IN THE last few years, while operating out of the Office of the Prime Minister in the Patterson administration, the National Housing Trust (NHT) has been thrust into the provision of inner-city housing. The good intention was that part of the considerable assets of the NHT, now in the region of $55 billion would be used to help off-set the serious need for low-income housing in the inner city. Then Prime Minister Patterson went even further to extract from the Trust a one-off 'contribution' of $5 billion for education transformation.
The NHT was conceptualised and established as a contributors' scheme. Two per cent of the salaries of all payee employees is appropriated for the purpose, matched by three per cent of the wage bill of employers. Mortgages and loans were to be made available to contributors on the basis of their ability to service these debts from their income stream.
The disqualification of large numbers of contributors at the lower income end to obtain mortgages and loans has been a sore point in the operation of the NHT. Making Trust funds available to unemployed non-contributors with even weaker income streams poses its own serious problem. As we reported on Sunday, of the 353 mortgage accounts held for properties in Trench Town and Denham Town only 13 are current. Another eight have been in arrears for under one year while all others, 332 (94%), have arrears exceeding one year.
Jamaica has long suffered from chronic housing shortage. The Cabinet at its January retreat this year agreed that 30,000 houses would have to be built annually over the next five years to meet the country's housing demand. According to the NHT's website, studies undertaken before the inception of the Trust in 1976 had indicated that 23,000 housing units would be needed annually over a 10-year period in order to satisfy the then existing needs. So, if anything, the problem is worsening. In the first 10 years of the NHT, which celebrates 30 years this year, only 20,000 mortgage loans were made, or, on average, a mere 2,000 per year. There are now just over 100,000 mortgages held by the Trust, nearly a half of these being signed in the last five years.
There is, therefore an urgent need to expand housing stock as rapidly as possible, particularly for the poorest Jamaicans. Government may very well wish to even provide 'free housing' for certain categories of the most marginalised Jamaicans by non-discriminatory criteria and covering both urban and rural Jamaica. The new Portia Simpson Miller administration has announced a US$32 million fund for inner-city renewal, but nothing yet for rural renewal which is equally necessary. This is the sort of Government funding from which special non-commercial housing financing should be drawn.
Even as the Trust is pushed further into a $5 billion urban renewal plan, the NHT says it "is fully aware that the inner-city project is a high risk one." Much of what is currently owed and will be owed may turn out to be uncollectible. As urgent and as significant as the need is for urban renewal, the NHT is being pushed beyond its mandate and is being forced to play loose with contributors' money in breaking its own rules for the serviceability and recoverability of mortgages. It was never intended to be a social welfare agency.
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