Housing policy imperatives – part 1

Proper housing is an essential part of decent human rights and the development of a just society.  For those of us who have proper housing, we can be virtually blind to the plight of those who do not.

Dr. the Honourable  Roodal Moonilal, Minister of Housing and Environment
Dr. the Honourable Roodal Moonilal, Minister of Housing and Environment

We now have a new government – the People’s partnership (PP) – and given  the swirling claims and counterclaims around State housing, it is important to re-open this discussion.

The first aspect of housing policy to be considered would have to be the basic model – ‘What is it?’

The main housing policy of the first UNC government was to provide serviced lots – i.e. land was acquired and developed with infrastructure (roads, drainage, electricity and water supplies etc.) before being distributed.  That approach is based on the notion that it allowed the State to have a positive impact on the housing shortage with the use of limited resources.  Between 1995 and 2001, that policy yielded a modest result, since only about 2,200 serviced lots were sold, with 376 new homes built.

Showing Trinidad and Tobago A New Way HomeThe current national housing policy, entitled “Showing Trinidad and Tobago a New Way HOME” was initiated in September 2002 by then Minister Danny Montano with the stated goal being 100,000 new homes to be built in a decade.  The annual  target was soon reduced to 8,000, with those new homes to be sold to applicants.  The aim was to increase the quantity and quality of housing available to those who were unable to afford housing in the open market.  That program never achieved its targets and there was a consistent pattern of over-stating its achievements.  The last claims we heard were that the total output had been adjusted (downward, of course) from 26,000 to only 15,394 new homes in the 7-year period from 2003 to 2009.

In terms of gross output, the PNM policy easily outstripped the UNC’s, even if, in terms of its own targets, it was a signal failure.  From the aspect of output versus target numbers, the results are so mixed that it is difficult to settle the question of which policy was the more successful one.

For me, a key test of a housing policy’s success would have to be the number of people who have benefitted from an improvement in the quality of their housing.  In that case, the existing policy is seriously wanting, since, despite the output of 15,394 new homes, most of those remain in the hands of the Housing Development Corporation (HDC).  Just like with the actual numbers built, there has been a pattern of cover-up, shifting figures and plain dishonesty.  Despite my efforts, I am unable to locate a published record of how many of these new homes have been given out.

Dr. Moonilal, we need a clear statement of just how many new, empty homes the HDC has on its hands.

“Rent control is a thorny housing policy issue, but it deserves a second thought, since so many of our needy citizens occupy rented housing”

I went to the 2007 conference of the Caribbean Association of Housing Finance Institutions (CASHFI) and the PS of the Ministry of Housing said that a major issue was the fact that about 90% of the people on their waiting-list could not qualify for a mortgage.  If the objective of the existing model is to promote home ownership in preference to rental units and 90% of the applicants cannot afford to buy, there is a clash between those policies and the reality of the needy.

New forms of housing finance were devised to overcome that hurdle and those included mortgages –

  • at 2%;
  • with zero-percent deposits;
  • even 100+% models which allowed the new home owner to spread the cost of appliances and furnishings over the period of the mortgage.

We need to re-consider our housing policy in fundamental terms –

  • What is the extent of housing need in our country? In last week’s ‘BG View’, there was a call for the national pensions proposals to be based on the results of the 2010 census – see http://guardian.co.tt/business/business-guardian/2010/06/17/pension-promises-deferred .  The review of national housing policy must be based on realistic housing need data and that should also emerge from the census later this year.  In “A critique of State Housing Policy‘, published here on 2nd August 2007 – see http://www.raymondandpierre.com/articles/article35.htm – I proposed that our country has a 5-part housing market.  In my view the task would be to determine the numbers occupying each parts and which of them we intend to provide for.
  • Is large-scale construction the only way to assist those in housing need? Another aspect which needs review is the matter of rent-control, since that is a cheap way of assisting those in housing need without spending vast sums of taxpayers’ dollars.  The reality is that although rent-control legislation remains on our law-books, the rent control boards which regulate that area of civic affairs have been allowed to wither and die.  Rent control is a thorny housing policy issue, but it deserves a second thought, since so many of our needy citizens occupy rented housing.
  • Are we at realistic limits in terms of tenure? To make a simple contrast, in 1992, when US President Bill Clinton launched his expansionary proposals to ramp-up home-ownership, about 62% of the homes in the US were owner-occupied.  At the end of 2008, after a massive and disastrous experiment intended to increase home-ownership, about 68% of US homes were owner-occupied.  Our current home-ownership percentage is about 76%.  Given the poverty of those on the waiting-list, does it really makes sense to keep on building new homes for sale to poor people.  Are we at the ‘Limits to growth’ where home-ownership is concerned?
  • What types of homes should we build? Large swathes of agricultural land have been ‘paved-over’ to build these  new homes, which is to the permanent detriment of our food security, to name just one obvious concern.   The fact is that we do not have enough land in this country to continue that pattern of large-scale development.

Next week, the focus shifts to issues of build quality, allocations policy, land grabbing and value-for-money aspects.
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4 thoughts on “Housing policy imperatives – part 1

  1. Of modes and men

    Several concerns. 1 is that I am startled by the 76% owner occupied statistic. I’m wondering about the basis of the previous regime’s intended property tax. Also in that same mix is the question owner occupied with rental quarters (usually downstairs).

