In the budget this year, the government has pledged to deliver no less than 12,000 social housing units by 2024 to help resolve the housing problem for the poor and middle class. The likelihood of this target being met is slim if we look at the poor track record of successive governments in delivering on such promises that created the housing problem in the first place. What do the government’s own figures show?

The background of the problem

The government has pledged to spend Rs12 billion to build and deliver 12,000 social housing units by the end of its mandate in 2024. If this looks familiar, it is because the same promise was made in the 2020-2021 budget in the midst of the Covid-19 outbreak.

The pledge has come because it has become increasingly difficult to ignore the fact that Mauritius is facing a growing problem when it comes to delivering social housing, primarily through the state-owned National Housing Development Company (NHDC), which has been responsible since 1991 for the construction and delivery of social housing units around the country. This problem has been long in the works and successive governments have contributed to making it worse. Just to get some idea of how long this crisis has been brewing: according to NHDC figures, between 2001 and 2007, it got 8,063 applications but delivered only 4,360 housing units.

In April 2008, it seemed an opportunity to finally solve the problem presented itself in the form of a deal between the then-Labour Party government and the Mauritius Sugar Producers Association (MSPA), who in return for state assistance in restricting the sugar industry, agreed to hand over 2,000 arpents of land to the state, 1,000 arpents of which would be used for social housing. As it turned out, much of the land handed over by the sugar industry was found unsuitable for social housing development, and things seem to have slowed down still further: in 2007, 2008 and 2010, no social housing units were built.

In November 2013, the Office of Public Sector Governance looking into the NHDC pointed out with concern that between 2001 and 2012, instead of building 1,000 homes as was needed to keep up with demand, successive governments were delivering an annual average of only 473. The numbers were hard to argue with, the backlog of social housing demand was growing by the fact that between 2001 and 2012, the NHDC received 19,513 applications for housing but delivered just 5,684 units. It was this dismal record that led current deputy prime minister Steven Obeegadoo to remark in parliament on April 20, 2021: “Let me remind you that between 1991 and 2019 when this government comes into office, 14,451 housing units were built, of which only some 1,900 over the 2005 to 2014 decade… the result is a total disconnect between supply and demand.”

The record since 2014

While the MSM-led government that came into power in 2014 castigated the previous Labour Partyled government for not doing enough on the social housing front, the data indicates that they too have underdelivered – consistently missing their own targets – making the problem even worse. During the 2014 elections, the MSM-led alliance promised that they would build 10,000 homes across the country, significantly improving the backlog for social housing. This reached a crescendo when in 2016 the government came up with the Marshall Plan against poverty to great fanfare, a major component of which was investing heavily in building and delivering homes to poor and middle-class families.

The reality, NHDC figures show, is somewhat underwhelming. Far from the 10,000 units promised by the end of 2019, by the time 2018 rolled around, the NHDC had delivered just 1,057 homes. Thenhousing and lands minister Mahen Jhugroo insisted on May 15, 2018, that despite the numbers, the government was still on track to deliver its target: “We are going to construct not only 10,000, but it will be above 10,000 housing units because this Government means business, and this is our target.” He added that in 2019, the government would deliver 2,588 more houses. In reality, it was 384.

The writing was on the wall. To help the situation in the 2018-2019 budget, prime minister Pravind Jugnauth (who at the time also held the finance portfolio -ed.) stated, “The NHDC will start a vast programme of construction in 2018-2019. Our aim is to build 6,800 new social housing units over the next two years. The endeavour has a project value of Rs12.7 billion.” This Rs12.7 billion figure would recur again. So, the government would pump in Rs12.7 billion to help reach its target. How many homes were delivered? In 2018-2019, it was 112 and in 2019-2020 just 112. By February 2019, the UN Committee on Economic, Social and Cultural Rights criticised the Mauritian government for not doing enough on this problem.

The promise was for 10,000 homes by 2019. But by the end of the previous MSM-led government, the problem just got worse: the number of new applications put in each year for NHDC housing grew by 50 percent from 1,804 in 2015-2016 to 2,805 in 2019-2020, whereas the number of homes delivered each year fell even more sharply by 77 percent from 485 in 2015-2016 down to just 112 in 2019-2020. The result was all too predictable: when the government came to power at the end of 2014, 16,543 poor and middle-class families were on the waiting list for NHDC housing; by the end of its last mandate in 2019 it was 25,582. By April this year, Obeegadoo conceded, “We all agree that there is a stark mismatch in Mauritius right now between the demand for housing and the supply which a dysfunctional market cannot address.” Left out of the explanation was how previous government chronically missing their own targets to provide low-cost housing had helped deepen the hole.

