Reducing Poverty through Cutting Cost of Living
Basic accommodation is an integral part of our lives. In every country in the world, you will meet thousands of residents who are in search for affordable homes that meets their standards. However, not many can meet the economic implications of a decent housing, thus locking out most of the people from owning homes.
This has caused the number of the homeless to increase as well as rapid increase of alternative housing such as slums which are prevalent is several urban areas. The worse bit about all this is the continual growth of populations in most countries; hence the need for intervention before the menace spirals.
There is the need for governments to intervene and set out actions which will help address the shortages of housing. There is need to embrace various models which can adopt to help in the provision of affordable housing to address the menace.
Measure to Support Cheap Accommodation
Having worked for a real estate for a long time as well as house consultant for several firms, I believe that a good assessment of the various models can help address the housing situation in various ways as I will detail below. The ultimate goal should not only be boosting inexpensive living, also providing investment opportunities of the private sector through partnerships and boosting economic growth through the creation of jobs in the housing sector.
It must be noted that the various models which may be adopted will seek to use taxpayers’ funds; hence the need to safeguard the investment of taxpayers’ money used especially when it comes to securing private investments in the provision of housing. That said, I don’t mean that the confidence of private investors should be jeopardized by low payments nor should the tenant’s rights be disregarded, but any model involved should meet the regulatory standards as well as any statutory requirements. Basically, the whole sector should have a high level of integrity.
Using Debt Guarantees to Support Private Sector
The government can support and encourage private investment by offering debt guarantee. The ultimate goal of such a move is to support private investment in building new homes. By doing so, investors will be at a position to reduce the cost of borrowing credit because of the government guarantee thus attracting investment especially for those investors who may fear to be exposed to any perils revolving around property.
However, such a move should be in accordance with strict regulations on when the financing will be cleared by the investors and a good asset cover for the financing. There is need to have a clear structure and a viable strategy on how the financing and repayment will be done to avoid any losses by the government.
Providing Subsidies to Lower Rental Costs
Regional departments and councils can also liaise with housing providers and come up with a strategy that will help them reduce the rates and rent for tenants. One of such methods is by providing subsidies so that low-income earners can too be at a position to afford housing. The subsidy should be fair for owners of rental property according to the value of their houses so that property owners do not feel frustrated by the parties involved. Moreover, it should be sufficient enough to for the tenant to make the cost of housing more attractive and inexpensive.
Provision of Tax Benefits for New Home Owners
Citizens can be encouraged to own homes by the provision of tax benefits. This means that a new home owner will benefit from deducting mortgage interest or property levies form their income tax. Such benefits may be encouraging to potential home owners who will feel the impact of the reduced cost and may decide to own a home.
Refurbishment of Social Housing
In every country, there are various social housing units established and run by the county governments. There is need to increase the number of such units in state-owned land as well as refurbishing the old one to meet the set standards. Low-income earners should be given the first priority of settling down in the new units established so as to bridge the gap between the poor and the rich.
Also an audit should be carried out for all those who live in such housing units to establish if everyone has lawfully occupied a unit. This is vital in those countries where there are many citizens on the waiting list of social homes but never get the opportunity because of illegal occupation by some tenants.
Refurbished units can be sold to tenants who may have occupied the units for several years so as to enable them to own a home. Such may be tenants who are nearing the retirements age but have never have had a chance to own their own homes.