Property Matters – St Augustine Nurseries, part three

northgrove-planIn writing these articles on St Augustine Nurseries — Part 1 and Part 2 — I found my thoughts returning to those poorest of HDC’s applicants who simply cannot afford to buy. I reflected on the fact that many of our leading citizens emerged from very humble backgrounds which ought to have entitled their families to the benefits of subsidised housing. This is the final article in that mini-series, so I will be locating St Augustine Nurseries within the wider context.

rowley-bookFrom my reading of Dr Rowley’s autobiography ‘From Mason Hall to White Hall‘ it is clear that similar situations prevailed in his own early life. Between pages 32 and 33, Dr Rowley recalls his first visit to Trinidad to stay with his late mother, ‘Vassie’, at her rented home in John John – he was an eight-year-old, so this would have been 1957 or so. The crowded and unhygenic conditions he describes make it clear to me that Ms Rowley’s case was one which would have surely been worthy of public housing subsidy to obtain a better quality of affordable rented housing. Here was a decent, hardworking woman unable to do better, but having to make do, until she was able to move to an NHA home at Coconut Drive in Morvant as described later in the book. At page 35, we are told that Dr Rowley lived there in 1970, so those homes were conceived and built before the 1974 oil boom. 

The question arising for me is what are the odds, with all our far greater wealth and supposed enlightenment, for the poor applicant within today’s HDC system. You see?

I am not saying this to personalise a serious public policy issue but rather to fortify the point that all families deserve the opportunity for betterment. Where do we expect our future leaders and doers and thinkers to emerge from?

Our neediest citizens deserve the support of the State, especially in providing a decent quality of affordable shelter. That is an investment in the sustainable future of our society. We must be vigilant to ensure that our common-wealth is not diverted away from its intended beneficiaries. In the case of public housing it is clear to me that the majority of the Public Money invested in the current housing program has in fact been diverted away from the neediest applicants. To be perfectly clear, I am estimating that over 75% of the Public Money spent since the 2002 Housing Policy was published was diverted away from the neediest applicants.

randal-mitchel-at-malick
Former Minister of Housing Randal Mitchell, MP (in suit) at Key ceremony at Hilltop Villas, Malick. Photo: HDC

Exactly one year ago, May 23rd 2017, the then Minister of Housing and Urban Development, Randall Mitchell made an important series of statements at an HDC event to distribute keys for rented housing in Malick –

“…Mitchell said the majority of applicants at the HDC were people earning below $6,000, “those who cannot, even through the affordable rent to own homes programme, cannot qualify to purchase units. So we are now looking to shift policy and concentrate on scarce resources (referring to money) to the construction of rental units.”

He also said Government now has to decide what is the best way to offer subsidised housing.

“The HDC was instructed to look at the policy, where now we can move towards a better, more efficient and a more effective use of the subsidy that Government provides,” he added…”

I could scarcely believe that a Housing Minister seemed to have, finally, gotten the decisive point. In my subsequent dialogue with Mitchell it was clear that he had been properly briefed and was intent on pursuing that direction. Minister Mitchell was recently re-assigned to the Tourism portfolio and of course, I wish him well in dealing with those new challenges.

So what is Housing Subsidy?

That is the amount of money the State spends to provide cheaper housing to applicants in its various programs, be it HDC, Land Settlement Agency or Home Repair Grants, cheaper mortgage rates and so on.

If we take an example of Fidelis Heights at Gordon Street in St Augustine, those were new HDC homes which could sell on the open market for say $1.7M, but were sold to the lucky applicants at prices under $875,000. At the time, the then HDC General Manager, Noel Garcia, made these surprising claims on the issue in relation to Fidelis Heights –

“……the Government had taken a decision not to subsidise this particular development. It is being sold at market rates in HDC’s thrust to expand and attract an open market clientele…”

Of course, there was a massive subsidy allocated to each of those purchasers, but hidden subsidy is one of the features of these situations in which the really egregious examples of benefiting from the public purse are never identified as such, at least not officially. In these class-biased policy environments, the dominant expression is about having to cut the provisions to those who take advantage of the system and so on.

The point in relation to housing subsidy is that the largest subsidies are going to persons who are fortunate to be selected for the most expensive HDC homes. A mere fraction of those sums are allocated to the few modest homes which are built by HDC for rent. The allocation of subsidy needs to be mapped so that we can decide a new and equitable basis for distribution of our country’s limited resources to areas in which it can deliver the greatest benefits.

Of course, this shifts the focus to exactly what is HDC building and for whom. At this time the HDC’s limit on monthly household income for its applicants is $25,000. Affordable housing must, by definition, be affordable to persons earning less than the average wage. The official figures from the Central Statistical Office (CSO) for 2014 state that 60% of the country’s households have a monthly income below $9,000. It therefore stands to reason that the average monthly household income is less than $9,000. So affordable housing could only be intended for persons at that income level.

Given that the HDC’s legal mandate is to provide affordable shelter for low- and middle-income persons, it is clear that HDC must revise its monthly household income limit for applicants, which cannot reasonably exceed $10,000.

The HDC was established in 2005 to replace the older National Housing Authority (NHA) and operates under the provisions of Act No. 24 of 2005. The Corporation is mandated by the Act to:

  • Provide affordable shelter and associated community facilities for low and middle income persons.
  • Carry out the broad policy of the Government in relation to housing.

—Cited from the HDC website About Us page.

That shift would be fundamental and there will be serious institutional resistance, but the facts are stubborn things and our critical public policies must be fact-based. New designs would be required for new homes affordable to persons at that income level and of course and imperative is to repopulate our capital city and use the East POS land already bought by HDC at great expense over a decade ago. But that is for another series.

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2 thoughts on “Property Matters – St Augustine Nurseries, part three

  1. I really think that it is time for negative income tax or a national dividend from oil revenue or a sovereign wealth fund. By getting persons into housing they get an immediate wealth boost for the next generation. this is how Singapore did it from 1960 to late 1990´s. Also attach financial learning and some form of ongoing service to the apartment block. Equity and Responsibility. The government cannot be the mother and father

    1. Thanks, Stephen, the proposal for a national wealth fund which would accrue to an individual’s account, grow via national service and be a flexible source of credit when the need arose in that individual’s lifetime was one I first encountered from the late Lloyd Best…I was intrigued to see that the newly elected BLP government led by Mia Mottley QC is now proposing similar approaches in Barbados…

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