Speech by the Prime Minister

NHT Board Retreat October 6 , 2022

Inspect a new piece of infrastructure that we delivered along Spanish Town Road, it’s a massive water main. That water main, by the way, would have replaced water mains that were laid upwards of eight years ago. I call those kinds of investments nation-building investments and you know entire generations will benefit from that including people who will get houses along that corridor and I’m hopeful that the NHT will be the sponsor of some of those houses. But again, I also ask you to forgive my dress-down attire. I’m coming from a community called Clifton.

Clifton is in the centre of the Bernard Lodge development area, I don’t know how many of you know that community. I visited that community more than 10 years ago. I had occasion to visit and it was not as expanded as it is now, it has grown, but it is a community that has its origin from sugar workers. The persons who used to work on the Bernard Lodge Sugar Estates, they used to live in that area so they have some historical rights which the government has recognized and through various administrations incrementally we have sought to regularize that and we are at the point where the community has been surveyed, lots have been identified, and titles have been issued in the sense that the SCJ which holds the land has titles now to issue to the properly identified and certified occupants of the lots in the community so it is a community that we will regularize.

There is a story to be told about the community because it is in the centre of thousands of acres of land around it. It is sometimes isolated, sometimes forgotten, people don’t even know that that community is there and so they have just lived there for a long time without much interaction with state services but in 2016 we started looking at the Bernard Lodge property and we note that there were so many persons who had an interest in acquiring lands there. It’s agricultural land in the sense that it has grown sugar for centuries. It has housing potential in that some of the lands that were sugar lands were converted into housing to expand Greater Portmore.

So, we saw that there was heavy competition for lots, for land and we decided that we could not allow haphazard development to go on in the area. We had to strike a proper balance, and then we had to be fair about how the use of the land was undertaken. So, we decided that we would not just go to a divestment process without first of all developing a master plan and we went about getting the services of some of our best master planners, and they developed the Greater Bernard Lodge master plan. It’s an excellent plan that took into consideration environmental issues, took into consideration the need to preserve the agricultural enterprise that was carried out on the land, the need to acknowledge the rights of people who lived on that land coming from the sugar estates and there are some strategic value to the land as well. We have to protect the water that is underneath it. It has potential for the light industry so the master plan developed all of that.

There are some threats as well, it’s prone to flooding, so all of those things are put into the master plan so you would see on the plan that we have reserved almost a hundred acres of land as a retention pond that should there be flooding, the water can be directed there. We have made significant allocations for open spaces and recreational spaces and green spaces, it is going to be truly a wonderful place to live when it is fully developed.

We also took into consideration the traditional way in which development is done in Jamaica. We divest the land, the developer takes the land and the developer builds their own infrastructure or is obligated to build their own infrastructure so you could have three communities on the same large property but they have three different levels and quality of infrastructure. One developer might say, I’m gonna put two inches of asphalt on my roads. I will bring in water mains at a certain point. I will use a certain level of construction for the sidewalks and so forth and so you get a product sometimes that could be very high quality but you could also get a product that’s very low quality, deteriorates over time, doesn’t preserve the value of the investment so what we have decided to do is that when we divest the land, we will also immediately say to the developers you must pay an impact fee and we’re not going to allow you to do development; there is a special purpose vehicle to which you will all pay into, and that special purpose vehicle will do the build-out of the infrastructure.

So if you go into that area now, you will see the laying of water mains, sewer mains and describing of roads because all of that is going to be done. It is not proposed to carry road infrastructure into every development, the developer would still have that responsibility but the main road leading in and the water infrastructure leading in, sewer infrastructure, all of that is going to be built upfront and the master planning takes care of a lot of the approval processing because the approval entities would definitely know already upfront what is required for the area and the developers would know upfront because there is a master plan so the process for approval would be much faster. Built on top of that, instead of having individuals coming to lobby for land to purchase, what we did is to put in place an enterprise team that manages a divestment process.

