Matthew McFarlane | Treating housing as a commodity

Over the last few decades, Jamaica’s housing development motivations have gradually shifted from providing homes that meet basic living needs to treating real estate as a financial commodity.

While this trend has been observed globally for some time, it now influences how Jamaicans think about buying property and planning developments. This change in approach impacts the housing market, society, and built environment and, if not properly managed, it could negatively affect our country.

URBANISATION

One main reason for this shift is urbanisation. As cities become more densely populated, land becomes increasingly scarce and expensive for development. Further, infrastructure and planning requirements, including zoning laws, environmental regulations, and transportation considerations, add complexity and cost to the development process.

Historically, residential real estate development in urban areas was often led by government agencies or self-builders. However, rising construction costs and government bureaucracy have shifted this role to larger corporations. With greater financial resources, these corporations are better positioned to handle the high costs of land acquisition, construction, and regulatory compliance. This allows them to dominate the urban development landscape and hoard land stock.

FINANCIAL MOTIVATIONS OF CORPORATIONS

While government and self-builders may be motivated by financial, social, and personal goals, corporations are primarily driven by profit maximisation and shareholder value. This profit-oriented approach to development significantly influences the nature of new projects, often prioritising return on investment (ROI) over community needs or the quality of life for residents. The emphasis on ROI also results in developments that lack diversity in income groups, demographics, and housing types, while prioritising quantity over quality, creating denser but less inclusive urban environments.

Government and self-builders are also often connected to the communities they serve, with vested interests in their well-being because of family, business, or personal associations. In contrast, corporate-driven developments are frequently disconnected from local communities and shaped largely by financial imperatives, often with scant regard for a neighbourhood’s character. For instance, the focus on luxury amenities, upscale retail spaces, or exclusive housing, while more profitable, can lead to gentrification, displacing lower-income residents and transforming neighbourhoods into unaffordable areas.

Simultaneously, the mindset of buyers has shifted from purchasing homes for personal living to acquiring properties as investments, with a particular focus on capital gains or generating income through rentals. This new attitude toward homeownership stems from rising home costs, which are influenced by developers and buyers.

As a result, the housing supply has adjusted to meet this demand, for example, with multi-family developments being advertised as ‘rental-friendly’ or ‘income-generating’. While this typology addresses a crucial need in urban areas, an overemphasis on developments that primarily cater to ‘financial value’ can create imbalances in the built and social environment. The absence of other essential housing values, such as fostering community development and promoting economic stability for lower- and middle-class families, can undermine the long-term sustainability and inclusivity of urban areas.

DISCONNECT

Human-centred design and social sustainability, which may have been higher priorities for individuals building their homes, often take a backseat in the corporate development model. This model relies on a form of ‘spreadsheet-driven development’ that prioritises easily quantifiable selling points, such as square footage and amenities, to commoditise housing. On the other hand, essential human needs such as inclusivity, quality living spaces, walkability, green spaces, and community-oriented infrastructure are harder to commoditise and may not be central to corporate planning processes.

Subsequently, the rise of financially driven developments tracks with the entrenchment of building values and practices that disregard some essential human needs. This shift has significant implications for the way cities and urban areas evolve when not managed. If left unmanaged, housing, when solely treated as a financial commodity, begins to inherit the characteristics of money, itself becoming generic, transactional, and devoid of emotional value. Like currency, it risks losing its warmth and meaning, reduced to something cold, sterile, and interchangeable, rather than a space that fosters connection, identity, and community.

HOW CAN WE IMPROVE THINGS?

While corporate-driven development is inevitable, it is crucial to strike a balance between financial profit and thoughtful design in real estate. To prevent negative outcomes, both developers and buyers must recognise the implications of their actions and advocate for human-centred needs, such as diversity, community development, and wealth creation for middle- and lower-class families. On the other hand, while the government may not be best suited to develop projects efficiently, it can influence the process through inclusive policies, well-designed urban plans, and enforcement.

Creative housing solutions exist that, if explored, could improve diversity and affordability. Two particularly beneficial options are mixed-income housing and well-planned low-income housing. Additionally, diverse housing typologies can create opportunities for a wide range of income levels and family needs, ensuring inclusivity in urban areas. These approaches are key strategies for reducing economic segregation, fostering diverse communities, and enhancing financial accessibility for lower-income families while creating opportunities for long-term wealth accumulation.

Community-oriented development is essential for creating inclusive, liveable spaces. It prioritises shared spaces, walkable neighbourhoods, and accessibility while addressing security challenges. Thoughtful urban planning can enhance well-being by incorporating green infrastructure, such as parks and safer public transit options. These elements improve quality of life and help manage congestion and excessive urbanisation, as seen in Jamaica’s urban areas.

Finally, effective policies and regulations such as community engagement, zoning laws and developer incentives play a pivotal role in achieving these goals. Housing trust funds, rent control measures, and protections against gentrification are proven tools for maintaining affordability and preventing displacement, which Kingston faces because of its high cost of living. Additionally, financial aids such as downpayment assistance, along with low-interest loans, could further empower lower-income families to build wealth over time. By combining these strategies, Jamaica’s urban housing can evolve into a sustainable, equitable system that supports diversity, community well-being, and economic stability for all residents.

Matthew McFarlane is a practising registered architect at the Jamaica Defence Force. Send feedback to columns@gleanerjm.com