Just how dysfunctional all this has become can be gleaned from a startling statistic. Out of the applications approved and put on the waiting list by the NHDC, the growing backlog means that by 2020, out of the 25,582 people on the NHDC’s waiting list, 30 percent of them have been languishing on that list for more than 10 years. And 13 percent (7,961 households) have been on that list for more than 20 years. This, according to a report released by the National Audit Office in June this year.

Not just the NHDC…

So far, the data has been about the NHDC. But the government has also been running another scheme, under the National Empowerment Foundation (NEF) to build houses for those who own plots of land but are too poor to build homes on them. Although smaller in scope than the NHDC, nevertheless, here too, the government simply has not been able to keep up with its own targets.

The Labour Party-led government in power until the end of 2014 paid for the construction of concrete houses with corrugated iron roofs. However, in April 2016 this was replaced by the MSM-led government’s scheme to build fully concrete houses. In 2016-2017, the NEF put aside Rs110 million to build 126 such houses by December 2019. However, according to the National Audit Report, by December 2020, only 102 of them had been built and delivered.

Since then, the programme has just seemed to run out of steam, with delivery falling with each year even in this category of social housing. According to the NEF’s own figures, in 2017-2018, the government set a target to build 93 such houses, but only 81 were built and delivered. In 2018-2019, the NEF planned to build 40 such houses, but by December 2020 none had been completed and 50 were planned in 2019-2020.

The promise of 12,000 homes

The long history of successive governments failing to deliver on social housing, and their own promises, makes it unlikely that the current promise to deliver 12,000 social housing units across the country would succeed either. And that too because this is not really as new a promise as all that. In the 2020-2021 budget, finance minister Renganaden Padayachy said, “No citizen will be left behind in the development process. That is why today, I have announced an exceptional effort to construct 12,000 residential units over the next three years for Mauritian families with a monthly income of up to Rs60,000.” This year, the pledge reappeared in the 2021-2022 budget with Padayachy saying, “Government will invest some Rs65 billion in priority projects over the next three years: (a) Rs11.7 billion for a National Flood Management Programme; (b) Rs12 billion for the construction of 12,000 social housing units”. He added that these 12,000 social housing units would be in addition to the 1,285 housing units already planned for this year by the NHDC.

If the number Rs12 billion sounds familiar, it should. Remember the 2018-2019 budget presented by Pravind Jugnauth? It promised to spend Rs12.7 billion to build 6,800 social housing units. But now the current finance minister is allocating even less money (Rs12 billion-ed.) and promising to somehow deliver almost double the number of homes – not 6,800, but 12,000.

But arithmetic aside, this new project is also different in another way. Whereas past efforts relied directly on the NHDC, the new target of building 12,000 homes is being run by the New Social Living Development Company (NSLDC) – a wholly-owned special purpose vehicle (SPV) and an NHDC subsidiary set up in 2019 and based in the SICOM tower in Ébéne. On the one hand, this is in line with the current fashion of the government increasingly relying on SPVs to manage major public projects; recently this system has been used to finance the Metro Express, projects of the Central Electricity Board and the Bank of Mauritius to lend to major corporates via the Mauritius Investment Corporation. This tendency has been criticised by the April 2021 World Bank’s report on Mauritius where it warned, “the government should also revaluate and minimize the use of extra-budgetary special purpose vehicles as they limit the effectiveness of the budgetary process and medium-term fiscal framework necessary to manage and control expenditure, and potential fiscal risks”. Put simply, the new NHDC subsidiary in charge of delivering on this social housing pledge would operate outside the purview of procurement rules and government auditors. And although the NHDC is 99.5 percent owned by the government, 0.3 percent by the State Investment Corporation and 0.2 percent by SICOM, its new subsidiary is under much less public scrutiny.

The NHDC also has a poor record when it comes to its own balance sheet. Essentially a housing bank – selling houses on credit with the houses themselves serving as security – the 2013 report by the Office of Public Sector Governance pointed out that the NHDC “has an enormous amount of revenue in arrears as more than 50 percent of its clients are in arrears”. In addition, there is another reason why the government would want a new name for its project: the NHDC itself has courted political controversy of late. In 2017, the then-housing and lands minister Showkutally Soodhun was forced to step down after a recording leaked of him allegedly making ethnic remarks about housing allocations at an NHDC project in Bassin consisting of 51 duplex housing units. Although on September 25, 2019, the Intermediate Court cleared Soodhun of the charge because the court found that Soodhun as minister did not directly control the NHDC and the unreliability of Vivek Pursun who made the allegations against Soodhun, the scandal stuck politically. Soodhun was not given a ticket for the 2019 elections that followed and the image of the NHDC endured an immense amount of damage publicly.

The government is looking at this promise to significantly alleviate the social housing crisis. If history is any indication, the less than stellar record of all major parties and past governments – including the MSM’s own previous one – does not leave much room for hope. And it remains to be seen whether the government can break with the past and finally start resolving the social housing problem, rather than simply make it worse.