Now, because of the legacy issues involved, there were some lands that we had to settle outside of this process, but everything else was done I would say in a very transparent way using an enterprise team which is still in the process of divesting the land. So we are very confident that Bernard Lodge is going to be a model community. Model in the sense of the development, how it is done, in how it incorporates the environment and how it incorporates residential, commercial, and agricultural because a part of the story, which is not told is that more than 2000 acres is reserved in the development for agriculture. Agriculture is taking place there now.

Now, I’m not telling you it’s perfect, farmers have reached out to me to complain that they still have challenges, it flood when it rains, they don’t have access to reliable water;  there are issues, but as we divest the properties and the SCJ gets the funds, they have been directed that they should use the funds to improve the conditions for the farmers and that would include the installation of a pressurized irrigation system, the construction of two dams in the area, reservoir as we call them and building out farm roads and the building of a small for farm enterprise so that the farmers can get access to their feeds, their sprays and so forth. So, that is a part of the Bernard Lodge story which hasn’t been told.  It’s a working progress, but when it is finished I think all Jamaicans will be proud of that. So you’re looking, therefore, at a community that will provide residences at various levels of affordability. You’re looking at a community that will have light industrial and light manufacturing in it. You’re looking at a community that will have space reserved for a high school, space reserve for health facilities, for security, a police station, for community amenities, for a large park, and for a retention pond that we’re trying to figure out how do we create this as a pond so that there will be a body of water in the area, almost like a park, that’s what they’re trying to work out now so it’s gonna be a fantastic community. It will also have what we call an urban area and that is now in the phase of divestment, we have expressions of interest. It’s for people to come and develop that urban area so it will become a centre of lifestyle, a centre of modern living in Jamaica, a formal community that is well structured, orderly and diverse bringing in all Jamaicans from all walks of life.

Now, I start at this point with Clifton and then expand it to the wider Bernard Lodge because one of the issues that the people in Clifton raised with me is that we have to do this because there are no options, there are no opportunities; that’s not how they said it but that’s what they meant. I mean I think there is a tacit acknowledgment that yes, this isn’t the right way, but this is the only way we have presented to us now. At some point in time, somebody has to say it has to stop and at some point in time somebody has to say well, we must be fair and that’s what we’re trying to do; that’s what the 70,000 houses is about. People say it’s an election promise, it’s a political ploy but the real issue is we are just not building enough houses in the diversity of solution to meet the demands of the population so that they don’t have to go and illegally create communities for themselves and it falls to agencies like the NHT and the HAJ and in partnership with the private sector to come up with solutions. That’s what it does, it falls to us because if we don’t rapidly expand the output of housing solutions, the pressure is going to build so I just wanted to make the connection to the board and executive management of the NHT with the pressures that I’m facing out there, that you are a part of the solution. I hope I’ve made that connection in your mind, that very important that your governance and management is such that you increase the pace of delivery of housing solutions.

Having kind of set that tone we have allocated just a little bit over 100 acres in the Bernard Lodge development. It’s shared between the NHT and the HAJ and that is to build affordable housing and I want to say low-income housing or –  it sounds a little bit discriminatory, but housing that would be easily accessible by the average Jamaican. We need to direct our resources to housing solutions that the average Jamaican can afford. Now, when I say average Jamaican, average means different things to different people.

In the community of Clifton, one lady pointed out to me that I can’t afford a $6.5 billion house, that’s too expensive because I was pointing out she asked what affordable meant, and the scheme that I pointed to was Catherine Estates just next door that we’re building houses in that region 6.5 to 7.5, so that’s too expensive.

Now, in the same conversation is someone who said my eight-bedroom house was just torn down or I have a house over there and it’s four bedrooms and carport and so forth. The juxtaposition of the two, it’s clear in the minds of the public listening, it is not that people don’t have resources, they just don’t have all the resources one time upfront. There is no market in the world where anybody has the resources one time upfront to just buy a house. A house is the kind of investment that has to be amortized, it’s a lifetime investment. You pay for it over your useful life, your working life so we need to get the average Jamaican to understand this but you know, in practice this is what they do, we build incrementally so the eight-bedroom, it’s every month I take something from here or I put aside a little bit or I lay a couple of blocks and you take your time. Now, if you could convert that thinking into seeing a mortgage in the same way, of course, the challenge is you need to pay your mortgage every month. It’s not every month you may have something.

