Joes Hill affordable homes not so affordable
Although the Joe’s Hill Manor housing development was meant to be an affordable housing project, many interested persons have been finding it difficult to afford the homes.
The Joe’s Hill Housing Development is the responsibility of the Social Security Board (SSB) and was recently completed at a cost of $26,666,905.02.
The 52 units are a mix of one-, two-, and three-bedroom condos, single-family homes, and townhouses. The main aim of the project is to enable residents who are first time homebuyers to get access to affordable homes.
But according to Director of the SSB Jeanette Scatliffe-Boynes, only four persons have moved forward with purchasing units. This is a far cry from the nearly 600 applications that the Board received in 2017 before the units were completed.
In an interview with 284 Media, Scatliffe-Boynes said cost is one of the main reasons persons haven’t been able to purchase the units. She said many of them did not meet the pre-qualification criteria that the banks set out for persons applying for mortgages.
“Apparently, there were issues with credit, down payment, the cost being too high, so those were the reasons persons were unable to move forward,” Scatliffe-Boynes revealed.
She added that the SSB priced the units below the suggested market value. But she admitted that the SSB also considered how much it would make as a return on its investment when pricing the homes.
“Of course we looked at the possibilities of the pricing, we looked at what the suggested market value was at the time, we also looked at [the fact that] it’s an investment and what the SBB would get out of it. I would tell you that in pricing them, we went below the suggested price that we got from companies. So there is some equity in the homes, they are priced lower than the market value and we felt like it was affordable for that demographic we were trying to appease,” Scatliffe-Boynes stated.
Now that the homes aren’t being sold fast enough, the director also said the SSB will be embarking on an aggressive public relations campaign to get people to buy the homes.
When the Joes Hill project was still in the development phase, former Opposition Leader Marlon Penn questioned whether persons would be able to afford the homes since the average cost of owning was around $350,000 per unit.
He suggested persons would need roughly $75,000 as start-up payments, in addition to miscellaneous fees to purchase a unit.
At that time, then Social Security Minister Vincent Wheatley had expressed confidence that all housing units at Joe’s Hill Manor would be occupied once completed.
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IF AYO USED TO LISTEN, WE WOULDN’T BE IN THIS PREDICAMENT NOW
It’s better to buy some land and take your time building a tiny house. $350K?
You had 600 applications because people thought they would follow the USVI model of a reasonable deposit and then rent to own.
To SSB and Government before the project had started. The prices for starter homes were agreed and set. I guess someone needed some more money out of the project?
Give us back our Social Security Money please and thanks. Social security know everyone salaries so how come you so surprised that no one can afford them. People do not get pay what they are worth hence contributing to poverty!!
No surprise there’s little interest given that units start at $350k (presumably 1 bedroom) which works about to about $ 2,100/month after 10% down and 30 years at 6.5% interest rate. Comes out to be about $ 25k/year, not far from BVI median salaries, not factoring insurance, water, electricity, taxes, monthly maintenance. No wonder people don’t qualify to buy. An investor is probably looking at wanting rents close to $ 3K!
Doesn’t sound like anyone thought about what affordability meant to BVI buyers (presumably intended to be Belongers) at the time design and construction budgets were considered. $ 26 million for 52 units comes out at an average of $ 500k per? Who thinks that’s affordable? If you go with a median BVI salary of $2k/month, and spend 40% of your gross on a mortgage, your monthly payment would be $ 800 (plus utilities, insurance, taxes). At 6.5%, that gets you a 30 year loan of about $125k. You’d have to put a downpayment of $ 225k (65%) on one of these units to keep imonthly payment within what banks consider affordable if you’re on about $ 25k/year.
Were the building costs ever audited? What was the original design budget? Was it exceeded?
SSBs problem now is how does it recoup operating and maintenance costs on its non-liquid investment while it waits for investors/buyers. At the current prices, it could be a while, meaning poor economic return for now. At the prices asked, could also be a while before value appreciation which will require proper building management and maintenance which we don’t seem to be too good at.
In the end, it seems like another tale of poor performance that could have been prevented by proper planning.
I really does wonder if is Kindergarteners in some of these positions. Was a study or whatever you call it done to see if people would have been able to afford these homes. How do we get ourselves in these predicaments. Everybody was telling the govt back then NHI is not sustainable they went ahead and got it anyway. Now the SSB is left with the stress of these overinflated homes. WTH could find $75000 plus to get a home that looks like an apartment anyway. Is a set of jokers in these departments. You all make the dog sick!
