The Cayman Islands Government will subsidise homes for low to middle income Caymanians, Leader of Government Business Kurt Tibbetts said on Friday.
However, the Government will only offer up-front subsidies to Caymanians that can afford to maintain monthly mortgage payments to private sector banks.
‘The subsidies will be one-time, end of story,’ he said. ‘We find at the end of the day it is less costly that way, even if the initial capital outlay is more.’
Mr. Tibbetts said he met with the National Housing and Community Development Trust last week to discuss its activities over the past six months.
It was reported to him that 30 per cent of the 132 properties managed by the NHCDT are at least six months behind in their mortgage payments.
The problem in many cases is that the people who were allotted the homes did not have the earning power to service a mortgage, Mr. Tibbetts said.
‘Fifty-eight per cent of those in the National Housing and Community Development Trust make less than $2,000 a month,’ he said. ‘More than half of those families are working with a very, very slim budget.’
In the future, as matter of policy, the Government is not going to let the NHCDT get into the business of mortgages, as was the initial method with the Affordable Housing Initiative, Mr. Tibbetts said.
‘Managing all of these homes is not a good idea,’ he said. ‘It is not sustainable.’
The new approach will be for the Government to conduct an assessment on the applicants – of which there are more than 700 currently – for affordable housing.
The assessment will determine what each applicant with steady income needs to be able to qualify for a private sector loan, whether it is land or something else, and the Government will subsidise that need.
‘It will be related to the individual,’ he said.
Mr. Tibbetts did not specify the minimum earning criteria for successful applicants.
‘They must at least be able to meet day-to-day commitments so that they don’t have to live in the nervous situation of running from the debt collector,’ he said.
It is in the country’s best interests to see that people have good homes to live in, Mr. Tibbetts said.
‘Government totally recognises it will have to outlay an amount of money on a continual basis.’
In the future, the Government will seek to put houses on individual sub-divided properties, rather than having them in a development similar to the NHCDT properties in West Bay and Windsor Park.
Speaking about the existing homes on those properties, Mr. Tibbetts said an engineering consulting firm had completed an assessment on the structures.
‘The buildings are in fair condition,’ he said, noting, however, that there is some corrosion of metal in the buildings.
‘The level of corrosion does not affect the structural integrity of the buildings at this time.’
However, a major maintenance programme will have to be undertaken on the homes within six years.
‘If this is not done, the life expectancy of the buildings is no more than 10 years,’ Mr. Tibbetts said, adding that the report stated that the materials used in the houses were not suitable for Cayman’s climate.
In other developments, Mr. Tibbetts said the NHCDT had made the decision to evacuate all of the residents of the current buildings in the event of a hurricane warning and to take them to hurricane shelters.
Mr. Tibbetts also reported the NHCDT general manager Maxine Gibson had completed the task of catching up with the backlog of paperwork in the past six months, and that she had set up an accounting system and filing system, which the NHCDT had not had before.
The government is in the process of identifying and sub-dividing land for future affordable homes. The property near Fairbanks Prison, a site earmarked for affordable homes in the past, might not be used, Mr. Tibbetts said.
For one thing, Mr. Tibbetts said the Fairbanks site is currently being used as a detention area for Cuban refugees, something with might end up being more than just temporary, he said.
In addition, during Hurricane Ivan it was reported that the Fairbanks site had some five feet of storm surge flooding.
‘It would be a bit irresponsible of us to put homes there on the ground just to have them destroyed in another hurricane,’ Mr. Tibbetts said.