Construction costs limit ability to provide more housing, says NHT

Senior staff reporter

Friday, December 07, 2018

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National Housing Trust (NHT) Managing Director Martin Miller says while there is an impression that the agency is cash-rich, it continues to be constrained by construction costs as it tries to provide Jamaicans with housing solutions.

Currently, the demand for housing is 19,000 annually, but the NHT has only been able to build between 4,000 and 5,000 solutions annually.

Miller explained this week at a meeting of the Public Administration and Appropriations Committee (PAAC) that with the average cost of building a unit at $5 million, which he noted is “extremely conservative”, the agency continues to be challenged in meeting demand.

“Based on the numbers we are looking at, it is unlikely to cost $5 million. Right away you see the challenge that we face, that it cannot be just a simple programme that is dealt with by a NHT and HAJ (Housing Agency of Jamaica). That is the reason we are trying to engage the private sector to help the NHT to stretch the use of the resources,” he pointed out.

Chief technical director in the Ministry of Economic Growth and Job Creation Doreen Prendergast further explained that under the national housing policy, which is now in draft, the intent is to collaborate with private partners to address the housing shortage.

“From as far back as 2012 it was projected that we would need about 15,000 housing solutions annually, plus a replacement stock of about 4,000 annually. We have not built anywhere near that number over the years… so there is a very, very wide deficit,” she stated.

At the same time, Miller said the NHT is doing extremely well financially and remains a viable entity, with a sound asset base. He said that mortgage arrears have been reduced from 15 per cent to between 11 and 13 per cent.

According to the NHT's performance report for April 1 to October 31, 2018, the agency has devised mechanisms to shorten the development cycle and increase the supply of housing solutions, through initiatives such as partnering with developers to undertake the construction of low-income housing.

The NHT has also reviewed its land acquisition policy to shore up the number of suitable sites in its land bank.

“We went through and tried to identify lands that the infrastructure would be so high that it would not necessarily render the programme valuable for contributors,” Miller said. “We have also separated some land that we purchased on the premise that we may have been able to acquire or get change of use. It is clear that [for] some of those we are not going to get change of use, so we are in discussion with the Ministry of Agriculture.”

He said the NHT has also gone to the market to dispose of other lands.

Another strategy is a proposal to collaborate with employers in targeted industries to provide housing for their workers.

Meanwhile, the NHT said housing starts year to date at 1,510 exceeded the 864 planned starts by 646 solutions. Also, 1,093 solutions were completed over the 972 planned. The agency said the original targets had to be adjusted over the period due to factors such as inclement weather, supply of materials, and approval issues.

The NHT is targeting 16,687 housing starts and to deliver 11,875 new housing solutions by the end of March 2021.

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