Christopher Burgess | Evolution of housing in Jamaica: The 1980s: From shelter to speculation

Global crisis defined the 1980s when inflation and interest rates soared, and the IMF and World Bank imposed adjustments on Jamaica. Housing production stumbled from 42,000 in the 1970s to 32,000. National Housing Trust (NHT) supported both purchasers and developers in the early ‘80s.

But in 1985, it focused on mortgages. This shift led to a near collapse in public production and a sharp rise in housing prices. Schemes like Lady Musgrave Mews and Old Hope Road Mews (St Andrew) complemented the urban areas but blurred the focus on low- and middle-income schemes, like Hellshire and Gregory Park.

Speculative financing tools like Jamaica 21 Bonds prioritised overseas investors. With housing out of reach for 190,000 families, the lessons from that decade are: without government-led production, NHT supply-side support and first-home buyer protection, the crisis will deepen.

NHT’s BLUNDER

Throughout the early 1980s, the NHT played a dual role, funding homebuyers and developers. Its contributions grew from $62 million in 1980 to over $1.3 billion by 1989, allowing construction despite high interest rates.

But in 1985, under IMF pressure, the Trust pivoted to mortgage lending alone, during a supply crisis. Housing starts fell 70 per cent from 3,114 in 1984 to 1,391 in 1986. Starter house prices jumped 80 per cent, from $37,000 to $68,000 by 1987. Developers, facing commercial loan rates of 15–25 per cent, could not finance affordable housing at scale and retreated to high-end homes. This was the precursor to FINSAC, setting the stage for high interest rates and inflation. Today, less than 40 per cent of NHT’s funds are focused on supplying affordable houses. The Trust must restore balance, with supply-side emphasis on affordable starter homes.

GOVERNMENT-LED PRODUCTION

Government-led construction was the backbone of housing, consistently outpacing the private sector. Despite economic constraints, Sugar Industry Housing delivered over 3,000 starter units in 1988. The wider public sector accounted for more than 70 per cent or 22,200 units. Government is more productive in mass housing than the private sector.

The impact of Hurricane Gilbert in September 1988 further highlighted the critical role of the public sector. While private developers nearly collapsed, and produced just 120 units in 1988, a 93-per- cent drop, the government increased completions by 20 per cent. The NHT was also tasked to repair over 6,300 unfinished houses, highlighting its ability to respond to national emergencies.

Ultimately, the 1980s revealed the advantages of production versus credit in addressing housing shortages crisis. Government has access to public funding, that ensures continuity of supply. This remains relevant today.

POLICE VERSUS PROFESSIONALS

Prior to 1987, there were no legal restrictions on the titles “architect” or “engineer”, posing a public safety risk, in a country exposed to hurricanes and earthquakes. The Architects Registration Act (1987) and the Professional Engineers Registration Act (PERA, 1987) sought to close this gap, ushering in professional accountability and public protection.

Today, despite over 700 architects and engineers being registered, issues arise from weak enforcement, state-led circumvention and informal practice threatens public safety. The uninspiring Police Commissioner’s Office clearly wasn’t designed by a registered Jamaican architect. Green Pond Police Station, that is prone to flooding, clearly lacked engineering design and professional oversight, despite it being “passed”. Poor road conditions also reflect badly on the profession. Professional oversight is vital for public safety and to ensure value for money in housing. The state shouldn’t circumvent the law but should support and enforce them.

FIRST HOME POLICY

The issuing of the Jamaica 21 Mortgage and Home Bonds (in 1983) by Jamaica Mortgage Bank (JMB) marked the beginning of speculative home purchasing. These bonds were intended to refund NHT contributors, and tied to overseas investors entitlement and access to low-income houses:

“Thus non-resident Jamaican will be encouraged through Jamaica 21 Bonds to save … to render them eligible as non-residents … The homes in questions are to be purchased through the UDC” Ministry Paper 35 by PM The Honourable Edward Seaga (1983).

The bonds were a part of a wider strategy in the government’s “Green Paper” that included the JMB discontinuing construction financing. This was a death blow to developers’ access to affordable financing in 1983.

While the bonds attracted capital, it placed low-income home purchasers at a disadvantage. Starter home prices almost doubled between 1984 and 1987, increasing from $37,000 to $68,000. Developers put a pause on planning and building.

Social housing should be the priority. Unfortunately, the bonds shifted policy to overseas investors. We are seeing a similar cycle today with unoccupied homes owned by investors that the Jamaican working class cannot afford. Survey shows 70 per cent of townhouses in a complex in St. Ann and an apartment complex in Kingston 6 are investor-owned. A first-home policy is needed that helps buyers with down payments, and reserve units for first-time buyers, otherwise our young professionals will continue to migrate in alarming numbers.

LESSONS FOR TODAY

The 1980s taught Jamaica a hard lesson: when the supply of housing are neglected, then focus on affordable production is withdrawn, and the working class is relegated. A shift in NHT priorities led to a decline in housing production and skyrocketing prices. Our working-class families and young professionals need affordable houses and protection with a first-home policy, and not competition from investors.

Policymakers must return to government-led construction of starter homes, supply-side support and targeted first-home purchase policies. Dwindling production from 48,000 in 1990s to fewer than 20,000 houses per decade now highlights the depth of the supply crisis. When the government builds, the people get homes.

Christopher Burgess, PhD is a registered civil engineer, land developer and the managing director of CEAC Solutions Company Limited. He is currently a Jamaica Institution of Engineers council member. Send feedback to columns@gleanerjm.com