The chairperson of the Central Housing and Planning Authority (CHPA), Mr. Hamilton Green, was recently reported as stating that between 1994 and 2015, 66,124 house lots were allocated by the PPP/C government; to date 28,220 of those lots are still unoccupied and there is a waiting list of 25,000 applicants. I am quite certain that if he drills down on these numbers he is likely to find that this level of occupancy is quite reasonable when one considers that they are related to poor people who have to acquire the land before they can begin to approach families and banks for funding.
According to Mr. Green, ‘the Administration has conceptualized a new model to improve housing delivery system and address the backlog of 25,000 applicants and particularly the 17,851 who can be classified as low income households.’ He claimed that the housing programme inherited from the PPP/C was ‘overly ambitious’ because it sought to provide serviced house lots to those desirous of acquiring them and turnkey housing units to those who could afford them (5,000 duplexes/apartments with infrastructure to cost $50b –CH&PA. SN 01/11/2016).
Some time before this statement, the junior minister responsible for housing, Ms. Valerie Patterson, claimed that that the coalition government has indeed prioritised ‘low income earners and state employees in schemes including turnkey apartments with rent-to-own options’ (Gemma Handy. The situation in the country is desperate. The Guardian 28/10/2016.). These two positions raise many questions, which will be considered later, but today my basic concern is with the housing condition of the poorest.
To me, although not exclusively, a housing policy that depends upon the use of state funds should focus firstly on the needs of the poorest of our citizens. While low-income earners in the public service, for example, are relatively poor, they are not the poorest and most disadvantaged category of persons. Take the situation of ‘Alpha, who built the two-bedroom home he shares with his partner and four children from salvaged materials he bought for 500 Guyanese dollars (£2), who says living in the community makes it hard to get a job. “I’ve written 25 applications this year – delivery worker, handy-boy, anything,” he reflects. “When they see the address they don’t respond. And you can’t use someone else’s address because they come and check’ (Handy, op.cit).
Largely because acquiring life’s necessities depends on the level of one’s income, on the face of them, policies that are framed in a manner that suggests that they intend to help the poor frequently do not address their situation. Providing homes for those who could marginally afford them allows state managers to claim that they are producing houses for the disadvantaged, although they are not actually dealing with the neediest. The projects outlined by Hamilton Green made no pretensions of addressing the housing needs of the likes of Alpha, who are to be found in large numbers in both rural and urban areas.
If my numbers are correct, he has in mind to build 5,000 fully infrastructured duplex apartments costing $10m each at a total cost of $50b. Normally, if one is to access a mortgage of $10m one will need to have a down payment of about 25% or $2.5m and make monthly payments of $55,000 or between 25% and 30% of one’s monthly income over 20 years. The minimum wage in the public service is $50,000 per month. Thus, an individual working for anything close to the public service minimum wage can forget the idea of owning one of these duplexes. The average family of four with two persons working and spending $80,000 per month on normal consumption (light/gas, transport, food, clothes, entertainment and maintenance and management) will need a monthly income above $135,000 to afford one of these duplexes.
Unless the CHPA chairperson finds substantial subsidies that become necessary not essentially because of the nature of the situation but from the manner in which the difficulty is framed, not even the poorest public servants could benefit from such a scheme. The PPP/C did err in, among other things, not paying sufficient attention to the requirements of actually housing the very poor in a sustainable manner and Mr. Green is compounding that error by seeking to utilise substantial state subsidies to do too much for too small a number of the wrong category of people!
A decent level of resources for the housing sector is necessary but the CHPA now confronts a quite simple management problem. The organisation should use its resources to facilitate greater occupancy and reallocate unoccupied lots to those willing to soon build. It should then acquire and distribute more land – after all, at the minimum lot size, 25,000 house lots only require about 5000 acres of land – around the country. In other words and in brief, the CHPA should:
Give priority to the really poor by identifying those who already have land and utilise some of its resources to devise various approaches, cooperatives, self-help, Habitat for Humanity, Food for the Poor, etc. to help them to build. Avoid putting all very poor and unemployed in the same surroundings and also coordinate training, employment facilitation and other relevant welfare services.
- Reallocate lots, with a promise to give future priority to the proprietor when s/he is ready to build. It makes no sense to have 28,000 unoccupied lots with a minimum existing infrastructure cost of $1/2m each (total $14b) unutilized.
- Find and allocate more land on the original basis: people must be prepared to build individually or in groups within a specific period.
- Establish some basic infrastructure – water, lights, basic roads – and upgrade these over time. At any level of income, the existence of aesthetically pleasing communities is less about building and more about design and management.
- Facilitate local authorities to quickly manage these housing areas with improved management, inspection and sanction regimes.
- Establish and enforce countrywide equitable rating rules to encourage the occupancy of vacant lots. This will not only increase housing formation but may even help to reduce the price of housing land.
There are many other important elements to what would be considered a reasonable human settlement approach. But given what is being proposed, the essential point I wish to make is that social/housing interventions by the state should attempt to be democratic and prioritise the poorest.
