Prime Minister Andrew Holness last evening announced several measures to assist National Housing Trust (NHT) contributors, including public servants, as well as shelter solutions price-tagged at about $8 million to benefit low-income workers.
Holness said the Government, recognising a critical need for affordable housing to support economic and social development, has challenged the sector to substantially increase affordable housing starts.
“I have held meetings with the private and public sector stakeholders, including the NHT. I should remind the House that the Government had also issued a further challenge. This is for a majority of the solutions, through collaboration with the private sector, being priced at around $8 million,” he said as he closed his almost four-hour-long contribution to the 2021/22 budget debate at Gordon House.
He said the target had been set by the Government as an effort to meet the demand for housing for graduates and other workers who have been diligently saving for the opportunity of homeownership.
“I want to encourage all workers to start making your NHT contributions, if you have not yet started, and to become current if you had been contributing and stopped,” he stated.
He added that, within the next two months, the NHT will be advertising for local and foreign developers interested in being engaged in this level of the housing market.
The Government, Holness said, was also cognisant of the position some mortgagors have found themselves in over the last several months as a result of the novel coronavirus pandemic.
To help these mortgagors, the NHT had implemented a “Fresh Start” rescheduling facility in May 2020. That facility provided financial relief for mortgagors with arrears of 90 days or more, as at February 29, 2020, by allowing them a “one off” special arrangement that saw the amount owing being recalculated.
Those who have benefited from the facility saw their arrears added to the principal and their loan amount adjusted. Some mortgagors were also eligible to receive a reduction in interest rate based on their income, as well as an extension in mortgage tenure; allowances which improved their ability to service their loans.
He noted that, since 2016, some 26,300 public sector mortgagors have been receiving their contribution refund in cash annually. This cash refund is unlike what obtains for regular mortgagors, whose contribution refund is paid directly to their NHT mortgage accounts.
When the provision was initially established it was based on the economic situation which resulted in a wage freeze under a memorandum of understanding between public sector workers and the Government.
In his 2018/19 budget presentation he had spoken of extending the cash refund granted by the NHT to eligible public sector workers, and indicated that the period of extension would end this year.
Last night, he announced that, with the impact of COVID-19, the extension was once again needed. Consequently, the NHT will extend the cash refunds granted to public sector workers to April 2022.
In addition, he announced relief for contributors/mortgagors who have been unemployed for a period of 12 months or more to access their contribution refund one year in advance.
“Therefore, if the contributor’s refund is due for the year 2013 and that contributor has lost his/her job due to the pandemic, the contributor may access the refund of 2013 contributions, and also access the refund for the following year,” he explained.
The proposed implementation date for this initiative is July 2021. It will expire in July 2022.
Turning to the NHT strategic review and the new business model, he noted that in November 2017 the report of a Strategic Review Commission was presented to him and was subsequently tabled in Parliament. Arising from recommendations in that report he said the NHT has examined and implemented some improvements.
As a direct result of this strategic move, greater emphasis is to be placed on housing delivery through initiatives such as the Developer’s Programme and the Guaranteed Purchase Programme.
He noted that the total assets of the NHT are projected to increase to $313 billion by March 2022, of which 91 per cent, or $285 billion, will be in housing, comprising mortgages and work in progress.
The growth in assets has been significant when compared to March 2016, when total assets were $237 billion with 84 per cent, or $200 billion, representing investments in housing.
The NHT’s annual housing expenditure has grown from an average of $20 billion in 2014-2016 to a projected $58 billion in 2021/2022.