Guyana faces a housing crisis and has a housing deficit of 20,000 units for low-income families, according to an Inter-American Development Bank (IDB) sponsored study.
“Despite declines in population due to migration, CH&PA [the Central Housing and Planning Authority], faces the need to meet a housing deficit of 20,000 units for low-income families. An additional 52,000 houses are over 30 years old and require improvement. Construction by owners and nonprofit organizations cannot keep up with the need. Rapid economic growth in the 1990s has helped convert this need into effective demand,” the study, ‘The State of Housing in Six Caribbean Countries,’ said.
The report analysed the implementation of social housing programmes in the Caribbean from 2000 to 2015 and found that currently one million people in the Bahamas, Barbados, Guyana, Jamaica, Suriname, and Trinidad and Tobago live in substandard housing. Rapid urbanization has created a housing deficit in the Caribbean, prompting a large share of the population to live in informal settlements that are disproportionately affected by landslides, flooding, and storm surges, the report says. Moreover, the absence of efficiently functioning land markets, inaccurate property registries, and land disputes have compounded the problem and slowed the pace of housing programmes.
According to the report, approximately US$1.8 billion would be needed to end poor housing conditions currently endured by the one million persons residing in substandard housing in the six countries.
In terms of Guyana, the report said that despite being a sparsely populated country with 3.5 people per km2, Guyana faces a housing crisis, as density is varied at the subnational level. The coastal regions combined have 9.6 people per km2, while the four hinterland regions, which occupy more than two-thirds of the total land area, have densities of less than one person per km2. Region 4, in which Georgetown is located, has the highest density—approximately 104.4 people per km2. Further, much of the coastal strip is below sea level.
The report said it is becoming increasingly difficult to find land in suitable locations to house the residents of Georgetown. As a result, housing schemes are being located further away from the city, where land is easily available and accessible to the government. The East Demerara corridor is fast becoming one of the most developed communities in the country, it noted.
It was pointed out that according to the 2012 Population and Housing Census, the national housing stock stands at 219,509 buildings, an increase of 16.9 per cent, or 31,813 buildings, when compared to the 2002 census. This represents an average annual rate of production of 3,181 buildings.
“This is significant considering that very few units were constructed in the 1980s and 1990s, but it is still below the annual requirement of 5,200 housing units,” the report said.
Despite the housing stock increase, the cost of owning a home in Guyana today is still relatively high, it noted. The report said that a few private developers, government organisations, and non-governmental organisations offer low-income housing. The average cost of building a low-income house varies considerably depending on the dimensions of the house and the building materials used. It costs the NGO Food for the Poor US$3,300 to build a basic wooden unit (20 feet by 15 feet) with a septic tank, the cheapest unit on the market, the report said.
It noted that these units are still out of reach of the average Guyanese income earner and must be fully subsidized by Food for the Poor. “High house lot and house prices and high house rents still act as constraints to development of the sector. Average selling prices are about seven times annual household incomes and monthly rents are from one-half to two-thirds of average monthly earnings,” the report said.
Further, the report said that government ownership of the bulk of developable land and a slow, cumbersome development approval and titling process constrained the development of private land markets. The lack of private land markets— combined with the absence of adequate mortgage facilities in commercial banks—limit the possibilities that the private sector could play in reducing the housing shortage, it said.
However, it pointed out that government is trying to encourage private sector involvement and investment in housing and has introduced a number of incentives. These include the use of a revolving low-income housing fund for the construction of housing units through public-private partnerships, construction and sale of houses by private developers on lots allocated by the government in various housing schemes, the granting of blocks of land to private developers for the development of housing estates and the sale of houses in an open and competitive manner.
The report noted that by 2005, over 60,000 lots had been distributed all over the country, which represents an average of 4,300 lots distributed annually compared to the 5,200 units required. In 1999, there was a backlog of applications dating back to 1993. This was due to a slowdown in processing by CH&PA in order for certain issues pertaining to infrastructure provision and occupancy rates to be resolved with the IDB. CH&PA has since cleared the backlog of applications.
“The distribution of 60,000 house lots is a remarkable achievement, but it means that there is a shortfall of about 1,000 lots a year,” the report said.
It noted that a major factor that has inhibited house construction and
occupancy has been the lack of infrastructure.
“Beneficiaries have been reluctant to move into schemes lacking facilities, particularly electricity. Approximately 60 per cent of schemes lack adequate infrastructure, as land divestiture ran ahead of the availability of financing for these services,” it said.
The report also said that between 1992 and 2003, the government processed and issued 23,223 titles. “Despite this achievement, the process of obtaining transports/titles is often fraught with delays, as the weak capacity of the Deeds Registry has slowed the process. For example, the target set for titling in 2003 was 10,000, but actual distribution was 6020, a shortfall of 3, 980,” it said.
The report noted that moves have been made to tackle this issue.
Meantime, while mortgage financing for middle-and upper income households in Guyana is relatively easily available, it is difficult for low-income households to obtain loans for housing, the report said. “This is due in large measure to the lack of specialized mortgage institutions in the housing sector and the collateral requirements of mortgage institutions. Furthermore, the relatively high bank interest rates militate against prospective homeowners by making monthly mortgage payments out of their reach,” it said.
However, it also said that the government, in a move to ensure that Guyanese receive necessary support in the housing sector, has created incentives to encourage mortgage lending to low-income families. It pointed to the New Building Society as well as initiatives for commercial banks.
“Thus, it would appear that the reform has stimulated some expansion to low/moderate income lending and that financial institutions have moved down-market,” the report said.
