Editorial | Defining the NHT
We are willing to afford Andrew Holness a bit of slack from his recent entanglement in defining the purpose of the National Housing Trust (NHT), which he said is not a housing agency, but a financial institution. For, we sense that the prime minister, in his remarks, has the embryo of an idea that was expressed ahead of its gestation.
Mr Holness has an opportunity to give serious thought to how his administration can deepen the role of the NHT as a force of economic and social good beyond, as he said in Darliston, being "run like how a finance institution should be run", or as his financial minister, Audley Shaw, attempted to explain, "rescoped along maybe more prudential lines".
In this regard, apart from an implied enhanced oversight and greater transparency in the employment of the NHT's resources, Mr Holness' review should include creative ideas to leverage the Trust's assets in confronting one of Jamaica's major ills: its shortage of housing that feeds worsening urban decay.
With respect to a definition of the NHT, as a housing agency or financial institution, it was clearly intended, as Mr Holness ought to be aware, to be both. It operates as a forced saving scheme for employees who are required, by law, to put two per cent of their incomes into the fund, for at least seven years, at nominal interest. Employers are taxed directly at three per cent of the value of their payrolls. The NHT has, since its inception, accumulated assets of more than J$220 billion.
Its mandate is "to add and improve the existing supply of housing" by either promoting housing projects and/or providing its contributors with mortgages "to assist in the purchase, building, maintenance, repair, or improvement of houses". The NHT is given a broad canvas upon which to interpret its mandate.
The Trust has done a relatively decent job, having, over 40 years, provided around 200,000 mortgages. In recent years, it has budgeted around J$20 billion annually for its programmes. Yet, shelter and related issues remain acute problems in Jamaica.
As Peter Phillips, the shadow finance minister, observed in the Budget Debate, an estimated 700,000 Jamaicans live as squatters, on land to which they hold no formal titles. Further, analysts say that the country falls well short of the near 20,000 houses it needs to build annually to address its shelter crisis.
The dynamic employment of NHT resources, in partnership with the private sector, in blighted urban communities, can accelerate solutions to the problems. Most of these communities, many of which are incubators of social dysfunction, already possess basic infrastructure, including, albeit, rundown houses.
It would seem, on the face of it, relatively easy for the NHT to invest in infrastructure upgrade, then allow the private sector to invest in wide-scale community upgrades, for which the Trust, as it does now, would co-finance mortgages. It might, too, working with other state agencies and NGOs, revisit the sites and services arrangements of the 1970s and Operation PRIDE, a community sweat-equity scheme of the early 2000s - but without the corruption - to accelerate some of these projects, while keeping them affordable. Here is where the oversight and transparency would be critical. There will be questions about ownership of abandoned/squatted real estate in inner-city communities, but workable solutions to this can't be beyond the capacity of policymakers.