Published Thursday 4th March, 2004

There is an urgent need to build new affordable homes to preserve and enhance the national standard of living, however, as we mentioned last week, we need to consider where we put these. The issue is one for both private and State housing, since the concerns are related.

The location decision is usually an important one, but here in T&T we have these additional elements -

• Supply - The limited supply of suitable, available land;
   

• The NIMBY factor - These are the people who agree that more homes need to be built, but they are of the even stronger opinion that these should be Not In My Back Yard (NIMBY). The reasons behind these conflicting opinions are interesting, from 'young people need somewhere to live' to 'what we going to do with all this traffic when they build all these homes? People know that the only way that the steep rises in the prices of homes will be slowed is if the supply is dramatically increased, but they are also concerned over the impact this new construction will have on them as existing homeowners;
   

• Political element - Given the government's ambitious annual target of 10,000 new homes, the recent sequence of very close election results and the delicate balance in the 'marginal' seats, the location of these new homes is an extremely sensitive question. We have even had the allegation that some of the new homes are being carefully located so as to prejudice the party in opposition with additional allegations as to falling property values from senior political figures.

The fact is that property is central to understanding the political economy of a society such as ours, where so much hinges on what one owns and who are ones' neighbours. Affluent people already own a nice slice of the pie, the value of which can, in their view, only be preserved if the status quo is maintained; i.e. the shortage of housing preserves high values. Those who do not enjoy that position are even more anxious to get a piece of the Trini dream - 'a place to call home' - and the factors listed above only add heat to the discussion.

To bring some light to the discussion -

• Urban Development - The redevelopment of serviced urban lands already in State ownership is a better use of capital since the infrastructural costs of raw development land can be avoided. Generally speaking, it makes sense to develop serviced urban land - i.e. with all the services like water supply, sewerage, electricity, roads and so on - in preference to the more expensive choice of other 'raw' sites. We will return to the other implications of this aspect of the site selection issue in a future column.
   

• Size of the Society - In light of our limited size, the new affordable homes need not be exactly in the neighbourhoods of the 'homeless' people. We will always need to build new State housing in areas which are already occupied.
   

• The value issue - We have heard from some surprising places that values of private property in certain parts of San Fernando are set to decline if the government proceeds with its planned construction of multi-story apartments off Circular Road. Of course, we have had no evidence of this and I am unaware of any value decline in this country arising from the construction of State housing. Frankly, the entire issue smells of a kind of 'coded' racism disturbingly reminiscent of the mini-furore recently raised by Westmoorings' residents when plans were announced to build new State Secondary Schools in that area. This also brings in the controversial 'betterment' debate, since there are provisions in our Land Acquisition laws for property owners to be compensated for a reduction in value which has arisen as a result of public works. The question here being whether property owners are willing to pay increased property taxes for the increase in value arising from public works. New roadworks like the Cross-Crossing Interchange and the much-discussed Churchill-Roosevelt/Uriah Butler interchange all have the effect of increasing property values.
   

• The Medium-term picture - The loaded question is whether the new, large-scale building of State housing will have the effect of driving down property prices in those areas. It is my opinion that the strong demand for property and its limited availability, together with the strong outlook for national income would limit any declines in values. The most that we might say is that, if the government's ambitious plans bear fruit, there might be a reduction in the present steep rate of price increases. It is also important to consider the rôle of quality housing in improving social stability. The national picture, with some small exceptions, is one of dynamic price increases; the worst areas are merely static. As the old saying goes - 'A rising tide lifts all ships'.
   

• The Power Equation - Ultimately, all this is pointing to the fact that in the absence of rational policies and public accountability, there is scope for perceptions of bias, however unfounded these might be. This could flow from any side politically and there needs to be a move towards more open public policy formation and execution. As we said from the beginning, good public administration has a number of implications, among those being the end of some of today's methods of policy formation and delivery.

Next, we will be examining the issue of taxation on property and the future of our cities.