The problem with property ownership in the BVI is that the re-sale market is fairly stagnant. Many regular people will not invest as there is;
1. No liquid resale market.
2. Interest rates are high.
3. Land and building costs are high.
4. Property prices are inconsistent with build costs.
5. High stamp duty for non-belongers (12%)
6. Potential of non-belongers having to leave the island if work permit not renewed.
Government needs to consider ways of opening up the market.
If I speak out of turn for all BVIslanders, apologies, however, in my opinion, the statements of Mrs. Boynes are insulting to the intelligence of the people of the BVI, who have been engaged in the building of homes in the BVI, since a rock was a pebble, especially during the construction boom to know when a house is being marketed way above its market value and the evidence of that speaks for itself and had nothing to do with whether people were qualified to pay for them or not.
These houses are built poorly and price ABOVE market value for what they became and that is why even if there was a percentage of that nearly 600 applicants who wouldn’t have been able to afford them, there was a significantly higher percentage who would have afford it but after viewing decided they were not worth the exorbitant amount of money being asked.
Tell the truth. Those houses and they way they are built was a huge waste of money and a huge disappointment. They are not built the way BVIslanders live and further to that none of the poeple who built them would have bought one and lived in it.
move from here with that!
350 K is affordable for a home. Especially if you have to buy the land first. Stop the cap. The problem on Joes Hill is that those houses are too close together.
And250K for a bathroom?? I hereby submit my tender for all bathroom construction in the BVI
Don’t forget to add on the yearly maintenance cost at this ‘gated community’.
Not a well thought out development at all.
Also note At 4% CD at a bank on $26m means SSB is loosing over $1m/year on interest they could have been earning for us! What a f disaster!
Nothing else really to say except…we are being lead by ineptitude.
for the UK troops that will take over and run the BVI for the next few decades.
let’s be honest these homes will be bought by ssb head rich friends, that was always the plan
Reduce the price of the homes. SSB reduce your expected rate of return and get back the soc sec funds and move on. Do not waste our money on marketing.
Look what my Tola has come to, where once hokeownwership was a given, it has become out of the reach of so many!
We have given in to the vices of the real estate industry about market value, knowing fully well, so many of our people cannot afford current values!
Where is the sensitivity, and the passion needed in current leadership,to reconsider market values, and begin to offer affordable rates to our people.
I guess if no one purchases,then the next best solution, will be to have them demolished!
Look what my Tola has come to!
Black folks in these Blessed beautiful islands are submerged under the weight of their oppressive mentality nurtured by the your Holy Roly wealthy preachers and their Churches.
Unaffordability of marginal modern lower priced homes is an example. Poverty sported by the imported varmints begging and taking is of your own choosing. It is going to get worse but there is always the White man to blame.
BVI a simple modern dregs and offshoot of the larger unfortunate land masses in the Caribbean.
MONACO model DUBAI
..follow success
The banks told the SSB long before the project started that it wouldn’t work. It’s not nice to be proven correct and for the SSB to have lost money building this folly
Hon. V. Wheatley said that they would have ho issue getting them sold so what’s the problem? Have him take care of the sales. Let him prove that he knew what he was saying.
True that
If there were serious consequences for abuse of public funds this probably wouldn’t have happened.
Complete nonsense!! To open a lemonade stand the Bank wants to see a feasible business plan but to blow $26mil the SSB approves on the Minister’s assurances and sweet whispers from the building contractors.
Accountability makes a big difference. SSB has no expertise in the real estate business. This is not a core mandate. Who’s gonna be held accountable???
Once again, social housing is for the benefit of people who cannot afford housing. It is not so that SSB can turn a profit. The money used to build these homes came form the public purse, SSB act like it is their own personal account going on all-expense paid trips to Florida and the like. Time we put an end to their misappropriation of public money.
Even though I applied for one of the homes, I quickly lost interest when I noticed how they were being built and how close they are to each other. My non-interest was sealed when I heard the final costs and the home owners covenants. Somehow SSB mistakenly figured that buyers would invest in purchasing an apartment instead of a house and be subjected to live in such a condensed area with no privacy ans no yard space to call your own. But SSB knows it will get back it’s money since there are investors already lined up. SSB just killiing time and looking a legit reason to change the initial narrative of the homeowners initiative.
The ideal thing to have done was to collaborate with the National Bank of the Virgin Islands to offer 100% mortgage to prospective homeowners at a competitive interest rate. The government already had the lands, all they had to do was look at the salary scales of their target population (low/middle income workers), garner the resources from social security and build the houses at a reasonable cost based on peoples salaries. That would have given more persons a fair chance to afford a home that they can pay back for based on their income. It was done in Trinidad, Grenada, St. Vincent, Dominica and the great USA. Those are the countries that I know of, I’m sure there are others.