28 Feb 2021

Botswana Housing Corporation (BHC) rentals will remain 20 per cent below the market rate after they are increased.

Speaking in Parliament on February 26, Minister of Infrastructure and Housing Development, Mr Mmusi Kgafela said rental increase  for both individuals and corporates would be staggered over a period of five years, saying initially rentals for corporates were to be increased once in a large some, but government had decided not to take this route following an appeal by Gaborone Central Member of Parliament, Mr Tumisang Healy.

The BHC rentals were to be increased effective April 1 by between P200 and P700 depending on the type of house and would remain below the market rate as per government commitment.

Minister Kgafela said the BHC rentals were last increased in 2013, hence the corporation had not been able to finance new projects and maintain new buildings.

He further said the corporation did not receive funding from government like other state-owned enterprises, had to raise revenue,  encroached into the private sector space by offering consultancy and project management services.

The minister further said only 12 out of 9 819 tenants had appealed for rent holiday and said this, therefore, showed that majority of the tenants were public officers who received their salaries during lockdown and throughout the COVID-19 pandemic.

Meanwhile, Mr Kgafela said BHC controlled four per cent of the rental market in the country, and eight per cent in the cities with 92 per cent in the hands of the private sector.

The minister said since inception, BHC had built 26 000 houses, out of which 16 000 had been sold to Batswana, with the remaining number rented to generate income for the corporation.

The BHC’s inability to increase rentals since 2013 had seen it lose funds that could construct 5 750 houses.

Mr Kgafela said the low rentals had discouraged public officers from purchasing their own houses, adding that some people had sublet their houses at market rates.

He said they were currently discussing how public officers could purchase the houses they were occupying, adding that they were also working on amending the Section Title Act to allow individuals to purchase BHC flats.

The minister explained that under the current act, every tenant had the right to show interest in buying a BHC flat.

He further said they were introducing an Installment Purchasing Scheme.

Minister Kgafela said he was happy that youths had been able to purchase flats at Tsholofelo, adding that while 60 per cent was reserved for them, ownership increased to 70 per cent and said this was helped by the banks which were attracted by the prices and offered 100 per cent loans.

He said BHC would use the proceeds to continue to provide Batswana with accommodation. ENDS