Andrew Holness | Gov’t licks Opposition for six on housing

Below is a lightly edited excerpt from Prime Minister Andrew Holness' Budget Debate speech last Tuesday.

As we listened to the Opposition Leader present from the stands a week ago, shouting loudly to us who are on the pitch to use the NHT money to fix squatting, I wondered to myself whether he has not been watching the game since he was bowled out, and whether he has totally forgotten that his 22 years on the pitch did not yield much runs. Not with the provision of affordable housing, nor any proactive system of land titling.

In the last PNP administration, the NHT did 6,298 housing starts, which was fewer than the number of housing starts under the previous Jamaica Labour Party administration.

The PNP Government did:

- 1,790 housing starts in 2012.

- 1,689 housing starts in 2013.

- 1,549 housing starts in 2014.

- 1,270 housing starts in 2015.

That is a total of 6,298 housing starts over four years.

In one year alone, in the 2017-18 year, the NHT will complete 5,200 housing starts in 12 months alone - almost as much as were done during four years under the PNP. Housing starts in this financial year exceed by a factor of almost two the number of housing starts done by the NHT in every year over the past 20 years.

Housing is a critical social need and the surveys conducted by the NHT suggest that there is unfulfilled demand for housing that far outweighs what the NHT has historically provided. So when we came into office, the policy of my Government has been to 'build house' - and that is exactly what the NHT has done. They have proceeded with clarity of purpose and focus around this singular objective with no distractions.

So, in only two years, we have completed approximately 8,200 housing starts at the NHT, which is 30 per cent more than the PNP did in four years.

There is more. Having done 8,200 housing starts already, we are already executing plans to do a total of approximately 22,000 housing starts for the four-year period to 2020, which would TRIPLE what the PNP administration did in their tenure.

That is action that will transform lives.

I make it a point of duty to attend all the groundbreaking and handover ceremonies. It is the most rewarding feeling to see the joy when homeowners receive the keys to their own home. One recipient said that I placed prosperity in her hands.

 

FACILITATING HOME OWNERSHIP

 

I want them to know that this Government celebrates with them the accomplishment of owning a home, that we celebrate people who want to build their homes, that we are committed to providing affordable, structured and orderly pathways to owning a home.

These 22,000 housing starts will be spread across Jamaica and we are innovating to achieve these higher levels of housing output. While the private sector participates in the middle, upper-middle and upper ends of the housing market, they have largely been absent from the affordable housing market, which we deem to be a market failure.

We have, therefore, instituted a developers programme at the NHT whereby the private sector is invited, through a competitive process, to bid on producing affordable housing on lands owned by the NHT, according to specifications provided by the NHT. Once the developers are competitively selected and confirmed, they will be responsible for all stages of the process from planning and approvals, through to construction and completion, according to criteria laid out by the NHT.

The developers will bear the financing, construction and completion risks, and to induce their participation in this end of the market, the NHT will assume the market risk, provided that the established criteria are satisfied. That is, the NHT will purchase the units if they are not sold in a timely fashion.

This programme will allow the NHT to bring to market more than 4,000 affordable housing solutions in the first instance than it would otherwise be able to do on its own. The NHT will continue to develop housing solutions on its own, but this partnership allows the NHT to produce more solutions in the same period. In this way, we can provide a steady flow of affordable housing solutions to the market and remove the need for informal settlements.

Seeing the many and varied demands being placed on the NHT over the years to finance considerations outside of its mandate and seeing the wide gap in housing supply that still existed after 40 years of operation and the increasing incidence of informal settlements, particularly around tourist areas, in late 2016, I commissioned a review of the NHT to be led by Ambassador Dr Nigel Clarke.

This commission, which consisted of members associated with the private sector, the unions, the Opposition and the Government, met with stakeholders, including NHT contributors, NHT scheme owners, NHT staff, ministries, departments and agencies of government, private sector, contractors and developers, former chairmen of the NHT, multilaterals, financial institutions, among other stakeholders, and submitted their report to me in November 2017.

I have the pleasure of tabling the report in the House.

A central recommendation of the NHT review is to use funds from the NHT to address the problems of irregular settlements, also known as Squatter communities.

The Government is in agreement with this central recommendation of the NHT Review Commission to use the NHT to address the problem of irregular settlements.

This will require amendments to the NHT Act, which this Government is prepared to do. It will also create a mission overlap with Housing Agency of Jamaica and is in keeping with our Public-Sector Rationalisation Plan. There is also a recommendation to merge the HAJ with the NHT.

There are other recommendations in the NHT Review that will be ventilated in this Parliament and in the public. The Government now has a well-prepared road map on which to take informed decisions on the future of such an important institution.

 

HAJ turnaround

 

The mandate of the HAJ is to develop housing solutions, provide infrastructure to upgrade informal settlements, and assist with securing titles for homeowners. The HAJ is the agency of the Government tasked with regularising squatter settlements.

It is ironic to hear the Leader of the Opposition talk about using NHT contributor resources to upgrade squatter settlements, because the Housing Agency of Jamaica is one of those agencies that drifted from the path of good management under the PNP administration. When we took over the Government, the HAJ was operating at a loss of J$885m. It had housing developments unfinished for five years and the cost for units skyrocketed to well above the units could fetch on the open market.

I am pleased to announce that under this administration, the HAJ, for the last financial year, turned a profit of J$183m and will turn a profit this year of more than J$800m. The agency will continue to pursue its strategic objectives - to stabilise its financial position and strengthen its technical capacity. In this regard the agency will focus on the following:

- Improving its financial position, thereby capitalising on loans, grants and value-added service opportunities, toward increased delivery of housing solutions;

- Use profits earned to regularise informal communities by expanding its capability to provide affordable housing through innovative housing solution design and effective project execution.

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