INVESTMENT IN HOUSING

The decision of a consortium of four Trinidad and Tobago banks, headed by Republic Finance and Merchant Bank Limited, to provide more than $2.4 billion in funding for Government’s housing programme over the next two years is a thumbs up sign for the State housing initiative. The banks involved with Republic in the provision of loan funding for the programme are RBTT, Scotiabank and the State owned First Citizens Bank. The involvement of the banks in the programme, which has had to be adjusted downward from an ambitious target of 10,000 housing units a year to 5,000 for 2004 and 6,000 in 2005, will be a principal factor both in Government’s realising its plan of increased home ownership and additional growth in the construction sector.

The trickle down benefits of this growth will be spread over a wide area and will embrace increased employment opportunities for welders, plumbers, masons, carpenters, painters, contractors, electricians, vendors and persons involved in the transport industry. Other beneficiaries will include the cement industry, concrete and general contractors and downstream steel industries. Its positive impact on the economy will be all that greater particularly at a period when the negatives of globalisation, along with restrictions on the entry of Trinidad and Tobago goods and services to the United States will provoke a fall off in jobs in several areas of the economy.

Government’s programme should not be measured merely in terms of the increased availability of housing to middle and lower income groups, as crucial as this is, but the turning around of money within the economy, the creation of jobs and the creation of additional opportunities for service and other industries. Housing Minister, Dr Keith Rowley, has pointed out that although the initial involvement of the financial houses will be for 2004 and 2005 there was a commitment to extend the mortgage financing to 2006 should the National Housing Authority request it. Under the arrangement funding will be available for the construction and purchase of homes built under Government’s housing programme.

The cost of the construction of housing units has been hit by the recent sharp rise in the cost of steel triggered by the sharp demand for steel in China as well as Iraq. And although the Housing Minister has spoken of difficulty being experienced with the “pace of the approvals,” not only bureaucratic red tape but the pushing up of construction costs by the rise in international steel prices may have caused the programme to stumble on the road to 10,000 housing units a year. Meanwhile, although it would be naive to dismiss the understandable returns that the financial houses will be making through their funding involvement in Government’s housing thrust, nonetheless they must be given credit for coming in as partners in the Administration’s long term plan of affordable housing for all.