Thomas
Lavern Clarke, Staff Reporter
NATIONAL HOUSING Trust, the state housing giant, has plans to construct thousands of apartments at low cost - low enough for a minimum-wage earner to afford.
But to do it, the state agency will be subsidising both the construction of the units as well as the final price at which the apartments are sold, at least initially.
The subsidies, says NHT chairman Kingsley Thomas, have been budgeted in the $5 billion that the Trust will invest in the programme over the next three years. Thomas admits that his agency had failed so far, in its 25 years of operation, to deliver viable homes at low cost, literally calling the starter 'quads' concept 'a failure'.
But the agency now thinks it has found the solution to affordable family homes, having studied Malaysia's approach to housing. According to Thomas, the Malaysians now build a three-bedroom apartment at the equivalent of $550,000, by going up.
The strategy is in the density, that is, medium-rise walk-up blocks that use much less land space. The concept will not allow the yard space that Jamaicans crave and which NHT now gives them but, said Thomas, the time has come for locals to accept that they cannot afford that type of housing.
For Jamaica, the NHT has concluded that a similar unit can be delivered by the contractor for $950,000, and a two-bedroom apartment for $850,000. The figures are contained in the requests for proposals to 'design and build' the housing blocks, but Thomas said the price will be more precisely determined on the bids that come in, which must include illustrative designs.
He adds that the shadow prices he has suggests that the indicative prices in the request for proposals are achievable. The request actually invites strategic partners to provide "elegant mixed-housing solutions" for low and middle income groupings.
At this stage, the Trust has not yet decided the price at which it will likely sell the apartments, nor the amount of the subsidy to be applied.
The resale price to NHT beneficiaries will be determined via a 'means test', said Thomas, and the prices determined according to what the target markets can afford.
NHT will be financing the infrastructure for the apartment projects, and the state will also take on the substantial cost of securing the development perimeter meaning that the Trust will be dealing with any extortion attempts. On-site security will remain the contractor's responsibility.
Thomas says he is advised that security costs now run as high as 40 per cent of the pricing within a contract. Incorporated Masterbuilders president, Don Mullings, said in agreement that contractors now pay out as much as half a million dollars per month to secure their sites.
With the contractor relieved of those costs, Thomas told Sunday Business he estimates that the units can be delivered by the winning bidder at 40 per cent less the cost at which NHT currently acquires its 'solutions'.
According to figures disclosed by Mullings, contractors are now delivering at $1.2 million for a two-bedroom and $1.5 million for the three-bedroom unit.
To unfold under the Urban Renewal Programme, the initial housing plan is to develop 3,000 apartments in urban centres using the Malaysian model, but adjusted, said Thomas, to Jamaica's climate and environment.
The idea is to put blocks of apartments on selected properties islandwide four blocks per site inclusive of commercial, green and recreational space. The middle income group will get the added choice of two and three bedroom townhouses "of the row and duplex varieties."
But the exact look of the blocks and units, and even the sites for some of the developments, will be more clearly defined on the basis of the winning bid.
Tenders are out locally for 'design and build' contractors, for which the bidding closes May 6. To help contain construction costs, the NHT has specially advertised for consortiums and joint venture firms to bid for the job.
As for concerns about whether the apartment concept will succeed, Thomas said his agency will be employing specially trained building supervisors and will maintain the common areas under a "strong management" programme. He also points to similar schemes in Cooreville Gardens and Oaklands, both in St. Andrew, as examples that the concept can be made to work.
