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CAPRI's NHT suggestion impractical – former chairman

Published:Wednesday | May 11, 2016 | 5:48 AM
A study titled: ‘The NHT: Wrong Funding, Wrong Target, Wrong Strategy’, advocates a gradual withdrawal of the NHT from direct construction of houses, arguing that this would facilitate greater competition, forcing suppliers to be efficient.

Jodi-Ann Gilpin, Staff Reporter

Howard Mitchell, former chairman of the National Housing Trust (NHT), has shot down as impractical a recommendation for the entity to relinquish its construction of low-income houses to the private sector.

The recommendation is made by the Caribbean Policy Research Institute (CaPRI) in a study on the NHT released this week.

However, Mitchell says the suggestion would take home ownership further out of the reach of poor contributors.

He says private developers are profit driven and there is not a large enough profit margin to attract these developers to constructing low-income housing.

PHOTO: Howard Mitchell

Mitchell notes that five years ago when the NHT offered developers three per cent mortgages to construct low-income houses they did not respond well.

The study titled: ‘The NHT: Wrong Funding, Wrong Target, Wrong Strategy’, advocates a gradual withdrawal of the NHT from direct construction of houses, arguing that this would facilitate greater competition, forcing suppliers to be efficient.

During the official launch of the document, co-executive director of CaPRI, Dr Damien King, further argued that the current situation crowds out private investment.

 

Co-executive director of CaPRI, Dr Damien King

Meanwhile, the former chairman also said the recommendation for the NHT to broaden its concept of looking at the rental market instead of focusing solely on home ownership is not a bad option, but needs fine-tuning.

CaPRI argues that the rental option can be facilitated by the issuance of rental vouchers to subsidise housing for those who are unable to purchase.