The subsidy criteria was also reviewed in 2010 and applied to these estates where rent had been reviewed in order to maintain affordable rent charge. A property valuation of all PRB properties was undertaken to determine market rent charges and claimed the non-commercial obligations (social cost) from Government’s annual subsidy grant. Subsidy is allocated according to the subsidy agreement between the Line Minister and the Board. New subsidy criteria (2010) and rent charge would only be applicable to the estates where general renovation has taken place and rent were reviewed.
The old subsidy criteria of year 1999 will continue to be applied to the estates where renovation has not commenced and rent has not been reviewed.
The old 1999 and revised 2010 subsidy criteria are provided herein as follows:
Public Rental Board adopted its first subsidy allocation criteria in 1999 as follows:
|1||Weekly Gross Income $0 – $64||5% of Income||Tenant Contribution = 5% of WGI|
|2||Weekly Gross Income $65 – $80||10% of Income||Tenant Contribution = 10% of WGI|
|3||Weekly Gross Income $81 – $100||15% of Income||Tenant Contribution = 15% of WGI|
|4||Weekly Gross Income $101 – $125||20% of Income||Tenant Contribution = 20% of WGI|
|5||Weekly Gross Income $126 – $150||25% of Income||Tenant Contribution = 25% of WGI|
The Board of Directors in 2008 and 2009 envisaged amending this criterion for a fair and just distribution. Hence the subsidy allocation criterion of 1999 was updated as follows and renamed as 2010 subsidy criterion:
|1||Weekly Gross Income $0 – $80||5% of Income||Tenant Contribution = 5% of WGI|
|2||Weekly Gross Income $81 – $100||8% of Income||Tenant Contribution = 8% of WGI|
|3||Weekly Gross Income $101 – $125||11% of Income||Tenant Contribution = 11% of WGI|
|4||Weekly Gross Income $126 – $150||14% of Income||Tenant Contribution = 14% of WGI|
|5||Weekly Gross Income $151 – $175||17% of Income||Tenant Contribution = 17% of WGI|
|6||Weekly Gross Income $176 – $200||20 % of Income||Tenant Contribution = 20% of WGI|
It is to be noted that the 2010 subsidy allocation criteria would only apply to those estates where renovations has taken place and some structural improvements have been made.
In addition to this the Board of Directors also resolved to introduce a minimum tenant contribution of $5.00 where tenants are really poor and systematic calculation of tenant contribution is less than $5.00.
It has been noticed that with the increase in rent charges, more tenants are subsidised now with rental subsidy. However tenants need to produce evidence where they cannot pay these new rent charges before they qualify for subsidy assistance. The non-commercial obligations are passed on to tenants and compensated by Government via rent subsidy. Some 45% of the Board’s tenants are considered financially disadvantaged and to whom Government had subsidised their rent in past years.
Rental estates where new rent charges have not been applied will continue with the 1999 subsidy criteria and non-commercial obligations claimed from Government grant accordingly.
Executive Managements of both entities HA and PRB has been having series of discussions on collaborative funding and construction of rental flats. It is proposed that all land acquisition and development would be undertaken by HA for their subdivision and as agreed some portion would be reserved for PRB and other social housing providers. This was to allow PRB to concentrate its effort in management of properties rather than duplicating land acquisition and development processes currently being undertaken by HA saving resources which could be utilized elsewhere. The final outcome is to provide for affordable and quality rental housing for PRB tenants.
Parcels of land that have been identified by HA are:
There are some vacant land available within PRB estates such as Simla, Namaka, Raiwaqa Ex-Sewerage, Raiwaqa Ex-4 Storey, Votua, where flats could be constructed. All funding would be provided by Government progressively.
It is proposed that the Government of Fiji would provide capital grant to PRB on annual basis. In the past PRB explored the option to finance via borrowing from market however due to the cost of capital, the risk of not being able to repay the loan, and the inability to obtain Government guarantee, the loaning option was cancelled.