Having received several quality responses from people involved in the tourism industry to last week’s column, many of them articulating what has been proposed for tourism development here over the...
You are here
Renting your way home
The names Spring Village, Cashew Gardens and Vegas De Oropune are innocuous in themselves. The images of squatters standing by the broken remains of what were once homes, however, have launched these communities into the national spotlight at different times. Beneath this stand-off between squatters and the Government lies the country’s chronic housing shortage.
The squatter represents yet another side of the issue. Unlike many people of middle class and middle income—to solve their housing need—the squatter goes outside the system and accesses or creates informal housing networks by appropriating government or private land.
A recently released report from the Inter-American Development Bank (IDB) has suggested that the solution for both groups may lie in generating more homes for rent. Titled “Rental Housing Wanted: Policy Options for Latin America and the Caribbean,” the report said that a housing deficit continues to plague the region.
What the report says
According to the report, available homes are lacking in both quantity and quality. One of the results is a rise in informal settlements like those described above. Another is the continuing rise in the price of homes that can squeeze potential lower- and middle-income buyers out of the market. The report said the region’s governments should intervene to not only create more rental housing stock, but also to incentivise the private sector to put more homes up for rent.
While the report recognised that most Latin American and Caribbean governments encourage homeownership as a matter of policy and have designed a number of programmes to assist with this, it said, over the long term, this is not a viable option. The document proposed that regional governments should adopt a rental programme, along with their traditional advocacy of homeownership.
According to the IDB report, some of the spin off benefits of such rental programmes include more sustainable land-use patterns, housing less segregated by class and income, an increase in available housing, which, in turn, would carry prices down and increased opportunity for private landlords to increase their income.
IDB’s country representative:
According to Michelle Cross Fenty, the IDB’s country’s representative, “The rental market could become a key instrument of housing policy in the region. Governments can complement existing property-support policies with measures geared towards incentivising this type of tenure.
“With regard to supply, governments could support the provision of small-scale rental housing and promote the creation of large-scale commercial production. As for demand, governments could consider direct subsidies and explore other alternatives that combine rent and ownership, such as leasing. “Lastly, with regard to the institutional framework, governments should eliminate excessive rent controls, ensure a more timely repossession process, improve market information, and link urban planning to rental policy.”
Could the adoption of a massive rental programme benefit those who feel they have no choice but to access informal housing as well as those of middle class and middle income? While the only Caribbean island included in the IDB study was Jamaica, there are some parallels that can be identified in T&T. Squatting is a real issue here as housing has become increasingly out of reach for those of middle class and middle income. Can the adoption of a massive rental programme provide relief for these groups?
What the numbers say:
The Sunday BG was able to access from the Central Statistical Office, figures from the 2011 Population and Housing Census’ data on dwelling units. Out of a total of 398,571 households, 78.4 per cent, or 312,355 are either fully owned or owned through a mortgage arrangement. Therefore this country, at least, conforms with the IDB report’s assertion that there is a bias towards homeownership in most territories throughout the region.
The highest number of “owned” homes are in the regions of Tunapuna/Piarco (,48,269) Couva/Tabaquite/Talparo (44, 143) and San Juan/Laventille (30, 985). T&T Mortgage Finance CEO, Ingrid Lashley, said in the April 6 Sunday BG article, “The Middle Class Syndrome,” that homeowners choose to gravitate towards the East/West Corridor.
According to the census, Princes Town (87 per cent), Penal/Debe (85 per cent) and Siparia (87 per cent) are also above the national homeownership average in terms of percentage of homes owned. Meanwhile, nearly 20 per cent of total households, or 77,806 have some type of rental arrangement. Rental arrangements were highest in San Juan/Laventille, Tunapuna/Piarco and Diego Martin, also serving to underline the trend of the desirability of locations along the East/West corridor according to Lashley.
City centres polled relatively small numbers with both Port-of-Spain registering 6,928 homeowners or a percentage of 56 per cent, well below the national average per cent of homeownership. San Fernando, too, is below the national average at 10,589 or 70.3 per cent. Meanwhile, Chaguanas is above the national average at 79 per cent or 19, 237.
According to the census figures, there are 3,002 squatter households representing just under one per cent of the total number. Most off these are in San Juan/Laventille, Tunapuna Piarco and Couva/Tabaquite/Talparo. Based on these figures, it can be concluded that squatting, while an issue, does not exist at the level present in other Latin American and Caribbean territories.
