Gov. approves measures to bolster Affordable Housing

for 1st time home owners

 By Giorgio Migliavacca

 The BVI goverment has put measures in place for a two-prong strategy to assist first time home owners in purchasing land at a low price and providing reasonable financing through the Development Bank of the Virgin Islands. To make this possible some 42 acres of land better known as “Stevens Land” at Greenland were acquired by the government in 1989, but only in 1997 the vast acreage was subdivided in house lots to be made available to first time landowners at a reasonable rate. At that time some 203 applications were received for 66 residential and two commercial lots.

In his detailed presentation at last week’s sitting of the Legislative Council held on 27 May, Minister of Natural Resources & Labour Hon. Alvin Christopher told Deputy Speaker of the House Hon. Eileene L. Parsons and Members of the House that the sub-division was completed, roads cut and in 2002 the list was revisited and names placed in categories by the Ad Hoc Committee upon the request of the Ministry.

A number of potential awardees complained that the cost of the land was “unfair” and the issue was raised again in September 2003 when the Ministry of Natural Resources received several complaints. Mr. Christopher told parliamentarians that in November 2003 the Executive Council (ExCo) approved the new price of 70 cents per square foot for residential and 90 cents per sq. ft. for commercial lots. Research at the Land Registry Department to investigate the possibility of prior land ownership of the potential awardees was carried out by the Ministry.

Hon. Christopher explained that as of 1 June his Ministry will commence issuing letters of commitment to those persons who do not own land, “Our next step will be to have ExCo approve new names as additional awardees, replacing those who we discovered already had real property,” the Minister of Natural Resources said.

GOOD TIMING

In a well concerted move during the same sitting of the Legislative Council Deputy Chief Minister and Minister of Finance, Health & Welfare, Hon. Ronnie Skelton moved a motion seeking approval for a loan of $5.5 Million by the BVI Social Security Board to the Development Bank of the Virgin Islands. The 20-year loan is subject to a 5-year grace period on the repayment of the principal sum at an interest rate of 4.5 per cent per annum. The interest rate is renegotiable after the first five years.

The motion was amply debated by members on both sides of the House, notably by Leader of the Opposition, Hon. Ralph T. O’Neal, and Hon. Mark Vanterpool, Hon. Paul Wattley, Hon. Julian Fraser and other members. Dr. the Hon. Kedrick Pickering highlighted the fact that the order of the day included a statement by Hon. Alvin Christopher outlining what is being done with the Stevens Land plan: “and you see the Minister of Finance already putting a system in place to ensure that the individuals who will be the beneficiaries of that land will also have an approach with which they can move forward. So, we are trying to do things in a way that is organised and structured to help our people.”

In wrapping up the deliberations before putting the motion to the voting test, Hon. Skelton said that he will make sure that the Development Bank will become more efficient: and in fact “the bank has some challenges that need to be fixed before this financial institution goes to the next level,” he said.

SOCIAL SECURITY LAURELS

The Deputy Chief Minister added that the bank’s performance during the last three years indicates that steady progress is being made. Mr. Skelton further noted that the BVI Social Security Board is a model for the entire Caribbean “and probably the world.”

The motion was passed. First time home owner have now the opportunity to borrow up to $125,000 at a rate of 9 per cent per annum. “The mortgage scheme has been very beneficial to people of this Territory and we shall make every effort to make the resources available to continue the scheme,” Mr. Skelton said.

The Minister of Finance pointed out that the passing of the motion brings Government’s debt obligation to $97,809,837, while the contingent loan liability (Government’s guaranteed loans to statutory bodies and corporations) stands at $37, 012, 558.

The British Virgin Islands Social Security Board was established by an act of the Legislative Council No 17 of 1979. It did not come into effect until July 2nd 1980.

The Social Security Board comes under the portfolio of the Minister of Finance, Hon. Ronnie Skelton. The Minister appoints a Board of seven. The Board is responsible for the management of the Scheme. The Act specifically charges the Director with the responsibility for the management of the funds, in particular the collection of the contributions and the payment of benefits. In the case of loans to a statutory body (such as the Development Bank of the V.I.) the loans can only be made after the Legislative Council has passed a resolution giving its approval for the making of the loan and the government of the BVI is the guarantor of every loan so made.

As of December 31st, 2003, the BVI Social Security Board attained in excess of $200M in investments. This is comprised of $64M in CDs, $93M in fixed income, $12M in loans, $13M in managed assets and $1.8M in fixed assets.

DEVELOPMENT BANK’S PERFORMANCE

At the end of 2002 the Development Bank of the Virgin Islands had total assets for $54 Million, and cash investments at $14 Million. Despite global economic slow down, during the same year customer deposits grew at a phenomenal rate of 26 per cent or $10 Million surpassing the previous year’s growth rate of 22 per cent to end the year at a high of $36.8 Million. To give an idea of the growth of this local financial institution the reader should consider the following facts: in 1988 deposits were $245,000 and  in 1997 about $15 Million — in 2002 almost $37 Million. The Development Bank of the V.I. is wholly owned by the BVI government. The principal activity of the 30-year-old bank is to provide loans for the social and economic development of the Territory.