So yes, there is some work that needs to be done in educating the public about converting from the incremental physical development to accepting a model of incrementally paying that is through your mortgage for your house. I think this is kind of a public education thing that I think the NHT is in a prime position to undertake that kind of dialogue. I am not against incremental development, I just feel that incremental development does not immediately yield the development benefits. It’s gonna take you 10 years sometimes to have the house complete, to get the sewer in but if we adopted, the formal model where the state comes in in addition to the private sector and we mobilize the resources which we have the fundamental institutions to do, the NHT is one of them, the mortgage market is another and we build out the continuities. You get your starter unit and the roads are in, the community is structured, immediately as you occupy you start to get the benefits of security, the benefits of orderly living, benefits of people feeling that they own and invest in something, and then you pay for that incrementally over time in your mortgage.

Now, it’s how do we get some of the residents who live in communities like Clifton for them to feel that, yes, I can be a part of the Jamaican society and economy that pays a mortgage. Now, I don’t know if we can be more flexible than we are presently in the mortgage systems that we have because since I’ve been the minister of housing and minister with responsibility for the NHT, I have put pressure on the NHT to be flexible and we have reduced interest rates. We have increased the options for people to get access to NHT funding but maybe we need to put our heads to it a little bit more to see how we can create a mortgage system that matches the income flow of persons in these communities, that’s part of the issue. And so that we can bring them into the formal system and make them feel like they’re not going to be locked off in the middle of somewhere with no service. I can’t give you the solution, but all the minds in here I’m sure can have a good go at it.

Now, as we look towards greater solutions for housing solutions, one of the things that is an obstacle is the cost of the proprietary infrastructure so a community like Clifton, if the NHT were to take it on, then you would have to go and put in water, sewer, you would have to widen the roads and pave them, put in social infrastructure; that’s a huge cost and if we’re building a community from scratch, we would have to do the same thing.

Now, let’s take the model of building the community from scratch. So that hundred acres that we have allocated in Bernard Lodge, you would have to pay the impact fee and that impact fee would get tallied up into the cost of the house so even before any lot is divided in there, even before a lateral is run from the main into the scheme, anyone who’s going to buy that property has that cost to repay. So you have to pay for the cost of the land, but you also have to pay for that preliminary cost of making the land developable.

Now, I think there could be a case if we are going to designate housing for a certain income level. There could be a case, and we have started on this pathway when we have said that our subsidies are going to be tied to your income level. So if the government is going to consider taking on, in other words, absorbing into the national budget, the development of infrastructure that is going to be sold privately, meaning that the person who buys it is a private person and will enjoy the private benefit, then whom should we give this benefit to?

In other words, who should benefit from the total reduction or partial reduction in the cost of the proprietary infrastructure? Should it be someone who can afford to pay, or someone who really can’t afford to pay? Now, this is a conversation that gets lost in the political debate about whether we’re taking away benefits from one person when what we’re really trying to do is to restructure the benefit so at the end of the day it is fairer but the politics sometimes it is just so narrow, there’s not much deep thinking. Let me not say that, deep thinking goes on, but people for political purposes try to obfuscate the effect and benefit of policy.

So this board took a decision supported by me as the minister that we are going to move to income-based subsidies. It was unfortunately released in such a way as if somehow the prime minister in conspiracy with some members of the NHT was trying to take away benefits from the people of Jamaica and it was quite unfortunate. And as public servants who are in possession of government policy information, it ought to be treated with care and respect and not used for your own personal political motives or benefit. You have a duty as a public servant to treat carefully with government information and I have to speak very frankly on it, and I hope that the necessary action was taken in regard to how this matter was treated with.

Government must come to the people and explain policy, but it can’t be that somehow before we even get a chance, policy is taken out of context and placed in the public domain without proper explanation. I maintain it is most inappropriate. Having said that, we are well established in moving forward with our income-based subsidy strategy, and it’s going to be applied as we go along so, with these 100 acres that is being assigned, the government will pay the impact fee that comes within the land, and we will not pass that cost on so the price of the house should come down so the residents who were affected in the adjoining area to Clifton who said where are we going to go, well, we’re looking at options where we can make the cost of the housing lower by virtue of government making a budgetary allocation to absorb these preliminary development costs so that the cost of the final product to you is lower, but you would only be able to access this by virtue of your income.

