Christopher Burgess | Housing production and low-wage economy

The tenth Jamaica Developers Association (JDA) webinar, ‘Housing with a Purpose,’ drew a record-breaking audience. This June, nearly 1,000 participants joined, up from the 200 who usually attend.

With Jamaica facing a shortfall of 190,000 housing units, what resonated most was Minister Pearnel Charles Jr.’s reminder that people must remain at the heart of it all. But closing the housing gap depends on a productive and skilled Jamaican workforce, paid fairly to stay in Jamaica.

The role of prefab homes and Catherine Estate’s success in breaking affordability barriers were also key topics covered. We must build at scale for all income levels. Current production of fewer than 3,000 houses per year will not close the gap; we need to return to at least 8,000–10,000 houses annually, built with Jamaican hands.

To solve the housing crisis and lift production, we must train and retain our workforce, pay fair wages, and end the unethical practice of ignoring wage agreements.

FOREIGN TALENT AND LOCAL APPRENTICESHIP

Charles opened the webinar with a message: ‘You cannot build a better Jamaica with bricks and concrete alone.’ He zeroed in on one of the biggest threats to housing delivery – the chronic shortage of skilled, committed construction workers. It’s not that Jamaicans don’t want to work – it’s that we’ve underinvested in training and failed to make the trades a respectable, reliable career path.

He proposed a national push on upskilling through HEART/NSTA Trust, better use of labour market data, and a revamped work permit system tied to local apprenticeships.

The minister discussed Operation Streamline to facilitate bringing in overseas talent:

‘We have Operation Streamline, which is focusing on enhancing that system to make it much more efficient so you can bring in the skill that you need,’ said Minister Pearnel Charles Jr.

His solution is two-fold. Train more Jamaicans, and when necessary, import skills to fill the gap. But I am not convinced that the solution to migration of Jamaican talent, is the importation of foreigners.

PREFAB VS CATHERINE ESTATE

The webinar turned to two alternative approaches for affordable housing.

First up was Hardware and Lumber’s (H&L) prefabricated modular homes, whose CEO delivered a compelling pitch: quick-build concrete homes made from high-quality compressed panels, backed by UTech training and Bureau of Standards certification. These are durable, efficient starters, and can be erected in eight weeks. They come fully finished, with kitchens, and bathrooms.

With the cost of land, foundation, labour, and site preparation, it costs around J$13 million for the smallest units, and J$18 million for the two and three-bedroom units. This solution is suitable for construction on family land and the middle-income market.

Then came HAJ’s Catherine Estates. Solid well-finished concrete construction, with modern tiling and finishing, with studios starting at $8.5 million and one-bedrooms under J$9 million. Through a China Harbour joint venture, and the NHT, homeowners get 100 per cent financing, and expansion plans. The demand speaks for itself: over 10,000 applications for just 1,650 units. This is what affordability looks like on the ground.

Catherine Estates shows what happens when controlled JVs meet policy – when supply funding is balanced with demand-side credit. With an effective demand of 40,000 units in St Catherine, there is no doubt the market could absorb 10,000 more units.

Even with the innovative and economical building models, housing output still depends on skilled, fairly paid workers. So why is there a labour crisis cited by the Minister? The answer lies in how we pay and treat tradesmen, and the better opportunities they find elsewhere.

LOW WAGES AND MIGRATION

Industry stakeholders agree that the construction labour market has become dynamic, since the mass importation of labour and lack of conformity to the Joint Industrial Council (JIC) rates. Large projects paying up to 60 per cent below standard wages have discouraged tradesmen, many of whom shifted to other jobs or migrated.

Migration of tradesmen to the US, and the Caribbean is draining the construction workforce. Some return seasonally, but many will never return. Even the JIC’s biannual industrial wage increases of 11 per cent and 21 per cent over the last four years, are not keeping pace with the 30 per cent rise in cost of living. Perhaps low wages might explain Minister Charles Jr’s observation of ‘chronic shortage’ of labour.

Local competition is also pulling tradesmen from St Catherine and Kingston to the north coast and Negril, where hotels and young landowners are offering dormitories and better wages, proving that better wages work to anchor talent.

Then there is HEART’s promised training boost from national projects, that has not materialized for contractors waiting on skilled labour. Skill transfer must be more than a promise.

As promising as prefab solutions and joint ventures are, they must be matched with policies that stabilise labour supply. Sir Arthur Lewis showed that when labour is scarce, wages must rise, or workers will migrate.

Jamaica must move beyond a subsistence economy of declining housing production and low wages, and transition to a modern one with higher housing output and fair pay. Yes, the Minister’s ‘Operation Streamline’ raises concerns about further sidelining local tradespeople. Let’s be honest; too often, there is little meaningful skill transfer from foreigners to locals, and labour agreements are sidelined, in favour of low wages.

A modern economy for Jamaicans, cannot be built by sidelining Jamaicans; it must include them.

The webinar’s record turnout should serve as a wake-up call: Jamaicans want housing solutions that are affordable and built on higher production.

Christopher Burgess, PhD, is a registered civil engineer, land developer and managing director of CEAC Outsourcing, owners of SMARTHomes Jamaica. Send feedback to columns@gleanerjm.com