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Housing policy imperatives – Part 3

Published Thursday July 8th,  2010 

Last week’s column delved into the vital issue of housing subsidy and its mis-allocation.  This week, I will set out some suggestions as to how this wrong-headed allocation of public subsidy might be re-oriented to better serve our needy citizens.

The existing system is fundamentally flawed and in urgent need of reform, if we are to better apply the limited quantities of housing subsidy to the nation’s real housing needs.

In order to create a more effective and transparent equation for the allocation of housing subsidy we need to establish three things.  Those are the quantity of housing subsidy which is available for the State to dispense; the housing need of those on the HDC’s waiting list and the housing quality of the new units produced by the HDC, since those ought to be raising the general standard of housing accommodation.

The key point here is that there is only limited housing subsidy available and a clear choice has to be made as to its allocation.  That choice has been made under the existing policy, which in my view is inequitable and counter-productive.  If we accept that the proper measure of a successful housing policy is needy families moving into new HDC homes which improve their living conditions, we also need to accept that a policy which can generate over 10,000 empty homes is a failure.

A supplementary point is that if we are spending vast sums to build new homes, we also need to obtain a measurable improvement in the nation’s housing standards.

The main points could be outlined in this way –

  • Housing Subsidy – First of all, we need to establish the quantity of housing subsidy the State is prepared to dispense.  That can be determined by the sale of the new homes, as recently proposed by Minister Moonilal.  The figure here being the difference between the market value of the new homes and the HDC’s sale price.  I am of the view that we are at, or very close to, the ceiling as to the national percentage of home-ownership.  Another approach would be to establish the difference between the market rental value of the HDC units and the rents affordable to the applicants on the waiting list.  That figure can be capitalized to allow comparison between the policy choices.  The proposed effort to sell the new homes will in fact be inimical, since it will have the effect of decreasing the amount of housing subsidy available to those who cannot afford to buy.  In other words, the neediest people on the waiting list are being discriminated against by the policy of the HDC.
     

  • Housing Need Index (HNI) – We need to develop a framework for measuring the housing need of applicants for HDC housing. That analysis would need to include such items as size of the family, family income and their living conditions, as well as any special needs such as disabilities and the location of the extended family. The UK’s Department of the Environment and its implementing agency, The Housing Corporation, have already done substantial work in developing the HNI as a means of properly allocating State funding for housing across the nation. The USA’s Department of Housing and Urban Development (HUD) has also done considerable work on this complex series of questions.
     

  • Housing Quality Index – In 1993 I proposed a Housing Quality Index for the UK which would have been a tool for measuring how effectively the State funding had been applied in creating good quality housing.  The main elements of my proposal were to measure the quality of design of and amenity provided by new homes.  The Housing Corporation’s approach to this can be viewed at this link, see also this view from the UK’s Homes and Communities Agency (HCA) - link.  Training is available at the Housing Quality Network - link.

We need to allocate the limited housing subsidy to those in the greatest need.  That is the only reasonable policy for this critical area of national development.  That can only proceed properly on the basis of understanding the parts of the puzzle.  Anything other than a comprehensive review of these wrong-headed policies is a recipe for more waste and empty homes.

Which brings me to an issue raised in last week’s column; the incidence of ‘policy silos’.  That phrase – ‘policy silos’ – refers to a condition in which the activities of various State agencies impinge on the same issues and yet, incredibly, there seems to be scant, if any, co-ordination between those agencies.  The aspects addressed last week can be summarized as –

·         The Minister of Housing and the Environment, Dr. Roodal Moonilal, making extensive statements on the sale of new homes, but being silent on the burning issue of new homes for rent.  Silence as to the greater area of need, alongside ambitious proposals to advance futile policies in favour of the less-needy.

·         The Minister of Science, Technology and Tertiary Education (MSTTE), Fazal Karim, proposes blanket rental subsidies for students in tertiary education.

·         The Legal Affairs Minister, Prakash Ramadhar, who is responsible for the rent control system, declares that he prefers that rents be determined by market forces.

Those are exactly the ‘policy silos’ we need to dismantle if we are to make any real progress on these vital issues.

Minister Moonilal should take the lead on this issue by convening a symposium or conference to debate these issues and establish some kind of policy consensus.  We cannot continue this way.

We need to go beyond the numbers game of billions spent, jobs created and new homes built.  We need to move to a new, clear space where our national housing policy is declared as existing to improve the living conditions of our neediest citizens.  We need to move beyond the narrow perspectives which glorify home-ownership as the only correct answer.  There are many productive and honest families, in advanced countries, who never own a home.  They are no less worthwhile than those of us who are home-owners. 

Most of all, Minister Moonilal should take urgent steps to distribute the ‘…approximately 10,000…’ homes to the most needy.

 

Afra Raymond is Managing Director of Raymond & Pierre Limited and President of the Institute of Surveyors of Trinidad & Tobago.  Comments can be sent to afra@raymondandpierre.com.

Afra Raymond - Property Matters

Re-purchase programmes –

There ought to be a programme for those people who have HDC homes and no longer need them. That program would offer a cash payment to those HDC tenants who vacated their units. That would have the practical effect of releasing additional housing units to the HDC without the expense and delay of having to construct new ones.