Reflections on our current social housing policy

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Refugees of St Malo are evacuated from the social centre on Tuesday 17th July 2018. [© Doreck Clair]

The plight of the refugees of St-Malo and Bambous and the recent social housing policies adopted by the authorities necessitate some reflections. The persons who have been evacuated from the centres have been repeatedly stating that they are not beggars, have applied for and have been contributing for several years in the Plan épargne logement (PEL) to become owners of a house. It is to be noted that issues like squatting and the quest for a house from the unfortunate section of the population is not limited to Mauritius. This is an international phenomenon.

39 m2 vs 50 m2 housing units

In the last Budget, the government has, inter alia, confirmed its commitment to proceed with the construction of 50 m2 houses instead of units of 39 m2. The actual cost of a 39 m2 unit is around Rs 1.2 M. This includes land, onsite and offsite infrastructure and construction costs. By market standards, the minimum cost of the 50 m2 unit will not be less than Rs 1.5 M, notwithstanding the government’s subsidy thereon.

According to latest reports, a backlog of over 21,000 clients (earning between Rs 6,200 and Rs 20,000), who have already registered with the NHDC for years now and who have been saving their money in the PEL, are waiting for a 39 m2 house. NHDC rightly favours clients who can make a larger deposit given that the subsequent monthly repayment gets reduced.

Debt trap

Without going into technical details, and other things being equal, it is practically impossible for someone earning say Rs 10,000 to benefit from a dwelling when he has to compete with someone earning Rs 20,000, be it in terms of the underlying deposit or subsequent monthly repayments. The alternative for these clients would be to borrow elsewhere to make their initial deposit, thus being forced into a debt trap.

A considerable chunk of NHDC beneficiaries have difficulties in servicing their mortgages and fall in arrears and this results in foreclosure and sale by levy. If we want to help the poor, we should do so by all means. But we should avoid putting in place a system whereby both the provider of services (NHDC) and the clients run the risk of being ultimately losers. The authorities can exceptionally find a solution for the few presently undergoing a hunger strike. But what about the rest?

Phased system

One alternative would be to establish a phased system. Say 39 m2 for those earning up to Rs 10 000 in the first instance and the possibility of extending the house as and when their income grows and the 50 m2 houses for those earning higher. It’s all a question of affordability!

6,800 new houses

In his Budget speech, the Hon. Prime Minister and Minister of Finance stated that the government will construct 6,800 social housing units to the tune of Rs 13 billion before the next general elections. In its electoral manifesto, Alliance Lepep undertook to construct 10,000 housing units over a period of five years, that is, 2,000 units per year. In reply to a PQ on 15th May 2018, the Minister of Housing and Lands stated that, as at end of 2018, 1,679 new housing units would have been built by the present government. Assuming that these are realised, over four years a yearly average of 420 houses would have been built against the promised 2 000 units.

Moreover, the 2 000 arpents of land negotiated by the previous government in 2008, with the sugar industry for, inter alia, social housing is nearly exhausted, thus restraining the authorities’ marge de manoeuvre.

How can the government construct 6,800 houses in 12 months (Jan 2019 - Dec 2019) while the yearly average for the last four years would have been 420?

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