Houses for those living near canals

More than 100,000 households to be considered for the homes; officials also mull property fund to finance low-income earners

Social Development and Human Security Minister Santi Prompat has a policy for the National Housing Authority (NHA) to build homes for more than 100,000 households now living around 29 canals in Bangkok and its suburbs.

This will follow the flood-control policy of the Strategic Committee for Water Resources Management, he said.

He added that this policy would come under the Baan Ua-Athorn low-income-housing scheme for 400,000 units nationwide. It will be proposed for Cabinet approval as soon as possible.

"The government may be able to support a budget of Bt120,000 to Bt160,000 per unit for Baan

Ua-Athorn, or Bt48 billion to Bt64 billion for the whole project of 400,000 units. This is higher than the subsidy budget averaging Bt80,000 per unit of Thaksin's government because of higher construction costs," the minister said.

Baan Ua-Athorn was launched in 2005 as one of the populist policies of then-prime minister Thaksin Shinawatra. The project, which initially targeted building 600,000 housing units, saw the NHA's debt rise to Bt100 billion, until the Democrat government under Abhisit Vejjajiva lowered the target to 285,000 units. The agency's debt now stands at Bt40 billion.

There are currently 50,000 Baan Ua-Athorn units for sale, which the NHA aims to sell in

fiscal years 2012 and 2013.

Property fund

Santi said he was also setting up a policy for the NHA to study establishment of a property fund to finance low-income customers who cannot get mortgages from commercial banks.

"This would help the NHA's cash flow to manage its residential projects, including Baan Ua-Athorn," he said.

The NHA has provided mortgages for 30,000 customers, with loans averaging Bt400,000 each, or Bt15 billion in total.

NHA governor Vitoon Chaisakul said most of its customers were able to service the loans.

"Most of them pay back the loans on time, as fewer than 5 per cent have financial problems," Vitoon said.

However, Santi said the government needed to study the property-fund idea to see whether it was legally feasible.

Five-year plan

Besides the Baan Ua-Athorn scheme and the new proposal for canal-side residents, the NHA also has a five-year business plan that is waiting for approval by the National Economic and Social Development Board next week.

The five-year plan for 2011-15 includes building 100,000 residential units with an invest-

ment budget of Bt114.7 billion. These are separated into several categories.

The first is 65,000 units for lower-income people priced lower than Bt1 million each but still higher than those of the Baan Ua-Athorn project, which are priced no higher than Bt600,000. Second, there will be 2,700 primary units located close to the mass-transit system costing less than Bt2 million. Third, 3,000 units will be rental residences for state officials. The last 29,300 units will be developed in accordance with market demand, Vitoon said.