Editorial | Design competition good starting point

The Government’s design competition for low-cost houses is a good initiative, which, hopefully, will produce creative ideas that help to solve one of Jamaica’s intractable problems – the delivery of affordable shelter to the large swathes of its population who live in substandard homes.

But beyond what may be delivered by architects, engineers, planners or other building professionals, the competition provides an opportunity for a broader discussion, and the unearthing of other practical solutions to the matter that the Government is intending to address. That may include some reimagining of the role of the National Housing Trust (NHT). Or, at least, how the Trust deploys resources.

By the Government’s estimates, around 900,000 Jamaicans, or nearly a third of the population, live in informal communities, sometimes on ‘captured’ land with poor housing and little or no infrastructure. Some of these are tenements in blighted urban communities.

Despite a sharp growth in urban development in recent decades, it has not been sufficient for a breakthrough at the lower end of the socio-economic scale. Two years ago, for instance, the Government estimated an annual shortfall of 15,000 shelter solutions.

That was 22 per cent more housing starts in 2019, when there was a rise of 202 per cent on the previous year.

It is, in part, against this backdrop that the Government has asked building professionals to put their creative minds to the test to produce homes at price points that create effective demand at the lower end of the economic pole. The Government has not said much about the price in relation to this competition, but it is expected it would be in the range of J$5 million to J$6 million.

“What we are trying to do is to get the architectural community, the planning community, and the environmental community to take the vast knowledge that exists, both globally and of local circumstance, and infuse it into practice to solve real-world problems,” Prime Minister Andrew Holness said at the competition’s virtual launch.

This newspaper agrees with that concept, but does not believe it goes far enough, given the scale of Jamaica’s shelter, land-use and planning problems and the crisis of urban blight. There is a sense of this is a one-off, single-shot initiative, when the need is for ongoing engagement.

For instance, while a competition of this type may draw out the creativity of faculty and students of the island’s academic institutions – such as The University of the West Indies and the University of Technology (UTech) – it is probably not the most efficient way to fully exploit their expertise, including research capabilities. We, for instance, would wish for partnerships with government agencies and, say, the Faculty of The Built Environment at UTech, focusing on support in research in design and planning that address not only the immediate costs of construction, but building for sustainability in the context of climate change. Indeed, the competition itself implies an assessment by Jamaica that it cannot hope for solutions to sustainability only from abroad.

Neither do the answers to affordable housing, as the Government knows, rely solely on new materials or building techniques. Some may be dependent on how we allocate financial resources. Which is why we feel that another look at some of the suggestions from a 2017 review commission of the NHT may be useful.

The Trust was established 45 years ago to help address Jamaica’s housing problem. It is funded by a payroll levy – three per cent by employers and two per cent by workers, although the latter’s portion is refundable after seven years, currently at two per cent interest. However, despite its below-market rates for its mortgages, and the possibility of two persons combining to borrow up to J$13 million, 70 per cent of its contributors never access a benefit. Most cannot afford to.

Indeed, the 2017 analysis showed that the lowest wage earners accounted for 46 per cent of the NHT’s contributors and provided 12 per cent of the payroll levy. This group, however, accounted for only 22 per cent of its mortgages in volume and 12 per cent in value. Its highest-paid contributors received 31 per cent of all mortgages and 48 per cent of disbursements by value. Higher income earners not only borrow more from the Trust, but the NHT’s lower rates allow them to blend its funds with money from the private market to purchase more expensive properties.

That is not a bad thing. But also implicit in the NHT’s mandate, exemplified in its several programmes and low mortgage rates (its highest is four per cent), is an obligation to help address the housing needs of the poorer Jamaicans. The fund might accelerate this process by directing more of its resources to addressing some of the issues, such as the cost of infrastructure for large-scale projects, that militate against effective demand among its low-income contributors.

Among the suggestion of the 2017 review was that the Trust:

• Underwrite the cost of development of a national spatial plan to identify tracts of land suitable for housing and community development;

• Underwrite the cost of the infrastructure to facilitate delivery of homes at the targeted price;

• Design and deliver community-based developments that allow projects of the size that produce economies of scale;

• Underwrite some components of the design and engineering cost of the development by private developers; to pursue as appropriate;

• Help reduce the market risk to developers by agreeing to purchase the majority of the solutions in a project.

The NHT could possibly pay for some of these subsidies by directing more of its higher-income borrowers to the private mortgage market, where rates have fallen substantially in recent years, lessening the necessity of the Trust’s cheaper money as in the days of stratospheric rates.