|Housing Policy Review as an element
of the Welfare State
Published Thursday January 20th, 2011
There has been a recent, refreshing
discussion on the shape and necessity of our welfare state. The Welfare
State is used to refer to the various administrative arrangements which
redistribute the nation’s wealth to assist the more needy citizens in
The discussion was initiated in the T&T
Review of 3rd January in Gregory McGuire’s thoughtful and
solidly-based review of the welfare spending trends and their wider
consequences. The responses ranged from a two-part article in the
Express from Professor John Spence, with an attempted rebuttal from Dr.
Errol Mathura in the same newspaper. From the Guardian, there has been
a serious commentary on Sunday 16th by Dr. L Trevor Grant – ‘Curb
escalating poverty in rich T&T’ - and Monday 17th’s
editorial, dealing with the fate of the empty HDC houses.
That Guardian editorial - ‘Housing
Shame’ – was based on the reports of an investigation into the
situation at several of the HDC virtually-completed, but unoccupied
Sunday’s Guardian headlined with
‘Scandalous’ on an abandoned $156M HDC project and that is my point of
discussion on this Welfare State matter. The empty homes built by the
HDC are symbolic of a serious need to re-examine our housing policy.
Above and beyond the case of the
vandalized HDC homes, the fundamental public housing situation is
scandalous. Scandalous is my word to describe a policy of allocating of
scarce resources to build homes, without satisfying the needs of the
poorest applicants. That is a blatant misallocation of public
As I wrote in this space in 2007, our
housing market is divided into 5 layers, moving from the neediest to the
Homeless – People who have nowhere to live or rely on charity for
Permanent Renters – People who can never afford to buy.
Transitional Renters – People who are renting now, but will end
up as home-owners.
Home Owners – People who own their homes.
Multiple Home-owners – People who are wealthy enough to own more
than one home – these people are also the ones who rent property to the
According to the latest figures released
by the Housing Development Corporation in March 2010, there are over
10,000 empty homes in their stock of newly built units. In addition,
there is a waiting-list of hopeful applicants believed to be in excess
of 100,000 people. How can we reconcile those figures?
Dr. L Trevor Grant is the only author, to
my knowledge, to have written on the plight of the homeless in our
society and his column in Sunday’s Guardian gave telling details on the
level of need in those communities.
We have constructed a national housing
policy which pays only lip-service to the housing needs of the poorest
applicants. The clear preference – PNM or PP – is for the applicants
who qualify to buy a home from HDC. That is the only explanation for
the reality of 10,000 empty new homes and 100,000 waiting applicants.
There have been some recent handovers of
new HDC homes to applicants featured in the press and those have all
detailed the incredible length of time these applicants waited for their
new homes. Waiting periods in excess of 20 years have been mentioned.
There is a severe disconnect between
these expensive policies to provide subsidized housing and the reality
of being a poor applicant on HDC’s waiting-list.
At this point, an estimated 76% of our
people live in owner-occupied property. That is comfortably above the
comparative figures for the USA or the UK, where the comparative numbers
are in the 68-69% range. It seems clear that we are approaching the
limits to which we can realistically grow home-ownership in our
country. In some ways we may already have exceeded those limits.
Another point I detailed in my 2010
series ‘Housing Policy Imperatives’, was the nature of the
housing subsidy being offered by the HDC. For example, if the HDC sells
a home with a market value of $500,000 to an applicant for a price of
$325,000, the difference between those two figures is the housing
subsidy. Yes, in this example there is a $175,000 housing subsidy to
each of those people who buy those homes from HDC.
The big question is - if the HDC can
afford to provide these benefits to applicants in the layer of
‘transitional renters’, what are the levels of subsidy and number of new
homes being provided to those in the poorer layers?
If that relationship does not improve to
favour those who cannot ever afford to buy, we will be stuck in an
increasingly frustrating housing fix.
The housing fix is notable for the
inequity with which the country’s scarce resources are allocated and the
hopelessness of the poorer applicants.
There are also secondary problems which
run very deep and those include the issues highlighted in the Guardian’s
story on the abandoned HDC estate.
What is the cost of securing all these
virtually complete, but vacant homes? I am reliably informed that the
annual cost of security is of the order of $50M, yet there are still
significant episodes of vandalism and squatting.
Additionally, we have to factor in the
cost of maintaining and repairing the unoccupied homes. Empty
properties deteriorate at a faster rate and that is a cost to the HDC
which could be avoided by putting people to live in these empty homes.
The estimated annual sum of $50M to
secure these homes is staggering. That sum of money could build over
200 badly-needed low-income homes every year.
There is a newly-appointed HDC Board and
the time is now opportune for a review of this important Welfare State
A critical factor in all this is the role
of rent controls, since the long-established rent control boards were
allowed to wither on the vine by the last administration.
Rent controls and the planning regime
need to form a part of the Housing Policy Review.
There is no right way to do the wrong
Afra Raymond is Managing Director of
Raymond & Pierre Limited and President of the Joint Consultative Council
for the Construction Industry (JCC).