| End of Year Review
Published Thursday 15 December 2008
This is our last column for 2008, so we
will attempt to share some highlights of the year past and the
forthcoming one with our readers. At least for those who are still
paying attention during this festive season.
Some of the key issues are –
- The Uff Commission – The
Commission held its first 2 sittings earlier this month and already
the signs are propitious. The robust response to UDECOTT’s requests
for more time and the establishment of a website on which all
information is to be posted seem to augur well for the process. The
major question to be answered in my view is the origin of the welter
of State projects, the quality of the co-ordinating systems which
exist and their rationale. It is easy to be cynical about the aims
of the State, whatever country one lives in, but there are real
grounds for concern that we do not seem to have learnt from the
bitter experiences of our past. The last ‘oil-boom’ and its excesses
are within living memory of us all – do we have the capacity to
learn? To be sure, there are significant areas within which the
State is ‘advantaged’ in the construction process and the Uff
Commission could well offer some insight into these with solutions.
But the pressing question is the Investment Decision and the motives
of those who are in charge of that.
- The HDC programme – The HDC’s
ambitious 2002 programme to construct 100,000 new homes in a decade
is now in question at three levels – The ‘moving of the goalposts’
early on in the game when the State, confronted by the real scale of
their ambitions to build 10,000 new homes a year, declared that what
they had really meant was an annual output of 2,000 units from the
private sector as part of the target. It is doubtful whether the
entire private sector output of new homes has ever been that high
and the continuing silence on that part of the housing puzzle only
serves to cloud the picture further. The second area of concern is
the issue of numbers. Ambitious targets aside, what has actually
been achieved in terms of building new affordable homes? One keeps
hearing a total of about 24,000 new homes completed. If that is so,
it is a major shortfall from the target – representing about 4,000 a
year built by the State. Only half of the ‘adjusted’ target has been
achieved – this being the end of the sixth year of production. What
are the reasons for this? Have the problems been identified and
resolved? Perhaps the recent halt on the start of new projects, due
to the economic slowdown, would allow HDC staff to focus on these
issues. Finally, we have the Allocations Policy. ‘Property Matters’
has been critical of the 2002 policy since it gave precedence to
those who could afford to buy their homes from the HDC, with a lower
priority to those who could not afford to buy. That seems to us to
be a gross mis-allocation of public resources. We were encouraged by
the first statement of the new Minister of Planning, Housing and the
Environment in which she called for a complete review of the
Allocations Policy. We understand that the new policy was approved
by Cabinet last week, but we have been unable to get sight of it.
One hopes that the needy, permanent renters and homeless will be
given a better place in the new Allocations Policy. It would be
helpful if the Housing Development Corporation were to inform
taxpayers by clarifying these aspects of their activities.
- The major office developments in
POS – These are approaching completion and it is really staggering
to try imagining a rational process for deciding on all these new
office buildings. Not one of them is feasible financially, the
city’s infrastructure remains aged and overwhelmed by the sheer
scale of the construction. More to the point we can all think of
State offices in scandalously poor condition due to lack of
maintenance – from the broken-down air-conditioning at Town &
Country Planning’s Tunapuna office to the similar problem at the
Licencing Authority’s St. James branch, both places closing at
1.00pm due to the heat. Given that we are unable to do the basics
with what we have, are we equipped to maintain these huge and
complex new buildings?
- The Caroni Lands – We have seen
the recent advertisements by the Estate Management and Business
Development Company on the release of Caroni lands, now under their
control. We are yet to be told - what is the overall plan for Caroni
lands. It would be a fruitful exercise to seek public views on the
State proposals before these get finalized.
- The Interest-rate environment – We
are now entering a period of steadily rising interest rates and that
will continue to have a dampening impact on the property market.
Most purchases and construction are bank financed, so interest rates
are pivotal in the decision to make a property investment.
- UDECOTT – UDECOTT is said to be
charged with a development programme of the order of $10 billion and
they published unaudited accounts – Half Year Financial Statements -
for the 6-month period ending 30th June 2008. The UDECOTT website
offers one a view of the Annual Reports for 2005 and 2006, but there
is no 2007 Annual Report as yet. That kind of delay in publishing
audited accounts and the Annual Report is perturbing and usually
precedes some disturbing revelation. My last attempt to question one
of the top people there on this issue was met with a reply so
garbled and unreal that it does not bear repeating. One can only
wonder how the Directors of this company, which includes
Accountability and Professionalism in its statement of Corporate
Values, are reconciling this unprecedented and unexplained delay
with the best practice they all well know.
- Finally, we need to make it clear
that the widespread property price adjustment now taking place is no
bad thing. We do not hold the view that steeply rising property
prices are good. This shift could well be an opportunity to
reconsider and avoid the errors of the overseas markets we are
trying so hard to emulate.
Afra Raymond is a chartered surveyor and a director of Raymond & Pierre
Ltd. Feedback can be sent to afra@raymondandpierre.com. |
| Finally, we need to make it clear that the
widespread property price adjustment now taking place is no bad
thing. We do not hold the view that steeply rising property
prices are good. This shift could well be an opportunity to
reconsider and avoid the errors of the overseas markets we are
trying so hard to emulate. |
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