With the government’s decision to prolong the grace period for Hiya Flat tenants for another three months, the Housing Development Corporation’s (HDC) predicted loss has risen to more than MVR 171 million.
The government’s initial move was to begin collecting monthly rent of MVR 7,500 and a service charge of MVR 1,000 from tenants of 6,720 flats beginning next month, with payments spread out over a 25-year period.
However, due to awaiting finishing work on the units by the majority of occupants, the government postponed the start date for collecting rent to April 2022, a three-month delay announced by President Ibrahim Mohamed Solih on Sunday during a special ceremony commemorating the 17th anniversary of the Tsunami tragedy and National Unity Day.
According to local media Mihaaru, the government’s decision to defer rent payments would cost HDC more than MVR 57 million every month, totaling MVR 171.4 million over a three-month period.
While numerous tenants have asked for rent reductions, the government responded by stating that the social housing project was backed by a huge loan that must be repaid to China within 13 years.
The original rent for the flats in the social housing project, which was begun by former President Abdulla Yameen’s government, was set at MVR 5,600, however HDC maintained that the “calculations were incorrect” and that the project was completed by the company that submitted the highest bid price.