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A National Housing Trust for the people

Thursday, December 03, 2020

We don't intend to waste time arguing over whether the Government has any option, other than borrowing, to raiding the coffers of the National Housing Trust (NHT) for the proposed $11.4 billion annually, or $57 billion over five years.

After the estimated $25-billion stimulus package used to bail out Jamaicans hit hard by the novel coronavirus pandemic, and the still not yet fully estimated cost of the devastating flood rains this year, the question is where else would that money have come from for budgetary support?

Of course, we would suggest that the arguments about taking money from the Trust are largely based on the fallacy and foolish gamesmanship of different Opposition parties until it is their time in power to dip into the funds themselves.

The NHT does seem to have this uncanny ability to survive these large drawdowns from Government, $11 billion a year — starting in 2013 under the Portia Simpson Miller-led Administration, with Dr Peter Phillips as finance minister.

The decision of the Andrew Holness Administration in 2017 to continue the drawdowns is head-spinning when the criticisms while in Opposition are re-read in real time.

And if anyone was expecting new Opposition Leader Mark Golding to be any different, he has not disappointed.

We have, in the past, argued, and we reiterate now, that if the NHT can survive the Government's forays into its funds, without depriving contributors of housing opportunities, more can be done with some of those resources to cushion the hardships they face.

In this latest iteration, Finance Minister Dr Nigel Clarke insists, as did his forebears, that dipping into the NHT's coffers to prop up the national budget would not adversely 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 is not telling us anything we didn't know.

However, we believe that contributors would love to know from Dr Clarke why is it not possible to help to increase their disposable income by making faster refunds of contributions?

The concept is that one begins to receive refunds in the eighth year of contribution. How damaging could it be for the NHT if refunds begin from, say, the fourth or fifth year of contribution? This would fast-forward the refund of billions of dollars to contributors on whose behalf this money is being held by the Trust, and thus facilitate inflows of billions of dollars into the economy.

Alternatively, why not allow contributors who have years of refund not yet due for collection to use the present value of this sum as security or repayment for a loan from a lending institution. No doubt, lending institutions would find this source of security to be very attractive, and it would not affect the NHT financially if the loan is repaid at the time when the refund is normally due.

There is also Senator Damion Crawford's suggestion — with which we agreed — that the NHT should consider establishing a rent-to-own system that would make homeownership easier for young people.

Under the rent-to-buy proposal by Mr Crawford while in Opposition, the NHT could make houses available to young people at a monthly rate that would include the rental cost and a savings component.

This is what should be expected from a caring government.