The Tribune

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

THE Christie administration’s inability to fully honour its mandate to build over 1,300 homes before the end of its five-year term is largely the result of the devastation caused by Hurricanes Joaquin and Matthew, Minister of Environment and Housing Kenred Dorsett claimed yesterday.

Mr Dorsett said the government’s attempts to raise “significant funds in the market” for the initiative were “dashed” due to the passage of the storms in 2015 and 2016 respectively, which he said impacted its ability to secure funds from the Bahamas Mortgage Corporation (BMC).

However, the Southern Shores MP - a guest on Island Luck TV show “The Real Deal” with host Ortland Bodie Jr - said the government has managed to construct some 300 homes, which he said were built through the BMC’s private initiated loan programme. Another 60 homes have been constructed in Adastra Gardens through a private-public partnership, Mr Dorsett said, while 16 homes have been completed in Strachan’s Hill.

Construction is also underway in the Bahamian West area in Grand Bahama, as well as the construction of 16 to 18 homes in Spring City, Abaco.

Mr Dorsett also said plans have been approved for the construction of 304 homes that will make up an area to be called Carmichael Village, to the west of Dignity Gardens, and that the House of Assembly has approved the granting to his ministry of a five-acre tract off Milo Butler Highway - the shantytown site previously known as “The Yard” - where his ministry intends to build a “40 to 50 home development”.

However, Mr Dorsett ultimately said: “Until we are able to raise money for the housing programme, then nothing could be done.”

In 2012, Mr Dorsett announced that the Progressive Liberal Party (PLP) has a mandate to build 1,300 homes before the end of its five-year term.

The BMC, despite its weak financial state, has traditionally financed home construction, and the build-out and infrastructure installation, for all government subdivisions, raising funds from institutional investors - the lion’s share from the National Insurance Board (NIB) - via bond issues.

These funds are then repaid via the mortgages issued to purchasers of the government’s affordable homes. However, this model has been beset by high delinquency rates that have exceeded 30 per cent, making it progressively harder for the BMC to meet its obligations.

This was the primary reason why Mr Dorsett, in 2014, said it would be “irresponsible” for him to use the BMC to finance the government programme, at the time conceding that its cash-strapped status had proven a “tremendous challenge”.

Speaking as his ministry signed a memorandum of understanding (MOU) with Bahamian realtors to help advance the government’s housing initiative, he reiterated that the Christie administration was trying to restore the corporation to health by securitising its loan portfolio.

Nonetheless, in his 2015-2016 budget presentation, Prime Minister Perry Christie announced that the BMC had approved the issuance of $100m in bonds, which he said would “jump start the government’s aggressive housing programme and add over 1,000 new housing units to our inventory”.

“While the Prime Minister in 2015 announced that he thought the Bahamas Mortgage Corporation was at a point to issue $100m in bonds in his budget contribution, it was followed very quickly by Hurricane Joaquin, and once that happened our finance (advisors) asked us to put on the brakes,” Mr Dorsett said yesterday. “The following year they indicated that they thought that I could issue about $65m, then we were visited upon by Matthew.

“And so our opportunities for being able to raise significant funds in the market for the housing programme were dashed.”

Of the status of the housing plan to date, Mr Dorsett said: “Until we are able to raise money for the housing programme, then nothing could be done … Nothing is going on in any meaningful way before the general election. We’re completing what we have already built out. People are moving into their homes in Bahamia West in Grand Bahama, people are moving into their homes in Adastra, and there are two more homes to be completed in Strachan’s Hill, they will take occupation in the next few days.”

Going forward, however, Mr Dorsett said the government is still trying to bolster its “ability to issue bonds so that we can have a robust housing programme” as well as seeking out additional private-public partnerships to further mitigate against Bahamian taxpayers “having to pay hundreds of thousands of dollars after we build these subdivisions to come back and repair the homes”.

Meanwhile, he said there is currently a waiting list of about 5,000 to 6,000 seeking to apply for homes within the price range that the government has “traditionally offered”.

“Now that doesn’t mean that all of them are qualified, but we’ve got about 5,000 to 6,000 applicants,” he said. “There’s probably another 3,000 to 4,000 people who qualify for amounts less than $60,000 or $70,000. But my point is I think that’s where the greatest opportunity lies for the construction industry in terms of providing products at a lower amount of money to facilitate some of those who don’t qualify for $90,000 and above being able to move into a home.

“And so we’ve now redrawn and redesigned plans for simpler construction to enable the small man to be able to move into a home.”