Christopher Burgess | Housing in the 2000s: The building boom

Jamaica’s housing sector delivered over 40,000 homes in the period 2000 to 2010, twice the 1960s output. This was fuelled by lower interest rates and Joint Ventures (JV). I remember a friend in the Ministry of Housing JV programme being overwhelmed by the new investors and formulation of contracts. It was a new and exciting approach to housing. But it slowed when the 2008 international financial crisis hit, raising interest rates.

Housing can be delivered at scale to fill the 190,000-housing deficit. The need for a return to regularisation of informal communities, and realignment of the JV model to low-income housing, are the lessons from the decade. Otherwise, we risk another crime surge, and more brain-drain of our young professionals.

As both lender and developer, the National Housing Trust (NHT) shaped much of the decade’s progress.

NHT OF THE WORKING CLASS

The NHT remained the backbone of affordable housing finance in this decade. The Trust stepped up with two per cent rates when private lenders retreated. NHT kept the hopes of an affordable mortgage alive for most working-class families.

But the Trust also kept developers going, extending interim financing for landmark housing schemes that kept middle-income Jamaicans’ hopes alive when private capital was too expensive.

When the crisis struck in 2008, private lenders tightened lending. But the NHT stood firm, just as it had in the turbulent 1970s and 1980s. The Trust’s funds must support affordable housing and JVs, given new opportunities in once far-off lands.

But money isn’t everything in solving the housing crisis. Commute times and location are still key considerations.

HIGHWAY 2000

My parents lived in Bridgeport, Portmore in the ‘70s. I remember the morning drives over the Causeway bridge and long commutes home from school in Half- Way Tree, and my mother’s workplace downtown. This all meant travelling across the city in the early mornings and late evenings. The urban planning missteps of the 1960s sent thousands to dormitory communities in Portmore, with no nearby jobs, and hours of daily commutes.

Highway 2000, launched in 1998 under Prime Minister P.J. Patterson, was an attempt to correct that. Backed by the Development Bank of Jamaica (DBJ), it promised to bring jobs and homes closer together, and to move people faster.

At US$1.3 billion, it became the largest infrastructure project, cutting commutes and opening lands in Portmore, Clarendon, and Old Harbour. These areas are now just minutes away from Kingston. Even Ocho Rios is now just 45 minutes away.

Housing policy cannot be divorced from urban and transport planning. Shorter commutes mean healthier families, and better balance sheets.

JOINT VENTURE SLIDE

In the 2000s, joint venture (JV) housing projects took off. The government provided land, developers brought the capital and speed and, by mid-decade, private completions approached 1,000 units a year. It stimulated supply without the full cost of public construction.

But, somewhere along the line, prices crept up from a lack of focus on the affordability goal. What started as a tool to house teachers, nurses, and police officers, like Greater Portmore, slowly became a middle-income venture. The focus on starters was blurred and exchanged for classy 2-bedroom solutions. Affordability slipped out of reach for many.

The model can work, but only if it is guided back to its low-income roots. JVs became gated solutions in a national crisis and locked out our young professionals, who would migrate in alarming numbers.

OPERATION PRIDE’s PAUSE

In the early 2000s, Operation PRIDE made progress. Serviced lots and starter homes in communities like Bushy Park brought dignity. But, by 2005, PRIDE stalled and, by 2008, the programme was almost dead.

I worked on three CDB projects in St Lucia implemented by their own Operation PROUD, with the same objectives of upgrading, and regularisation of informal settlements, inspired by our own Operation PRIDE. Barbados, Trinidad and Guyana, too, have similar upgrading programmes, based on the UN-Habitat model. So, why did Jamaica stop after regularising over 58,000 families?

The government switched its focus to the Inner-City Housing Project in 2004, aiming to replace unsafe structures with 5,000 strata units. But that ended in 2008, by Prime Minister Bruce Golding.

Today, developers are calling for the transformation of the inner city with housing. Over 600,000 Jamaicans still live without tenure, driving crime rates up to 10 times higher in informal communities, in comparison to formal communities.

We need to return to a modern upgrading programme that will bring dignity and safety to over 600,000 Jamaicans.

CEMENT CRISIS

In 2006, the recall of huge batches of defective cement halted some housing starts and workers were laid off. Some buildings had to be demolished. The housing sector is vulnerable to overseas supply shocks, and quality issues persist today.

The Bureau of Standards must wake up and protect purchasers from substandard imported electrical wires and weak water pipes. We all know that there are issues with some imported wires that can lead to fires. Yet, none are held accountable. We must also protect local construction material manufacturers and offer incentives to upgrade their factories.

DBJ AND NHT

Strong institutions like the DBJ and NHT have shown they can deliver housing and infrastructure, even in difficult times. NHT even delivered affordable mortgages and interim JV financing in the crisis, until it drifted toward middle-income buyers. We need to realign NHT funding to JVs targeting low-income solutions.

Jamaica risks similar divides to the 20-foot-high walls of Haiti’ elites, if regularisation of informal communities and upgrading is not returned to Jamaica’s housing agenda.

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