Land and Marine Resources Minister Jairam Seemungal yesterday defended the proposed changes to the Land for the Landless programme, saying the category of people who could access it was widened because the price of land was no longer affordable to the average citizen.
The cost of private lands has skyrocketed over the past few years making it impossible for young professionals to afford land, he said.
On Thursday, Seemungal announced at a post-Cabinet briefing that couples earning a joint income of up to $30,000 can now apply for subsidised land, developed by the State, under the Land for the Landless programme. Previously only people who had an earning power of between $8,000 and $10,000 could apply for land under the programme.
The announcement follows another initiative announced by the Government to distribute 100 government-subsidised houses every week for the rest of the year. The first distribution takes place today.
Since that announcement, hordes of people have been visiting the Housing Development Corporation to update their applications.
“What we realised is that because of falling oil prices, we will not have the funds to develop more sites, so we designed the project in a way that we can generate money to develop more sites for the lower income bracket. We will provide subsidy up to 70 per cent, so out of the $100 million that is being spent we will get back about $30 million,” Seemungal said.
“In Central Trinidad, a lot of land is being sold for $700,000. The prices are too high and we believe now that the Government is subsidising land that the price of private land will fall,” Seemungal said.
In a radio interview, Seemungal said the working class were now unable to buy land privately. For example, he said, police officers, soldiers and public servants were being unfairly treated since they were barred from applying to the programme due to their earnings.
He also questioned the availability of private land for sale, saying Government was the single largest land owner, with 60 per cent of lands in its possession.
Seemungal said under the $1 billion programme, which is yet to be financed, the land would be leased to the potential home owner, who had to begin construction within two years and could not sell it but could pass it on to relatives by way of a will.
He denied that the Land for the Landless programme no longer catered for the lower middle class or created an opportunity for the rich to manipulate the programme.
Based on income definitions from the World Bank in Latin America and the Caribbean, the middle class earns between US$10 and US$50 per day, roughly $6,400 per month. However, under the new stipulations, a couple’s joint income may be up to $30,000 a month to access the programme.
Seemungal said the World Bank projections did not apply to T&T where salaries were much higher.
“When we look at the salaries of police officers, teachers and other public servants we realise that the salaries are much higher than that of other countries in the Caribbean and elsewhere,” Seemungal said.
He explained that an On-the-Job (OJT) trainee with a first degree earns $6,200 per month while an OJT with a Master’s degree earns $8,000 monthly.
Seemungal said the new income bracket came about because the majority of public servants earned over $8,000 and so did not qualify for the two per cent interest rate being offered to low-income households by the T&T Mortgage Finance Company (TTMF).
Asked how many potential household applicants in T&T would benefit from this new arrangement, Seemungal said between 8,000 and 9,000 families.
He said under the programme 16 sites had been developed for first-time land owners using funds from the Inter-American Development Bank.
High Expenses
A young couple with two children, who live on the boundary of San Fernando, said even though they earned between $20,000 and $22,000 per month, they still found it difficult to afford land.
They agreed to give an insight into their expenses and lifestyle on the condition of anonymity.
“Food expenses for the month cost us $4,500, our car loan is $4,000 and after we pay household bills, electricity, cable, water rate, school fees and baby sitting fees, we are barely left with $5,000. Out of this we save $3,000 and use $2,000 for expenses during the month so we really cannot afford to buy property,” they said.
Now that the Government is offering subsidised land, owning and building a house seems like a dream come true.
“The programme gives people like us an opportunity to be able to afford land because we do not qualify for the two per cent interest rate that the TTMF offers,” they added.
Based on information obtained from the TTMF Web-site, a first time home owner could qualify for a two per cent interest rate if the household income is $8,000 or less to purchase any property valued up to $625,000.
The company offers no downpayment, up to 100 per cent financing of the purchase price and a re-payment term of up to 25 years. The mortgage may be extended to age 70 and is inclusive of $15,000 for major appliances.
Cost of Land
What is the cost of land?
A check in the real estate classifieds shows that land is being sold at exorbitant prices. Terra Caribbean’s Web site http://www.terracaribbean.com listed 11,808 square feet of land at Westvale Park, Glencoe, being offered for sale at US$147,140 or $10.3 million. At Graceland Heights in Santa Cruz, 9,943 square feet was priced at US$155,763.
Land was advertised at a cheaper rate in Enterprise, Chaguanas, where two lots of land were priced at TT$850,000.