‘It doesn’t make sense’
Golding concerned about continued NHT drawdown, but Clarke defends move
FINANCE Minister Dr Nigel Clarke says the annual $11.4 billion being extracted from the National Housing Trust (NHT) to prop up the national budget over the next five fiscal years won’t affect the agency’s ability to supply the market, as the specific issue is the supply of lower-priced houses to meet current demand.
He was responding to concerns from Opposition Leader Mark Golding yesterday that the drawdown from the NHT that started eight years ago and which the Government is proposing to continue, would weaken the trust’s ability to supply housing solutions.
“That would mean 13 years of extraction of resources from the NHT of $11.4 billion a year. I don’t see how it can be possibly said that taking that level of resources out of the trust doesn’t weaken the trust’s ability to address the supply side issue.
It doesn’t make sense to me to say that, taking $57 billion out of the NHT, over the next five fiscal years, is not going to impact the trust’s ability to partner with the private sector to deliver affordable housing,” Golding said.
Dr Clarke said the experience that tens of thousands of working Jamaicans have is that, although they qualify for an NHT mortgage, they are unable to find houses which they can finance.
“The $11 billion in and of itself doesn’t solve that person’s problem. The fundamental problem that we have, which is a complex one and one that has not been easy to solve at scale, is the fact that the market doesn’t supply sufficient quantities of homes that cost $7 million, $8 million and $6 million,” he explained.
The finance minister said solving this issue calls for a project-like approach, which could take years just to plan.
“That problem is solved by attacking the market failure and the supply side, which will require resources, however, there is a lot to do before you come to resources,” he said.
The minister pointed out that there are very few developers who specialise in this area of the housing market, and that the Government has, in fact, advertised twice for these types of solutions, but there were no substantial proposals.
“There is a complex nut to crack with respect to putting in place the arrangements that will see overwhelming supply of affordable homes, and that is what we are focused on,” he told the House.
Amendments to the NHT Act is one of three companion Bills that the finance minister tabled in the House of Representatives yesterday, which he said would clear a fiscal path to underpin economic recovery without jeopardising debt recovery.