Who qualifies?

Published Thursday 9th August, 2007

Last week we suggested how one could rank the people in our housing market from those who cannot afford any housing, to those who can afford several.

This week, we begin by examining the capital expenditure of the Housing Ministry as set out in the bar chart for the period 1992-2007.

The figures are from the estimates of expenditure, published by the Ministry of Finance. This capital expenditure would pay for new homes and the associated infrastructure such as roads, drains and other services. The chart shows a dramatic increase in that spending, particularly since 2003.

On this count alone, there does appear to be a serious commitment of resources to deal with this national issue. Of the $2.24 billion budgeted for capital expenditure on housing in period since 1992, about 60 per cent has been in the last four years; a total of $1.325 billion between 2004 and this year.

Another way to assess the ministry’s performance in this area is to compare the estimated (budgeted) with the actual expenditure over the period. In both 2004 and 2006, the budgeted amounts were exceeded, by 56 per cent and 63 per cent, respectively.

We have no access to detailed information on output in either numbers of new homes or unit costs or costs per sq ft, so it is not possible to comment on those variances. One would hope that adequate management controls are in place to reduce the scope for waste of public money.

Given the rate of expansion in the capital programme and the ambitious targets set in this arena, it is vital to go further than management controls to ensure that output details are also made public as suggested above.

We need to look beyond the vast monies being spent on this public programme to ask:

·         How all these new homes are being allocated?

·         To whom do the new homes go?

·         What are the rules?

The ministry’s allocations policy for the new homes is found at http://www.housing.gov.tt/Allocation_Policy/Allocation_Policy.htm and is set out in the sidebar.

It is interesting to pause and consider the position here.

Proper housing is important to developing a better society, so much so that vast sums of taxpayers’ dollars are being spent to build those long-overdue new homes.

The basis of the Housing Ministry’s policy, noted at the start of this column, that “every citizen should be able to access adequate and affordable housing” does not sit well with its own allocations policy.

From our reading of that policy, it seems that, once the four basic requirements are satisfied, one qualifies for housing. Furthermore, it also seems that there is a random lottery system for allocation of 75 per cent of the units. Perhaps this was meant to ensure some fairness in the allocation process.

It seems obvious that this housing policy is vital to improve the living conditions of our fellow citizens who are not prosperous enough to afford high-priced, private homes. Yet it seems that the preference given to promoting home ownership has spawned a questionable allocation policy, one which gives priority to those who can afford to buy or rent the new homes built by the State. Which itself contradicts the fundamental policy objective. This is a flawed policy which gives you a ticket in the lottery for a new home, only if you can afford one. But, as the old National Lottery slogan used to say “if you haven’t got a ticket, you haven’t got a chance.”

Surely there must some weight given to need in making an equitable allocation of scarce public housing. Is there a case for measuring housing need?

It is our view that that is the only way the core policy objective can be realized. If that is accepted and adopted, we would also need to recognize and reflect that those in housing need and those who can afford housing will always be in tension with each other. Hard choices have to be made if we are really to progress on these issues.

Some final thoughts.

Is there a place for larger, poorer households in this programme? Once you satisfy the four requirements set out in the sidebar, does a single applicant qualify for the same size and price of home like someone with five children?

Does the allocation policy assess them all as having equal entitlement? Do you have the same chance in the housing lottery?

If that is the case, and there is nothing in the allocation policy to indicate otherwise, then the housing policy is a vast misallocation of State funds. We are not here imputing illegality, but there is more to be said on this.

Next week, we will conclude by examining the issue of alienation of agricultural lands and the development of equitable policies in this general arena of housing.

Afra Raymond is a director of Raymond & Pierre Ltd. Feedback can be sent to afra@raymondandpierre.com.