The previous article continued my Season of Reflection by exposing yet another counterfactual, the myth that the Trinidad and Tobago Housing Development Corporation (HDC) builds affordable housing as required by our Housing Policy (2002) and the HDC Act (2005).
Any basic examination of the facts reveals that the majority of the HDC’s output of new homes are not affordable. I estimated that un-affordable majority as being virtually 80% of the new homes produced for HDC.
The official silence is eloquent and damning. Except that officials are not always silent, so let me share a short social encounter last week with a high-ranking housing official. That official took the astonishing step of telling me that I did not know what I was writing about and that even the information I was relying on was incorrect. When I pointed out that my work is all based on the HDC’s data, checked and supplied by its authorised officers, the conversation took an even more bizarre turn, well beyond the scope of this article.
This week, I shift focus to outline the features of a properly-operating housing program. It is important to make informed, detailed critique of public policies, but it is sometimes more important to explain exactly what is to be done. This is such a case.
The HDC waiting list
Since the HDC is mandated by S 13 (2) of its originating Act to provide affordable housing, there is no point in keeping a waiting list with applicants earning more than the average. The only real point would be to allow the HDC to make the claim that they are housing applicants from the waiting-list, all the while avoiding that awkward word ‘affordable’. Facts are stubborn things.
The national average monthly household income is $9,000 (the mean) or $10,500 (the median), according to how it is measured. The decisive point arising when one places the official figures on household income alongside the HDC Act, is that no household with a monthly salary exceeding say $11,000 should remain on any HDC waiting-list. That is all.
Given that over 85% of the applicants on the HDC waiting list are unable to qualify for a mortgage since they are too poor, it is imperative that the output of rented homes, affordable to those people be increased.
A housing program which was actually aligned with the needs of the applicants would require that the HDC’s output be adjusted so that well over 75% of the new homes produced would be offered for permanent rental.
Units – What is to be built
The current HDC trend to favour units costing in excess of $750,000 must be stopped so that the maximum construction cost of the few units built for sale would correspond to the applicants’ limited means.
I recently got quotes from TTMF for a $1.0M mortgage on best terms for a first-time buyer. The monthly payments were estimated at just over $5,000 and would have required a monthly income of $18,000, which is twice the national average. Those estimates show clearly that the maximum cost of a new home should be a maximum of $450,000.
In 2018 I was told by a top HDC official that a series of low-cost model homes were being designed in the sub-$300,000 range, so where are those models?
The housing subsidy is the difference between the true cost of producing the new home and the amount paid by the occupant. The true cost is the sum of the land value, professional fees, the cost of construction and the cost of finance.
That housing subsidy is the State’s contribution to the deserving applicant so that a good quality home can be occupied on affordable terms. Housing subsidy is perhaps the single most important element in the entire arrangement, yet it is undisclosed and simply never discussed.
The HDC’s accounts should disclose the housing subsidy for each project, as currently compiled those financial statements are opaque on that essential issue.
One of the underlying issues with the HDC’s housing projects is that a majority of those are in abandoned agricultural lands. Apart from the impact in terms of reducing the nation’s supply of arable land, there is a little-discussed aspect in that the locations of these HDC projects can effectively impose high travel costs on the occupants. If the HDC’s new projects are to properly serve the poorer applicants, there will have to be a shift of focus to urban locations which are more easily accessible.
If the cost of the typical HDC new home is halved as I am proposing, the output could double for the same outlay of Public Money and Housing Subsidy.
Open Agenda & Minutes
One of the unacceptable aspects of our public administration is that so many decisions are held as being commercial and/or confidential, despite the use of Public Land, Public Money and the stated purpose being to advance the Public Interest.
I have had good assistance from the staff at the HDC for the past 15 years of research, so that is not being alleged against those exemplary public officers. I am taking the opportunity to propose a further step to better administration.
The example offered is the UK-based public agency Homes England which publishes all its Board Agendas and Minutes in a timely fashion. It made me think even more on the issue – why should those be secret anyway? You see?
Finally, we come to the heart of the matter – who actually gets these new homes?
I am proposing that the only way to eliminate the situation of people getting HDC homes when they already have a property is to publish their details.
3 thoughts on “Property Matters – Affordability and Legality part two”
Although you never explicitly stated it, Afra, I take the $9,000 or $10,500 to mean monthly income?
Yes, that is correct and yes, it was explicitly stated…I am very particular about these matters…
Thanks for joining-in.
Suppose we cancel cash and create electronic units of wealth created by labour. Each unit must be traceable such that once created it’s history becomes permanent and accessible and that no other medium will be accepted. Suppose each personal possession were to be similarly valuated and recorded, and that non-recorded items be sanctioned. Every loaf of bread, shirt, tampon or house manufactured, sold and purchased or otherwise disposed of, can be traced. I guess we will be approaching absolute transparency. It is clear that people will lie, steal and prevent those we have an aversion to, from gaining wealth and so on. There are innumerable versions of this theme, yet we seem willing to ascribe them all to Nirvana, bliss, heaven etc. while we plunder, abuse and tarnish all that we touch.
What do we truthfully want as individuals? How do those wants fit into familial, communal, local, regional and international wants? How do our education, religion, health and other institutions plan to fulfil these objectives? Will national housing, national insurance, national security etc. ever intersect for the common good or will Solzhenitsyn’s dystopic principles espoused in his “For the Good of the Cause” of 1964 remain? What are the long term consequences of our current actions? Who really cares?