UP to May this year, some 47 per cent of tenants of the Valerie High Rise Apartment Units were in arrears.
That’s according to the Special Audit done by the Barbados Audit Office on the housing projects at Valerie and at the Grotto.
The report said that all 76 units at the Valerie complex were allocated to lower income earners on a rental basis, with the rental rate being charged at Valerie at $700 per unit.
“If the same approach for determining the rental rate for Valerie is used for the Grotto project, it is expected that the resulting rate will be a challenge for lower income earners renting these unites, given the higher construction cost which is used as a base for defining rents.
However, in response, the NHC said that at March 31, 11 per cent of the tenants at Valerie were in arrears.
“This represents a decline of 20 per cent from January 2016. The Corporation has made efforts to collect outstanding arrears in these units and its efforts are bearing fruit,” the Corporation assured.
According to the Report, the NHC had indicated that housing units for lower income earners should be provided at a cost of $125 000 to $195 000.
“However, the construction costs of these high rise units ranged between $300 000 and $450 000 per unit. Even though all of the units were built within the agreed time frame, the high cost per unit obtained within these projects would have impacted negatively on the NHC being able to provide these units to lower income earners without substantial subsidisation,” the Report on the Special Audit outlined.
It also explained that the Corporation based rental rates for its high rise apartments on the construction costs of the building recovered over a 35-year period.
The Audit Office said that with the introduction of legislation which allows the transfer of ownership to tenants after renting for 20 years, it is not clear why the 35-year payback period is being considered.
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