Redeveloping downtown Kingston
Real estate developers say action needed to force property owners of derelict buildings to fix or sellWednesday, June 16, 2021
BY DURRANT PATE
All across the globe countries pride themselves on ensuring that their capital cities are developed in keeping with changing times.
However, concerns exist about the slow pace of redevelopment taking place in Jamaica's capital city, particularly downtown, which is the epicentre of trade and commerce in the country. The concerns are real and the age-old problem of derelict buildings spawning downtown Kingston is not going away anytime soon.
Real estate developers are making their voices heard about the slow pace of the redevelopment, and the continued eyesore of these derelict buildings overrunning the city. The Government, they say, is partly to be blamed for the indecisiveness with which they have treated this matter for years, and not doing enough to force the hand of property owners in downtown Kingston to either fix up their derelict buildings or sell them to others who will.
Managing director at Issa Constructions and real estate agent with Coldwell Banker Peter Issa is among those real estate developers willing to redevelop downtown Kingston one derelict building at a time. He told the Jamaica Observer that his company has already started this process, having acquired three derelict properties which are being renovated into office and commercial spaces.
Property owners not selling
Many of the property owners approached by Issa to sell their derelict buildings for redevelopment are unwilling to do so. According to Issa, ”rather than selling they are waiting on others to come in and develop the location, after which they are willing to sell and make a killing based on the price to be charged.”
He is adamant that the Government needs to do more to force these property owners to fix them up or sell to developers, like him, who are more than willing to develop these idle buildings. Issa conceded that the private sector needs to do more, likewise the Government, to develop real estate in downtown Kingston.
He charged that a lot of wealthy people own property left in a dilapidated state, arguing that the Government needs to hold them accountable.
Derelict buildings becoming an islandwide problem
Another real estate developer, Managing Director (MD) of First Rock Realty Pierre Shirley, weighed in on the matter, noting that the spawning of derelict buildings is not just a problem in downtown Kingston, but throughout the entire island. “Too many properties sit down idle and unproductive and not contributing to the growth and development of the country because of absentee ownership [the property is not being used by the owner],” Shirley said.
He contends that, “This problem expounds, especially with properties that are owned by people residing overseas; many of them who attained these properties through inheritance. This is a consequence of the properties being inexpensive to own, by that I speak specifically to property taxes.”
Call for high property tax levied on derelict buildings
Shirley posited the idea of levying high property taxes on derelict buildings as a possible solution to getting these property owners to either sell or fix them up. He told the Business Observer, “If the property taxes were higher, property owners would be more motivated to realise and materialise the value of the property, whether by selling it or developing it themselves, but because it practically costs them 'nothing', there is no motivation there.”
Noting that the subject of increasing property taxes is not a popular one, understandably, the First Rock Realty MD argued that, “The approach and consideration does not have to be a blanket formula for every property across the island. Increasing the property taxes on undeveloped or underdeveloped, non-utilised properties in downtown Kingston is a win-win situation for the Government – increased revenues from the property taxes or increased revenues from the development of the property.”
He was quick to contextualise his suggestion for a property tax increase, stating that the tax would not be applied to all properties but on derelict and or underutilised vacant land in and around surrounding areas that are developed and/ or being developed.
In part 3 of our feature, we will look at the government property incentive programme for blighted areas, which has failed to inspire property owners and real estate developers to develop properties in downtown Kingston.
Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at https://bit.ly/epaper-login