July 30, 2009

Housing affordability in Fiji

Housing affordability
http://www.fijitimes.com/ - Reports by GERALDINE PANAPASA

Thursday, July 30, 2009

A squatter settlement at Muanivatu outside Suva

RURAL-urban migration, low wages, expired land lease and financial demands are some factors that contribute to the housing crisis in Fiji, says Father Kevin Barr. In his report presented at the 2009 Fiji Economy Updates on housing affordability on Tuesday, Fr Barr said these factors led to the growth in squatter settlements in the country.

"About 15 per cent of Fiji's population live in overcrowded, sub-standard and unhygienic housing in more than 200 squatter settlements," Fr Barr said. "There is inequality and the percentage of those in poverty has grown drastically. Quality of life for the ordinary people has not improved and we have seen the development of the very large Fiji of the poor and struggling and the small Fiji of the rich." Fr Barr said subsidy for housing was not a large commitment by the government particularly when it acknowledged that housing was a human right. "Those responsible for housing the nation's population must think in terms of availability and affordability," Fr Barr said. "It is not just a matter of acquiring land, developing lots and building houses. The lots and houses must be affordable for the people. "Any national housing scheme must take into account the income level of the people to determine what is affordable for those in the particular income levels." Fr Barr said housing agencies need to be able to deliver houses at a level of affordability.
He said when majority of the population earned low income, housing must be provided so that they can afford it.

Professor Wadan Narsey said in his analysis of poverty in Fiji that low income earners in 2002 and 2003 spent about 60 per cent of their pay on food. "The price of basic food is increasing, which leaves little with which to pay rent or pay off a housing loan," Fr Barr said. He said about 25,000 poor people were receiving family assistance which came to a minimum of $60 a month or maximum of $120 a month.

Reassess Housing Authority, PRB role: Barr
www.fijilive.com - July 30, 2009

Fiji Wage Council chairman and poverty advocate Father Kevin Barr has called on government to re-look the roles played by Housing Authority and the Public Rental Board as there was “a very real danger” that their commercialization would go against their intended role to provide housing for the poor. Barr said allowing the two state companies to operate along commercial lines and charging market rates and market rents may make good economic sense but if a high percentage of the population could not afford to pay these rates, there was a serious need to question how they would be provided with affordable homes. “In 1997 when, on the advice from the World Bank, the HA and PRB were separated, the World Bank advisor who came to Fiji said that the PRB must charge economic rents for its rental units. This meant that rents for those living in the Four Storey flats at Raiwaqa would pay $58 a month instead of $12 a month. Someone asked: ‘What happens to those who cannot afford to pay the increased rent?’ The reply was: ‘Just flush them out.’ Many were horrified that this unfeeling, economic/commercial attitude should dominate the man’s thinking. He didn’t seem to be concerned where people went if they couldn’t pay. He didn’t think of the social consequences. His attitudes were dominated by principles such as ‘user pays’ and the theories of ‘economic rationalism’ and ‘free market economics,’” Barr said.“If HA and PRB are to be relevant in today’s world, they need to do careful research to find out what ‘low income’ really means so that their products can be affordable to this group. “With such a high level of poverty in the country, over 35 percent, and such a large number of full time workers receiving wages below the poverty line (between 55 and 60 percent) and 71 percent of workers earning incomes below $15,000, serious reassessment of the demands placed on HA and PRB is needed,” Barr added. Among the many ways that housing could be made affordable to the poor, Barr suggested the provision of government subsidies as well as getting the poor to participate in schemes to build houses, thereby reducing costs.

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