1,063 is the number of housing units built by the National Housing Development Company (NHDC) between January 2015 and July 2017. 11,356 is the number of housing units the NHDC intends to build in the next 4 years. What happened to the government’s target of 2,000 housing units per year or 10,000 homes by December 2019? The end of their mandate is about 2 years away and yet the ‘Alliance Lepep’ government will need an extra 2 years to meet their housing target. Has the government realised that the housing target may never be met by December 2019?

Understanding the numbers!

The government aims at constructing 11,356 new housing units of size 50m2to 60 m2 across the country. The number announced by the government of housing units to be built gives hope to low-income families currently waiting for a decent home. So far, the government has given the number of houses they intend to build but has not given the exact figure of people in housing need! Has the government conducted a housing need assessment? It is highly important to understand demand for social housing and know for whom we are building. Because in the absence of a housing need assessment, families with higher income within the eligibility criteria set by the government (able to provide a deposit of 10%) can be favoured over vulnerable families with genuine and imminent housing needs. Secondly, if the number of families in housing need remains unknown, the target set by the government can create a surplus of housing as in the case of England where the North British housing association had to demolish 50 houses in Newcastle upon Tyne only 3 years after they were built due to low demand. And if insufficient homes are built by the NHDC, the situation will worsen over the years. Therefore, the new housing target could only be justified if the government had conducted a housing need assessment.

 

Playing with numbers?

The main factors of demand for social housing are based on the current price of social housing, the price level of other forms of tenure, availability of finance, such as income support and loans and levels of government subsidy. Has the government conducted a study to analyse the housing market using a demand model before providing the numbers of new homes they intend to build? Can the government justify its new homes target when no demand model for housing or housing need assessment have been prepared? With the introduction of the National Minimum Wage in January 2018 as announced on the government’s portal, the Ministry of Housing and Lands will have to review the housing policies in order to focus on good-quality housing and make new residential serviced lots. New eligibility criteria for housing will have to be set by the government following the recommendation of the National Wage Consultative Council (NWCC). Now, that a person would earn a monthly wage of at least Rs. 9,000, the demand for housing would drastically change as there should be fewer families on the waiting list of the NHDC.

 

Conclusion

With the introduction of a National Minimum Wage, the government’s self-imposed new homes target will make no sense. Therefore, The Ministry of Housing and Lands should take the following steps to solve the housing problem. Firstly, they have to publish a housing need assessment to know exactly how many households are in housing need for allocation to the right people. Secondly, they have to prepare a space standard for housing to put more emphasis on ‘Good Quality’ and meet the size of new homes according to occupancy. Finally, government should be cautious and not rely solely on numbers which are calculated without taking into consideration the main factors of demand for social housing. Supply of housing is important but factors affecting demand do change. One of the major reasons housing supply has been very tight over the last 15 years is because of red tape. It would be ludicrous to deny it. And if we cut through the red tape, it will change the balance between supply and demand.