Noting criticisms for the alleged shifting mandate of the National Housing Trust, (NHT), the entity has since attempted to construct an explanation for its latest pricing announced for the Ruthven Towers development in Kingston.
The response follows backlash from several segments of the society on the mandate of the Housing Trust. Among the reasons offered are increased cost in sourcing construction material during the pandemic and the segment of the contributor base being targeted.
According to the Trust, Ruthven Towers with 86 solutions represents less than 1% of the approximately 10,000 housing options currently under construction locally.
It says having looked at its contributor data, the NHT is satisfied that the demand exists for the units. This is despite the public outcry for intervention and a return to the original mandate for housing for contributors.
The Trust notes housing prices are not static but will vary from location to location taking into account construction costs, property values, access to amenities, and other factors. The NHT says it, therefore, employs industry best practices in pricing strategy and applies subsidies where necessary to make homeownership possible for its contributors.
On the matter of subsidy, the NHT says outside of the low-interest rate on NHT’s loans relative to market rates, the Trust is applying a more strategic approach to subsidies, on a needs basis.
The NHT says Ruthven Towers is targeted to a segment of the contributor base with the lowest need for subsidies. It adds, by not applying one, the Trust will be better able to provide subsidies for schemes that are targeted towards contributors in the lower-income bands.
The NHT says while a general subsidy may not have been applied on the cost of the units, beneficiaries selected under the NHT’s Priority Index Entitlement system (PIE) will benefit from the policy to provide 100% financing (up to $15 million per unit) at NHT’s low mortgage rates.
The single unit costs start at 27. 7 million dollars while the two-bedroom unit is roughly 40 million dollars. A single contributor if eligible for 15 million dollars would need approximately 13 million dollars more to purchase the 1 bedroom unit. If a couple or young family of three were to join at best their 15 million dollars making a total 30 million they would still need another near 10 million dollars to purchase a two-bedroom unit.
The Trust further counters, that the housing construction sector is a dynamic one, which in recent years has been impacted by sharp and steady increases in the cost of construction and supply challenges racking up prices. In some instances, it says key material such as steel has seen a 200% increase.
It says supply and price shocks were further exacerbated in the last two years with the pandemic. The NHT says it is not immune to these development challenges and has been forced to contend with the issues despite efforts to keep the impact on contributors at a minimum.
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