Mon | May 29, 2017

Editorial: New ideas for old communities

Published:Wednesday | September 23, 2015 | 9:00 AM

Old, encrusted ideas cling hard. So, the expectation of the State, even poor ones like Jamaica, to deliver all manner of benefits is hard to dislodge. In that regard, Delroy Chuck's idea on how Jamaica might tackle its great, and worsening, problem of urban blight is at risk of being beaten down before it gets the serious debate it deserves.

Mr Chuck represents the parliamentary constituency of North East St Andrew, with several affluent neighbourhoods, but also several gritty, inner-city ones. The other day, in the House, he proposed that the Government attempt to solve the problem of the latter by using existing

legislation to purchase manageable tracts of run-down communities from current owners, which would then be redeveloped in partnership with private interests. Current residents, Mr Chuck suggests, might choose to use the money earned from the sale to purchase new ones elsewhere, or may wish to be part of the revitalised area, which assumes that these will include mixed-income homes.

The responses, of course, are predictable: that urban renewal tends to exclude previous poor residents who can no longer afford homes in the newly gentrified communities. In the process, developers who have had the benefit of government subsidies laugh all the way to the bank for not having met their obligations.

That, of course, is a narrative of an old socialism, which is that, in the context of Jamaica's fiscal situation, and taken to its logical conclusion, urban renewal is unlikely to be seriously on the national agenda - at least not any time soon. The Government can't afford it. New housing developments, therefore, will be mostly privately financed greenfield developments, including encroachments on agricultural lands and also into marginally safe regions.

Of course, as we said previously, what Mr Chuck provided was a worthy germ that is in need of development, not abortion. Past failures of urban renewal, in Jamaica and elsewhere, are not because the projects were inherently bad; they might have been poorly executed, with the help of policymakers who didn't ensure that developers played by the rules.

 

Sound housing stock

 

The logic of urban renewal is obvious and can be enhanced with some creative thinking. The fact is that the housing stock in many of Jamaica's run-down, urban communities is essentially sound. Public infrastructure exists, although, like the homes, it needs upgrading. In many cases, residents have equity in these homes. Additionally, laws exist for investors in designated renewal areas to receive tax rebates and clawbacks.

In the circumstance, public-private sector partnerships along the lines suggested by Mr Chuck are like to be feasible, and more cost-effective than greenfield developments. Some of these can be structured so that existing homeowners have equity interest in the redevelopment.

Further, such projects might be a way for the National Housing Trust (NHT), with assets exceeding US$200 billion, to more effectively utilise its resources and provide benefits to its contributors, the vast majority of whom do not now qualify for its mortgages. The NHT could, for instance, help to finance these projects, linking its investment with the equity of homeowners, whose rights it would help to protect.