    Major question remains mode of construction. Culturally ours is a housing stock overwhelmingly of the bricks and steel type. Little thought to modular types of building which have become far more efficient over the last 30 years. Not all prefab is of poor quality. And then there is the question of durable hardwood as a major material. Housing policy must make some sense of available alternative technology. There’s some very good methods used in South Africa using raw gravel and building solid houses in a fraction of the time it takes to lay down convention bricks.

    2nd concern: There is no aspect of our housing policy which makes sense of the relationship between scale, land development (non-housing), finance, and technology (including more assertive engineering modes). On top of all of that what about the aged portion of the housing stock in older developments like Plaisance Park? And not just the houses, the fact that these residents themselves are now seniors and the management of the district needs to make sense of their needs.

  2. On rental policy – are we saying…
    That we don’t need a rent control policy any more? Surely that’s worth a look eh? And can that be linked to income? Inspections would be key. Registration of rental accomodations – taxes on this income – that sort of thing. Surely NOBODY in Trinidad & Tobago who is providing a lodging downstairs is paying income tax on these earnings? And yet, the banks have financial terms specifically linked to rental income.

  3. I
    After the fourth paragraph, I wonder if it is appropriate to do some analysis to determine what are the reasons, causes, levers, factors for the failure of the policy as prescribed. For instance, if “between 1995 and 2001 only ~ 2,200 serviced lots were sold, why were there only 376 new homes built? What are the gaps there?

    Devising ways to highlight these factors will bring the country closer to an effective, relevant and workable housing policy, I think.

    II
    this paragraph:
    “In terms of gross output, the PNM policy easily outstripped the UNC’s, even if, in terms of its own targets, it was a signal failure. From the aspect of output versus target numbers, the results are so mixed that it is difficult to settle the question of which policy was the more successful one.”

    screams out to me the lack of integration and national policy prescriptions and implementations apart from party and politics; it shows the lack of institutions, systematic processes and procedures that results in a total lack and inability to streamline effects, results, observations. What is yielded is a running in circles, spinning top in mud. We never know where we are, where we left off, what are the gaps, causes, drivers; no evaluations. no rules and accords by which to conduct such evaluations. I think this outline points to a national policy gap that if we are to discuss any policy or development failure, has to be addressed. We need to start doing things in a different way if we want different results,which takes me back to the underpinning of my comment on the introductory page: why do we think the new administration will come up with a different plan and results if things are done the same: viky vy*, driven by what information, what inquiry, what research?

    We really cannot have a cogent discussion on policy of different dispensation if we cannot compare and contrast procedures, let alone results.

    III
    this is an interesting highlight
    “Rent control is a thorny housing policy issue, but it deserves a second
    thought, since so many of our needy citizens occupy rented housing”
    as I consider it to not give an accurate picture of the extent and depth of unmet demand for housing. Rental property is not the mark, the watermark I believe would be the numbers of persons, individuals, couples and families living on family compounds or combined housing for their lack of ability to pay rent at all.
    Are such statistics collected? Implication for the operations of Central Statistic Office?

    IV
    “there is a clash between those policies and the reality of the needy.”
    anecdotal evidence and information to the failure of policy?

    Are you tied into UWI, Afra? Your columns is great fodder for UWI students and class material, for research exercise and generation of valuable information. The questions and research hypotheses raised are invaluable

    “even 100+% models which allowed the new home owner to spread the cost of appliances and furnishings over the period of the mortgage.”
    that is amazing: on the front end it appears as a benefit, but on the back end this cannot be a service to owner, only to banks and finance companies.
    I think this kind of financial structure plays a role in transaction and opportunity cost to the economic decisions made by the informed

    I think these may all point to possible reasons for policy failure

    V
    “Given the poverty of those on the waiting-list, does it really makes sense to keep on building new homes for sale to poor people.”
    I know this is and was the target of said housing policy, “poor people” but this too needs to be tested, investigated and interrogated. Isn’t there the perception that the HDC houses have been for the well-endowed and heeled?

    Research required: who owns, and lives in HDC housing, of all stock and description?

    VI
    “Housing versus Food Security”
    has to be a huge part of any inquiry into this nation’s housing policy and the thinking that gave berth/birth. How can this be valuable given comparative advantage? what is going on economically, institutionally, politically, socially that this is the dichotomy? Problematic to say the least.
    And above all, what of this dichotomy in a small and limited land space…what was the forward thinking and impact of these policies to a 2×4 island?

    Some worthy questions I think to show up the falter that led to the massive failures, at great cost of never returning (can’t break up concrete to return lands to agriculture production.

    Good Article

    1. As to the question of the uncounted numbers of our homeless citizens, I have delved into that at http://www.raymondandpierre.com/articles/article35.htm – where I set out my 5-part analysis of the housing market in our country.

      The HDC needs a thorough examination and was able to escape the searchlight of the Uff Commission, by dint of sheer filibustering by the last government, up to and including the ‘missing $10M’ at Cleaver Heights….or was it $20M??

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