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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 –

  1. 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.
     
  2. 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.
     
  3. 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?
     
  4. 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.
     
  5. 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.
     
  6. 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.

Afra Raymond - Property Matters

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.