Government makes U-turn on affordable housing pledge

Government makes U-turn on affordable housing pledge
April 10 21:56 2016

Some 300 families who were awarded flats under an affordable housing scheme are being asked to pay MVR2million (US$129,701) for a flat, with the housing ministry announcing that it will prioritise families who can make the payment within five years.

In a letter to successful applicants, Hassan Rasheed, state minister for housing, said that the price of flats under construction at the Gaakoshi and Arabiyya plots “do not fit the social housing category.”

“The government has decided that the price of Gaakoshi and Arabiyya flats is MVR2million, and we have decided to give priority to those who can complete the payment within five years.”

The flats were awarded in 2012 by former President Mohamed Nasheed’s administration to the landless residents of Malé, migrants who had lived in Malé for long periods of time, and land-owning residents of Malé who were unable to build on their plots because of lack of finance or the small size of their plots. Those in the latter category are eligible for housing in exchange for their land.

The letter has sparked outrage, with many families noting the 500 apartments – built by a subsidiary company of Indian developer Tata – were initially promised as affordable housing.

The flats were set to be completed by 2018, but construction was delayed by over two years following Nasheed’s ouster in 2012. His predecessor sought to renegotiate the terms of the housing deal, but a new deal was only reached in 2014, nearly a year after President Abdulla Yameen assumed office.

The housing ministry appeared to blame the price hike on a delay in construction and claimed the developer was demanding the full payment before transferring the flats to the government. The flats are nearing completion and will be handed over by the end of the year.

Rizma Waleed, 40 years, who works in the tourism industry, had given up the 250sqft of land she had inherited for a flat. For her, the housing ministry’s letter came as a shock, she said.

“I thought the government was handing out a flat in exchange for giving up land. MVR2million amounts to MVR33,000 per month, which is unaffordable for most Maldivian families.”

She noted other apartments for sale – such as the newly built flats on sale at the Rehendhi complex in Malé – were also on auction for MVR2million.

The housing ministry website says families that give up plots of land would be eligible to have the value of the plot deducted from the payment.

Former Housing Minister Mohamed Aslam, criticising the government’s plans, said the Maldivian Democratic Party had planned to buy the flats from Tata through the Housing Development Finance Corporation and sell it to the public through a payment period of 25 years.

“The HDFC is the real estate company of the government. It was affordable with the plan of HDFC selling to the public, but it’s not affordable now.”

Neither Housing Minister Dr Mohamed Muizz nor housing ministry officials were responding to calls at the time of going to press.

The opposition Adhaalath Party also slammed the decision, labelling it a move “to provide flats for selected individuals through corruption.

“The purpose of this decision by the government, as usual, is to illicitly enrich selected individuals. This decision was made without even a slight consideration to the rights of the successful applicants,” the party said.

The religious conservative party dismissed the government’s claim high prices were a result of its agreement with the developer, saying: “Our investigations have found that the developers were awarded an island for resort development and given two plots of lands in Malé City to cover the cost of construction.

“The previous government has settled the hike in construction prices over different reasons. Therefore there is no reason for the change in the last minute change in prices.”

Meanwhile Yameen announced last week that the government will hand over contracts to some seven foreign companies to build 15,000 housing units in the suburb Hulhumalé.