Minister of Housing responds:
The Sunday BG posed questions related to the suggestions made in the report to Minister of Housing and Urban Development, Roodal Moonilal, who said: “As a government, we respect the substantial research output and recommendations from the IDB, but we reserve the right to fashion public policy in the national interest given our peculiar social and economic circumstances.”
Moonilal said these circumstances include T&T history as a plantation society and of colonialism. As a result, it becomes important to the average citizen to own their home, as a form of “empowerment and economic participation” as well as “social capital.” He said this is a position the Government intended to continue to support by encouraging home ownership.
He also said as a culture, Trinbagonians are more inclined to undertake a rental arrangement out of need and not desire. Moonilal said most HDC applicants viewed paying a rent as “dead money”, when compared with an “active mortgage situation.”
He said that he was noticing a very gradual shift towards apartment and townhouse living developing among middle-class professionals. For the most part, however, he said Trinbagonians continue to prefer single-home arrangements to “vertical living” and he expected that things will remain this way for some time to come.
Moonilal admitted there was merit to the idea of a formalised rental scheme but pointed out that the Government was already the country’s largest landlord with several rental units and “thousand and thousands” of tenants across the country. This system, he said, had its drawbacks in that it put additional burden on taxpayers who are paying for the maintenance of rental units. Owning a house, on the other hand, placed the cost of maintenance on the homeowner, as well as fostered a sense of responsibility.
The total government rental stock—according to the 2011 population census data on dwelling units—was 6,489. Moonilal said an average of three homes are distributed on a daily basis and the Government planned to have three house distributions in north, central and south Trinidad some time in 2014. The housing minister acknowledged this was not enough, but said the Government has been taking other steps to alleviate pressures in the housing sector.
“We encourage private-sector development through incentives. We have incentivised that sector by providing tax allowances for private-housing development. We have also embarked upon the Land for the Landless programme to ensure we have the distribution of lots of land for citizens who may be interested in land as an option as opposed to a house. Between that programme and incentivising the private sector to accelerate home construction, you hope that you can make a dent in the backlog of applicants for housing.”
Regarding the census statistics, the housing minister was asked about the political significance of several of the numbers, for example, the high number of homeowners in what would be considered UNC strongholds. He said it was “not surprising” given that rural areas, as represented by districts like Siparia, Princes Town and Penal/Debe had the land space that made more single home arrangements possible. In contrast, there has generally been less availability of land in the north west of the country.
The IDB position
The Sunday BG asked the IDB whether the suggestions in their report would become a policy recommendation for the region. Andres Guillermo Blanco, senior specialist, housing and urban development at the Washington headquarters, answered in the affirmative, but with conditions.
“We are recommending that governments complement existing policies based on homeownership with policies oriented to support the rental market. The key is to offer different alternatives so different segments of the demand can better match preferences with the available housing solutions.
“We have initiated a dialogue in this regard with several governments in the region and we are helping some of them to design and develop policies to promote the rental market within an overall framework of housing and urban policies based on the concept of housing as a service.” He said this should be taken in consideration with what the government of the particular territory wants.
“We believe that housing ministers are in the best position to know what is better for their country and therefore we will continue supporting the policies proposed by the government.”
The future: here, but not now
Would an increase in rental units have positive spin-off effects as suggested in the report? It seems likely, given both Latin America and especially the Caribbean’s limited land space, alternatives to the single family home and horizontal spread have to be seriously considered by policymakers in the near future. As land becomes less and less available, spread must go upwards and apartment living has to be seen as an option.
Cultural biases in T&T may prevent this from happening in the short- to medium-term. However, there is a preference for single family homes and locations on the East/West corridor. Even if increased rental units become available through government and the private sector, there remains the question of whether the current level of infrastructure could accommodate more residents in already oversubscribed areas like the East/West corridor.
As Dr Moonilal also explained, the Government’s policy position is based on the cultural norms of T&T as well as its wish that more people participate and invest in the economy by purchasing a home. As a result, therefore, homeownership remains the desired goal for both Trinbagonians and the Government. But the suggestions of the IDB report have to be weighed in the balance, particularly in the long run.
This, as more and more citizens demand a place of their own, as single home options become more scarce and more expensive and as land becomes less available.