Massive spending in housing aimed at reducing gap between rich & poor – Rodrigues

Massing spending by Government in the housing sector to deliver thousands of house lots and housing units have been part of a strategy to not only avoid the resource curse in a budding oil economy, but also to bridge the gap between the rich and poor.

Minister within the Housing and Water Ministry, Susan Rodrigues on Wednesday made this point during her presentation at the Regional Forum on Urban and Housing Financing in Ecuador, where she responded to the question of safeguarding accessibility to housing for low- and middle-income persons.
“We recognise that we have to avoid the resource curse, the Dutch Disease and widening the gap between the rich and poor and ensuring that there is equal distribution in our country. So, we have embarked on massive spending, ensuring that we put the resources to great use and that while we transform our country, that equally we bring prosperity to the homes of every single Guyanese,” Rodrigues outlined.
Rodrigues told the panel that Government has been investing in infrastructure, healthcare, education and other critical sectors on a scale that has never been done before. This is also the case in the housing sector, where 26,000 house lots have been delivered since August 2020.
“Similarly, we have been doing the same in housing. The Housing sector has always been a major pillar of our government. In 2020, when we took office, we found a deficit of 70,000 in the housing sector. We made a political promise to deliver 50,000 lots. So, our housing programme is mostly driven by public spending.”
Despite a deficit of 57,000 applications still existing, the Minister added that public spending has been enlarged to meet the demands.
She underscored, “There still remains a deficit of 57,000 now because for every plot of land we allocate, we receive a new application. There will always be a demand in that sector. But coming back to the public spending, we have increased our housing budget by over 1,000 percent from 2020 to 2023. We’re spending more to ensure that we do the infrastructure work in new areas so the housing programme is heavily subsidized for low-income population.”
Government has been able to subsidize costs for homeownership by up to 90 percent. Road networks, water and electricity are also provided in new housing areas.
“We have devised several subsidies and incentives to support low-income families. We have the core home subsidy programme which addresses both qualitative and quantitative deficit in the housing sector. That programme has been performing very well. We have mortgage relief for first time homeowners, which is a deductible that you can reclaim for income-tax purposes. We also have an incentive for the banking institutions who are giving waiver on the taxes of their mortgage portfolio.”
In 2020, mortgage interest rate was about six percent. Today, it is down to about 3.5 percent at a time when global numbers are on the rise. Land allocations are being tied in with construction of housing units to address the deficit in homeownership for low-income earners and young professionals.
Last month, President Irfaan Ali shared during the International Building Expo event that some $170 billion will have to be expended to address the housing needs and backlogs.
This followed a breakdown of $1 billion in Region One, $4 billion in Region Two, close to $42 billion in Region Three, $80 billion in Region Four, $4 billion in Region Five, $16 billion in Region Six, $4 billion in Region Seven, $3 billion in Region Nine and $15 billion in Region Ten.”
He added that in 2015, the total capital budget for the entire Government was $39 billion. In 2020, it was $72 billion. To meet the demand for housing and water only presently requires $170 billion. That is more than the entire capital budget in 2015 and 2020. (G12)