Getting NHT to work for contributors
Ruel Reid, Guest Columnist
I am in full support of The Gleaner's editorial of Sunday, December 7, 2014 that a real debate on the National Housing Trust (NHT) must take place for both the 'inarticulate majority' and the 'articulate minority'.
It is just a shame that an institution such as the NHT has been allowed to accumulate billions of dollars in reserves and yet not found a way to effectively provide housing solutions to 75 per cent of its contributors.
The period of high interest rates in the 1990s to 2000s saw an unprecedented build-up of reserves and an equally deleterious fall in the standard of living of workers and their inability to afford the housing solutions being brought to market. It is poor economic management that has made owning a home out of their reach in this current economic environment.
The NHT Act needs to be revised so that its primary function is to facilitate, through research and design, appropriate housing solutions for all contributors. I have asked the Jamaica Labour Party Economic Advisory Council to review my proposals to this end.
The fact that the NHT has been able to provide more than $40 billion towards the International Monetary Fund reform programme requires us to look at how a JLP government could utilise the collective resources of the NHT to build affordable housing solutions to all contributors to the Trust. The poor record of economic growth of successive People's National Party administrations has shown a consistent fall in productivity and real wages (1972-1980 and 1989-2007), but with JLP administrations, there have been better growth levels, increased productivity and real wages (1962-1972, 1980-1989, and 2007-2011.
The JLP must be called upon to reverse this trend and provide subsidised housing for the lower-income contributors with earnings of less than $12,000 weekly by rental, or lease-and-own models. Based on the persistent salary freeze of public-sector workers, special considerations must be given to them.
FINDING A PROPER SOLUTION
We must start with the promise that all contributors of the NHT of at least 10 years must be guaranteed an appropriate housing solution, including, but not limited to, a lease-and-sale programme up to 50 years that is proposed to allow successive generations of family members to continue the lease-and-own option, providing that they are employed.
A proposed formula of a maximum of 30 per cent of gross salary is to be used for rental, lease or mortgage payments. There should be NO down payment required for contributors with income below $12,000 weekly.
The Gleaner is right that owning a home need not be the first option; the NHT has enough resources to build out the housing needs for contributors and then provide the flexible rental, lease-and-own model payment plan that will allow the NHT to recoup its investment and at the same time provide the housing solutions.
All current destitute retired contributors who had contributed for more than 30 years and are without housing should be given grants to ensure that they are properly housed in retirement.
Major housing reform will, of course, provide much-needed economic stimulus and position us to grow again by more than five per cent per annum as happened in China and Ireland, to name a few.
Effective demand can be achieved if we create an affordability model. This requires creativity that is often lacking in public administration in Jamaica. We are now talking about micro-insurance products, etc, so we need to be equally creative in finding solutions to our housing problems.
We must also launch this initiative to redevelop our inner cities, especially downtown Kingston. This will help to reduce crime and make the country even more attractive to investments in the logistics hub, BPO and other related investments.
It cannot be that our politics is all about keeping the majority poor so that we can buy their votes to stay in power for the benefit of the rich few and then the country, as a whole, is underdeveloped and in social decay.
Politics must be primarily used to empower all our people to improve their lives. It cannot be that when a political party is in power, we underserve constituencies or communities. When we think there is a safe seat like Central Westmoreland we neglect the people until it's election time again.
Let the housing debate rage and let the housing revolution start sooner rather than later!
Ruel Reid is principal of Jamaica College and an opposition senator. Email feedback to firstname.lastname@example.org.