Sat | Dec 10, 2016

Media, mob and Outameni madness

Published:Sunday | November 16, 2014 | 12:00 AM

In the heat and noise and dust of the media campaign against the Outameni purchase by the National Housing Trust (NHT), we are in danger of losing sight of the bigger story.

This newspaper, for instance, judged the Outameni purchase big enough to hold its front page nearly all of last week, with Tuesday's lead declaring the 'NHT defiant'. Not firm or consistent, or even determined, but defiant. Defiant against what or whom?

The Outameni purchase may very well have been a bad business decision, like that of some banks years ago to own and operate orange farms and dairy farms and whatnot else, and the editorial decision of some media houses to carry defamatory material and having to pay for it. But the governing multipartite board of the NHT is insisting, without any serious contradiction, that its action is within the governing law of the Trust.

Smitten by political opportunism, the Opposition is mulling suing the Government over the NHT purchase, with its lawyers poring over the responses of the prime minister, who is the responsible minister for the NHT, to questions tabled by the leader of the Opposition and others asked on the floor in Parliament last Tuesday. Courts rule on matters of law, not matters of wisdom - or the lack thereof as is being displayed in the mulling of the Opposition.

We should hear more from the JLP conference today how the party plans to proceed in its agitation against the decision by the NHT board to engage in the transaction. An opposition senator sits on the NHT board in his role as union leader. Hopefully, for sheer credibility's sake, the mulling of court action will have ended in the negative by the time the leader rises to address conference.

UWI economist Dr Peter-John Gordon soberly pointed out in his letter to the editor on Tuesday, 'NHT has to invest funds'. The Trust, he pointed out to anyone not blinded by the dust and deafened by the noise of the Outrageous Media Fuss, has a surplus of cash because cash flows into it at a rate that is greater than its capacity to build houses.

So what should the NHT do with the surplus cash, Gordon enquires? Should the Trust keep it in a safe at its headquarters, or put it in a savings account in a bank at interest rate well below the rate of inflation. Or should the NHT lend to Government by buying treasury bills?

Pension funds, including the NIS, routinely invest people's money in real estate and hotels and other economic activities without a fuss.

Economist Gordon is quite right: The notion that NHT funds should only be used for building houses and any deviation is a betrayal is misplaced - by media whipping up and egging on an angry public; by the Opposition in election mode; and by private-sector groups, "which presumably understand something about the investment of funds", calling for investigations by the contractor general, the auditor general and the Parliament.

KEY FACTS

The Gleaner, editorialising on the 'Wrong debate on NHT purchase' last Wednesday, broke with its own news desk and front page, doing its own editorialising in the headline 'NHT cash splash - Board plans to shell out $20m more ...', and calmly laid out some key facts of the NHT's dilemma driving its investment decision, bad or good.

Echoing Gordon, the paper concluded, "But given the NHT does not spend its cash, whether on housing or to pay for other services, it has to invest that money, the return on which contributed to its accumulated surplus of J$121 billion. The issue is where and how should the NHT invest this money."

The answer from big chunks of the media is that they and an enraged public, or at least the prime minister, should decide, not the board.

Everybody knows better than the lawfully constituted board of the NHT, fully capable of making bad decisions, but acting within its law, as this newspaper concedes and the Opposition sensibly should, how best to invest the funds of the Trust. And rule by mob and media is definitely better.

The truly big story out of Outameni is the inability of the NHT to deliver housing solutions to satisfy the demands of its contributors. For reasons bigger than the NHT.

There is, as The Gleaner announced in its lead on Monday, a chronic and critical 'Housing dilemma'. That crisis dates back to the first day of 'Full Free' in 1838 when the apprenticed ex-slaves were turned loose into full freedom with access to land and housing deliberately restricted by the plantocracy. We have never held down that problem and fixed it.

DRAMATIC TURNAROUND

I am firmly of the view that this country could make a dramatic turnaround if we focused on a small number of large problems, held them down, and fixed them.

Last week, I wrote about food, chicken back to be precise. Cheaper protein particularly targeting the poor is a big and worthy national agro-industrial project tracking back to reversing the injustices of slavery and Emancipation. Housing and land reform, today's subject, is another. The broad area of crime reduction, law and order, security and justice is a third. Add stabilising the national currency and a couple of others; go at them with vigour and consistency; and watch Jamaica flourish and prosper with jobs, jobs created in peace and expanding prosperity.

The Five Year Independence Plan, 1963-1968, which I have repeatedly quoted in this space, estimated that at Independence, there was need for 165,000 new housing units in the decade following, mostly at the low-income level. Not counting the replacement of substandard stock like what the responsible minister of development and welfare bulldozed at Back-o-Wall, "the rectum of the city" in his words later on, for the creation of Tivoli Gardens.

The Plan said there was also "the need for designing houses and reducing production cost to bring housing affordability within the reach of the largest segment of the population, the poor".

The NHT was established in 1976 as a response to the problem.

In recent times, the Trust manages to put out around 5,000 units per year while sitting on assets of J$194.5 billion. But, by the NHT's own admission, some 80 per cent of contributors are not eligible for even the cheapest mortgage. This is economic injustice that will spark Outameni outrage. The Caribbean Policy and Research Institute (CaPRI) says the NHT has only been able to provide housing for about 12 per cent of the population.

The NHT can do little about the final cost of a house, except perhaps to keep shrinking them and their yard space to Lilliputian size. There is a plethora of input costs into the price of a house, making housing a feeding tree for industry players and for the Government itself and for which the beneficiaries of the feeding tree do not wish to see any real and substantial change. Let us stop beating around the bush and reciting platitudes.

MAJOR PROBLEM

Land is a huge cost factor for housing. The Government sits on vast tracts of Crown land. Land titling, so people can formally own parcels they occupy and get building loans with title as collateral, is a major problem. A host of high-priced 'professional' fees jack up housing cost. As do a bundle of government fees.

Conventional housing material and labour costs are not cast in concrete, and cheaper alternatives must be sought with urgency. And, oh, the security component of the cost of housing is neither insignificant nor optional in our crime environment.

The prime minister, who has responsibility for the NHT, needs to go well beyond mouthing scripted Outameni platitudes and beyond Michael Manley's NHT, and with her housing minister lead a housing revolution from research, through policy and state action, to construction - a revolution 176 years overdue.

n Martin Henry is a university administrator and public-affairs analyst. Email feedback to columns@gleanerjm.com and medhen@gmail.com.