Towering NHT apartment prices must fall
PRIVATE SECTOR developers can afford to sell housing units that cost an arm and a leg. Their business is profit, pure and simple. As long as they can find buyers, they will continue to keep their prices sky high. I wonder, though, who is shelling out 40, 60, 80,100 million dollars and more for apartments in those multistorey buildings that are going up everywhere.
At the risk of appearing to be badmind an grudgeful, I suspect that, for some of these real estate deals, there may be more than meets the eye. Many of these apartment buildings are not fully occupied. It seems as if there is a lot of cash floating around in Jamaica that needs to be spent. And real estate is the ideal investment. No questions asked.
Incidentally, the expression ‘cost an arm and a leg’ came into popular use in the US after World War II. It signified the high price paid by veterans who lost limbs in the service of their country. The principle of compensation for grave injuries was established in law as early as 1879. Civil War veterans who lost both arms or both legs, or who lost their sight completely, were granted $60 per year. Even at today’s equivalent of about $1,656, that rate of compensation was certainly not adequate.
HOUSING TRUST LOTTO
Hard-working Jamaicans should not be forced to sacrifice body parts in order to secure decent housing. That is precisely why the People’s National Party established the National Housing Trust (NHT) in 1976. The NHT website states: “We are entrusted with the mission of increasing and enhancing the stock of available housing in Jamaica as well as providing financial assistance to the most needy of our contributors who wish to build, to buy or to repair their homes.”
In the early years, the Trust attempted to ensure equal access to benefits by setting up what was known as the “computerised random selection process”. Somewhat like the lotto! The first draw was held before a live audience in studio at the Jamaica Broadcasting Corporation on July 1, 1976. The history of the NHT on the website goes up to 2008. It needs to be updated. But, perhaps, the NHT does not want to acknowledge just how far it seems to have deviated from its primary mission over the last decade or so.
The Trust’s website states that, “The NHT also has a mandate to generate funding for the housing construction sector and to promote improved building systems and greater efficiency within the industry.” But generating funding should not be at the price of excluding the vast majority of contributors who can’t afford dig-out-eye prices. Furthermore, improvements and efficiency are not guaranteed by building multistorey apartment blocks. The very opposite is often true.
RUTHVEN TOWERS FOLLY
Take, for instance, the Ruthven Towers folly. The target market is certainly not “the most needy” contributors to the NHT. Why is the Trust following back a private sector developers with their exorbitant prices? Karena Bennett, business reporter for The Gleaner, wrote a penetrating article, ‘NHT defends sky-high Ruthven Towers prices’, published on November 9.
The Trust’s defence is rather shaky: “The NHT said that the redesigned eight-floor Ruthven complex was developed to target the segment of its contributor base with the lowest need for subsidies – in other words, those in the high-income bracket.” But, as Bennett points out, the NHT had a hard time selling expensive units on Paddington Terrace and Salisbury Avenue which cost well over $30 million a decade ago.
Ruthven Towers is being advertised as “the complete living experience”. For who? One of the criteria for application is, ‘Be a non-homeowner.’ How many first-time homeowners can afford an apartment that costs between 27.7 and 37.7 million? With no equity! As Bennett confirms, “Over a 25-year period, that would put the monthly mortgage amount for the lowest-priced apartment at $149,000, assuming a deposit of 10 per cent of the unit cost is paid upfront. It means that someone seeking to qualify for a unit would need to earn between $5 million and $6 million annually.”
MORE ANGELS NEEDED
The National House Trust must return to its primary mission of “providing financial assistance to the most needy”. It should leave high-end apartment buildings to private-sector developers who know their market. Many of their buyers don’t even need mortgages. They are investors who own property all bout. They certainly wouldn’t qualify for an apartment in Ruthven Towers. They are far too wealthy. I speculate that the NHT will have to abandon the ‘non-homeowner’ criterion if they are to stand any chance of selling the costly apartments. In any case, since we are a culture of scammers, I expect that homeowners can get non-homeowners to front for them.
The NHT needs to focus on replicating developments like Angels Estate, one of their most successful ventures. Just imagine the impact on St Thomas of housing like that! With the construction of the South Coast Highway, the parish will become an easily accessible destination. Its proximity to downtown Kingston and the larger Corporate Area is a definite advantage.
But, many potential homeowners don’t want to live in St Thomas. They prefer to chuck up in the Corporate Area. The underdeveloped parish is a hard sell. A resident once told me, “St Thomas is still being punished for Paul Bogle.” As in 1865, life is very hard for the majority of Jamaicans. Where are the new heroes who will lead the revolution for affordable housing? The email address for the NHT is wecare@nht.gov.jm. Contrary to the promise of caring, the Ruthven Towers gamble suggests that the NHT doesn’t really give a damn about their most needy contributors.