start buying homes.
The parading of commercial banks at the Broadhurst flats this past week by BHC gives less-hope that the houses will get into the hands of the rightful beneficiaries. Chances are that even those who will be given an opportunity to purchase will do so at high prices given the old time attitude of banks towards the locals.
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 #Bottomline remains the urgent need for affordable housing.