Housing a critical human need

HOUSING is a critical human need in all Papua New Guinea urban centres and despite the rapidly expanding economy, chances of most urban families acquiring homes of their own remain slim.
In July, shortly after the new Government took over, Housing and Urban Development Minister Justin Tkatchenko made a start to “clean up” the National Housing Corporation. We reminded him to go a step further and commit himself to looking at how to make affordable housing a reality.
Today’s rental charge is beyond the reach of most Papua New Guineans. There is no way someone earning, say K700 a fortnight, can afford rental accommodation besides meeting their other basic needs.
In Port Moresby and Lae, the housing market (purchase and rental prices) is out of sync with income. A general rule of thumb is that no more than 30 per cent of household income should be spent on housing. Those most affected are middle and low-income households. Households are spending upwards of 50 per cent of their income on rental. This is untenable and pushes families living in rental accommodation to vicious cycles of debt and most to engaging in informal business activities to supplement their household budget.
The increase in settlement/informal housing and overcrowding in suburban housing where multiple families live in one house reflects this growing problem. PNG’s towns and cities face considerable challenges absorbing the trend of rural to urban migration coupled by a population growth rate of 2.7 per cent. While, some inroads have been made into demonstrating, the type of low-cost construction and planning solutions that can be achieved; however for varying reasons, limited large scale initiatives are being undertaken to bridge the gap between demand and supply of affordable housing.
Various government bodies such as the National Housing Corporation, Office of Urbanisation and various Urban Authorities are under resourced, lack capacity support and know-how to develop improved outcomes.
Government Interventions can take place on both the Supply and Demand side. The BSP First Home Buyer Scheme, is an intervention on the demand side. Projects such as the Duran Farm Housing project and the Lakeside Affordable Housing Project for public servants are interventions on the supply end. Both the Duran Farm project have remained undelivered.
Duran Farm remains problematic with multiple titles issued to individuals (including current and former politicians) and companies outside of the intended purpose.
Lakeside Development is dependent on budgetary allocation and after six years, there has been very little progress. Many Papua New Guineans dream of owning homes in major urban centres such as Port Moresby and Lae but few can afford the costs associated with home ownership.
A house is usually the most expensive single purchase an individual or family makes. Given the high cost, most individuals do not have enough savings on hand to pay the entire amount outright.
In many countries such as PNG, mortgaged loans are available from banks and other financial institutions. If the home owner fails to meet the agreed repayment schedule, the bank or financial institution may repossess the property.
The problem with the housing challenge is that, if you are not personally experiencing the challenge, you cannot understand with the situation.
In Port Moresby – over 40 per cent of the population reside in informal settlement. It is estimated that this will grow to 60 per cent by 2030 if no significant effort is undertaken to address the underlying problems including poor enforcement.