Now, this is nothing new. Already we give you an interest rate benefit by virtue of your income. Yeah, we do that now so if you’re in a certain income bracket, you get a smaller reduction. If you’re in a lower income bracket, you get a larger reduction in the interest rates, nothing new. So we will craft the policy in such a way that the people who really need it are the people who should benefit and I wish that I did not have to go through three or four weeks of taking on a political debate, distracting and having to go and write a release, and prepare article when I could do other things to take on a political debate over something that was really very straightforward.

So, that is one solution that we will approach. I’m going to ask the NHT to place this 100 acres in Bernard Lodge on a fast track. I will get the Minister of Finance, I don’t usually do this, but we will have the discussion about getting the resources in place for that 100 acres to be developed in partnership with the HAJ to pay that impact fee to get that project going. If the land is there, it’s ready, at least three other developers have started in the area. I would want us to move very quickly so that we can provide housing solutions that will be affordable to the average Jamaican. We have seen houses being developed inside that area, existing developments in Phoenix Park and other areas and the communities are quite nice and people have a great quality of life there, they’re quite happy and I want every Jamaican to have access to that so let’s move very quickly on that. So, of the 70,000 houses, we committed to at least 15,000 will be in Bernard Lodge when it is fully built out. Three developers have started work, and we expect that with those three developments, we should have about 6,000 houses. So, we are well on our way when we talk about building these houses.

Now, I must make a point of clarification. We made the commitment for 70,000 houses during the 2020 campaign. The opposition had made some commitment to 150,000 to my recollection. I admire the ambition, but we too wanted to say, but when we looked at the anchoring considerations which you struggle with every day because I know you’re quietly murmuring. Why I put so much pressure on the NHT with all that you have to do, I know you’re under pressure but I know you can do it so I didn’t set it too high, but I set it high enough that you have to stretch. So I know to do it is a stretch and I have to say it publicly, it’s not easy to build 70,000 houses.

It is not that there is no demand for the houses in Jamaica, the truth is that the demand is probably in the region of about 150,000, but there is a supply-side issue, meaning that we don’t have enough contractors that have the experience to build on enterprise scale that we need, and the banking system and financing system though very well developed would not be able to fund that many houses in the period of time designated and then we have issues with the land because people in Jamaica would say look how much land out here and you have land all over but there are so many unresolved legacy issues with land that sometimes it will take you five years to get the land to a point where you can develop.

When titles are not resolved, when it is not, people are occupying the land illegally. When you think you have the land and you go on it, you realize that it has problems with flooding and environmental issues. I know of one housing development now, NHT knows about it very well that it’s a lovely piece of land but when you have to put in the infrastructure to take off water and drainage, it’s just not worth it so there are supply side issues with building this out but it’s still an ambitious project and what I’m literally forcing the NHT to do is to treat with these supply-side issues.

So, in everything that you’re doing, consider it. You have found a way to get the financing in creatively so you’re solving that issue of supply side. You are getting contractors coming in through the GPP programme. You are finding the lands because you have to go out there and search for them and see what is good so we are slowly overcoming the supplier side issues, however, since the declaration, you would know that we spent another year in the pandemic, well two more years in the pandemic which really slowed down the progress towards resolving supply side issues but then the supply-side issues were exacerbated.

The price of steel went up 300%, lumbar went up almost 200% and then the war in Ukraine, all of those had an impact. We started out saying that our target for average affordability would be about 8 million or less, and we have to recast those numbers now based upon the price of steel, the price of lumber and you know the marginal increases that have happened in cement so all of those have had an impact on the plan towards building the 70,000 houses. We had said we want to build the 70,000 houses within five years from 2020 to 2025 but with the interruption in COVID and having looked at some of your reports, I suspect you might be about a year and a half to two years delayed on some projects, not all, on some but nevertheless what I would want to see the NHT  continue to work as hard as you can on is to make sure that the projects that you have identified, because you do have a register of projects that account for 43,000 houses.

