After the National Housing Development Corporation Limited (NHDCL) issued eviction notification to vacate the units of Changjiji housing colony, the implied tenants had requested the authority for extension. Despite being extended for a month, the NHDCL however, will not consider their request hereon. Nevertheless, only vulnerable groups might be considered to occupy the flats further.
The Infrastructure and Transport Minister, Chandra Bdr Gurung during the 11th meet-the-press on Friday said that exceptions could be considered for vulnerable groups such as single parents with school-going children and tenants with serious medical conditions or dependents with disabilities.
The Minister said that the tenants of the Changjiji Housing Colony and other housing areas in Thimphu may continue to occupy their units provided they meet the criteria that ‘neither the tenant nor their spouse should own any building under Thimphu Thromde.’
Other criterion is that the combined gross salary of the tenant and their spouse must not exceed the income threshold set for the respective housing category.
These conditions are designed to ensure that government housing is allocated to genuinely deserving tenants and to prevent higher-income tenants from occupying units unnecessarily.
Why is Gross Household Income Considered Instead of Net Income?
Earlier, the tenants from different housing colonies told Business Bhutan that the concerned authority should have considered net income, not gross income.
However, NHDCL responded that the gross household income is standardized, providing a consistent metric that avoids discrepancies caused by individual deductions like loans or advances, which can vary widely among tenants. To simplify calculations, only the incomes of the husband and wife are considered.
Gross income includes all allowances drawn as part of the salary, as these are also forms of income. This approach ensures a comprehensive assessment of the household’s financial capacity.
Why Should Tenants vacate, when Income Thresholds are exceeded?
Exceeding the gross income threshold indicates that the tenant is financially capable of seeking alternative housing.
According to the NHDCL, most tenants disqualified based on income thresholds have advanced to higher grades (P4, P3, or P2) and government housing units are primarily reserved for employees in grades S4 and below. It is said that allowing higher-income tenants to remain would prevent access for others on the waiting list.
Should the Government Allow Certain Tenants to Remain Until Retirement?
The Minister said that in general, tenants who exceed the income threshold or have progressed to higher grades should vacate to provide opportunities for others in need.
What says the Ministry of Finance?
The Ministry of Finance (MoF) responded that the government has endorsed the proposal of NHDC to allow residents to occupy Chanjiji housing colony until retirement from the initial restriction of 10 years. In essence, the government has lifted the 10-year maximum occupancy limit.
The MoF emphasizes that to uphold the true essence of housing affordability; certain conditions must be upheld or possibly strengthened. These include requirements such as employment within Thimphu, a prohibition on owning property in the city, and residency restricted to low-income groups. For instance, individuals who own buildings within Thimphu Thromde will not be eligible for residency in the housing colony. Additionally, families whose household income exceeds the low-income threshold will lose their eligibility for housing units, making way for those with lower incomes. NHDC will conduct these assessments, and these criteria are essential for ensuring that housing units are allocated specifically to low-income, deserving households.
Regarding net income, statutory deductions—such as contributions to the provident fund, health insurance, and personal income tax—are based on gross income and are consistent for individuals within the same pay scale. Similarly, allowances such as one-time pay revisions and a 5% indexation are uniform for people on the same pay scale. This standardization of statutory deductions and allowances ensures that the net impact on personal income remains consistent. However, other personal deductions, like loan repayments, will vary based on individual spending choices. Therefore, it would not be practical for the government to factor in the diverse personal financial decisions into the housing allocation criteria.
The NHDCL reinforced the eligibility criteria for housing units at the Changjiji housing colony about a month ago, which rendered in about 25 families occupying the houses ineligible. Eviction notices were issued thereafter, causing concerns among the affected households.
By Sangay Rabten from Thimphu
