Non-payment of rent hinders future social housing, minister says
He added that non-payment not only affects state borrowing but also limits the government’s ability to offer housing to additional beneficiaries.
Housing Minister Dr Abdulla Muththalib has said that the failure of social housing flat recipients to pay rent is obstructing the state's ability to fund and provide housing for others.
Speaking on the Ahaashey Bunaann programme on PSM’s Dhivehiraajjeyge Adu, the minister stated that the government is working on proposals to fund future housing projects by using rent proceeds from existing social housing units as loan repayments.
He said that funds generated from the 7,000-unit Hiyaa housing project are required to be deposited into a separate escrow account established with a local bank, while rental income from the most recent 4,000 flats must also be placed in an escrow account with the Export-Import Bank of India (Exim Bank), as part of the funding conditions.
Dr Muththalib said that non-payment of rent poses serious challenges.
“If the money is not available, the opportunity for the state to obtain further financing to construct housing units becomes very limited,” he said.
He added that non-payment not only affects state borrowing but also limits the government’s ability to offer housing to additional beneficiaries.
“The rent amounts are not high, but when payments are not made, it deprives many others of the housing they are entitled to receive through government projects,” he said.
According to official figures, the state has yet to receive over MVR 728 million in unpaid rent from flats built under various social housing schemes.