I’ve seen the register, and I’m satisfied, that you must resolve the land issues that are unresolved. You must get the infrastructure issues that are required resolved and the government is saying that we will sit with you, especially if these are projects targeted for affordable housing, and we will see if we can make a budgetary allocation to deal with the infrastructure issues to make the land developable because what the public may not understand is that you will see the vast acreages, but to build a community on it, you have to first carry the water to it. You have to figure out the sewerage treatment and disposal. You have to figure out the roadway and the traffic management, all of those issues, and those are costly. So let’s get those things solved so that the land is actually developable. Whatever contractual issues that you have in terms of identifying who the contractors are, let’s solve those upfront so that when you start to build it’s just rolling according to a template. And I think by and large, from what I have seen is that you will have a large number of your projects at that phase where you are ready to bid, but you are just waiting for financing and completing the contracting. But what I’m saying now is get all the projects that you have, bring it forward, get them up to that stage and then after that you can work out issues with contractor and financing, but at least ensure that the lands that you have identified are developable.

Now, I want to close my presentation because I figure I’m losing your attention by saying that the NHT does great work. You have traditionally done great work. The NHT is seen as the more efficient public sector organization but I’ve always maintained that the NHT has not been the most effective public sector organization so I think you’re efficient, but you’re not effective. I mean, efficiency speaks to delivery on task, but effectiveness is you delivering on the right task; are you doing the thing you should be doing and that is why we went through this process of commissioning a review and I think that the review was an eyeopener for both the management and the governance board as to what you need to be doing which is why so many changes have happened into how the NHT is operating which is why you’re now in a good position to take on this massive 70,000 housing solutions challenge.

The NHT has committed to 43,000 housing solutions. You have a register of those solutions. You have identified lands and projects and so forth but as I was saying, let’s make all of them developable and the government will work with you in terms of budgetary allocations for those lands that we can target for affordable housing so that when they are built, their prices are lower and they can be made available on an income basis level; that’s what I’m saying. But the NHT does great work and is an organization of which we should all be proud but the problem I’m discovering with NHT is that there is an entire generation that has no clue about what the NHT is doing and therefore there is a high level of scepticism about the NHT and its work.

In 2018, I asked the NHT to undertake a programme of refurbishing and developing and repairing housing schemes that were built 30 years or older, I believe that was the direction. I grew up in one such housing scheme, so I know what it is to live in an NHT housing scheme and not all the schemes have benefited from the advance in development thinking. So there were some schemes that were built without proper drainage, without proper sewage, without proper green areas and then being built 30 years or older, many of the houses are approaching their useful life and need retrofitting in many areas and the NHT is taking on this project right across Jamaica. There are many schemes, I’ve toured a few of them where you have repaired roads, repaired sewerage plants, you have repainted them, fixed their roofs and really made an improvement to the physical infrastructure but nobody knows.

We didn’t use it as a political campaign too because we don’t want to politicize the work of the NHT, but I think the NHT needs to improve its own PR so that people understand that you’re not just sitting on- because that’s the view they have, you’re sitting on this ton of contributors’ money and not doing anything valuable with it so I think you need to explain to people what your mandate is and what you’re doing and it’s a fantastic project. People who live in those schemes that have benefited would be your greatest ambassadors that you should leverage and I think the NHT needs to do a little bit more work in explaining to people the benefits, and your benefit scheme.

I tried to do it. I’m not the best person to do it because it is always going to be viewed as “he’s promoting his government” but it is important that the facts of the situation in terms of your interest policy, in terms of your co-making policy, in terms of your build on own land, all the policies, your intergenerational mortgage, all of those things need to be properly explained to the public so that we are less at risk to persons who have internal ulterior motives to maintain old benefit structures that when they go out to create an obfuscate and make mischief, it can’t stand because you already own the factual space; you have to do more public education.

I think I have given you a full dose of my thoughts and I hope it was medicine to your mind, and so thank you very much for listening.