Monday's announcement by Finance Minister Colm Imbert that the budgetary allocation for housing would be $610 million was the first time in five years that expenditure for this sector slipped below $1 billion.
Traditionally, the focus on housing allows a government to pursue several goals. Increasing the housing stock goes directly to quality of life, while construction of more units stimulates economic activity and provides short-term employment.
Mr Imbert’s budget confirms the Government now seeks to veer away from direct involvement in the sector while opening the door to more and more private partnerships, as well as making it easier for people to access financing.
“With a limited resource envelope, the Housing Development Corporation (HDC) is unable to construct and sell houses at the pace required,” the minister said.
He announced the HDC will be restructured so that its landlord function – as owner and manager of rental accommodation – will be separated from its function as a builder of affordable houses.
But it is unclear what aims are being pursued by this plan, especially since both functions might be regarded as different sides of the same coin. Under the law, the HDC has a mandate to “do all things necessary and convenient for or in connection with the provision of affordable shelter and associated community facilities for low and middle-income” people.
The benefits of the merger of the Trinidad and Tobago Mortgage Finance Company and the Home Mortgage Bank also need to be carefully enumerated, especially given the latter agency's long history of controversy.
More straightforward is Mr Imbert’s increase in the tax allowance to first-time homeowners, which is a welcome step in the right direction.
However, there remains a pressing need for the Government to reconsider its approach to rent relief, as well as the issue of the establishment of regulatory bodies to oversee rent rates and standards to ensure fairness.
With about 175,000 applicants on the housing waiting list, the State’s effort to address housing feels very much like a drop in the bucket. This is despite home improvement grants and ongoing construction projects.
Though the State has said it is pursuing a plan, which involves piecemeal construction of various developments, it is also hard to see any alignment between urban planning and construction standards. It is a matter of public record that there have long been questions about standards at many housing projects over the decades, with little indication that things are getting any better. Though private partnerships will continue, it is not clear how standards will be regulated and whether there will be uniformity across such developments.
Restructuring is well and good, but with question marks over the HDC’s past forays into multi-million-dollar housing schemes, the State would do well to rationalise its focus. In theory, high-end housing schemes can help fund the HDC itself, through generating hundreds of millions of dollars in revenue.
However, the current economic climate suggests the time has come for such posh units, which have never squared well with the HDC’s mandate, to be evicted from the overall housing vision.