The Story within the Story…Housing: An economy boost if we get it right

Jun 04, 2017 News

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By Leonard Gildarie

This week, I return to a favorite topic of mine – housing.

I don’t know much how to mix cement or cut a tile at a particular angle. But I do have a fair idea whether the work has been done well and whether the carpenter has shafted us.
I have learnt so much from the lessons taught while building my home that I do believe that it will be a difficult task for any of them to try a fast one on me again.
The conclusions are there. Our housing drive has ground almost to a halt, and that is because of a number of reasons.
I would say that late 2000s and even up to 2013, the sector was in its full glory. If handled right, it is a money spinner for the economy. Of course, it benefits the homeowner who has been dreaming of his own “gates”. It makes that homeowner an instant millionaire, as that property represents assets that could be used to borrow at the banks.
The housing sector undoubtedly has significantly boosted the earnings of the banks, insurance companies and hardware suppliers.
In addition to the thousands who were employed as labourers, truck drivers, at the shipping companies, the High Court, in forestry (sawmills and logging companies), all received a piece of the pie because of the spin-offs.
The banks are now reporting smaller profits and a significant number of non-performing loans and mortgages. Even the insurance companies are joining the fray in complaining of how business is bad.
So what went wrong?
The slide had started prior to 2015 when a new government took office.
A visit to many of the housing schemes would have found inactivity on many house lots.
These included some on the East Bank Demerara that had been sold to private developers.
Many of these developers appeared to have been speculating and, from all indications, were too ambitious on some of the prices set for the homes. I wondered how they qualified for those lands in the first place.
Very few persons in Guyana would buy a turn-key home for over $30M. They prefer to build it themselves.
It seemed that many of the construction ventures were financed from illegal proceeds – drug trade and money laundering. With increased monitoring now, and with the presence of the DEA here, the floodgates are being closed.
Some of those lands to private developers up to today remain unused. We are not even sure who the developers are. I would have aimed much lower. There is a huge demand for low cost housing.
It appears that despite the threat to ensure compliance by the developers, CH&PA is highly reluctant to take back these unused lands. I can’t see the reason why.
In the meantime, the CH&PA is finding itself in a bind to find new lands for housing in the high-demand East Demerara area. Unless more canelands are converted into house lots – and there are more on the East Coast Demerara area – we may very well have to move further up the East Bank. The Soesdyke/Linden highway has been touted as one possibility.
I was up in the Kilcoy/Chesney area, East Berbice, recently, and what was found there was reflective of what is transpiring in almost all the newer housing schemes.
The absence of power and water has a direct correlation to the timely construction. In other words, people are highly reluctant to start building without these basic necessities. There were wide open spaces.
I know of La Parfaite Harmony, West Demerara, one of the largest housing areas in the country, which has been established for several years now, but is without landlines.
The administration has made it clear it wants to build complete communities and not just offer incomplete schemes without the necessary roads, bridges, utilities and other things in place.
I applaud this. However, I am fearful of a few things.
We are given a timeline of two years to complete seven hundred housing units with $5B plugged into this initiative.
In addition to that, Government has announced another US$30M ($6B) being diverted from the Sheriff Street/Mandela Avenue road improvement project to help fund some of the housing programmes.
The big question is when and how are we going to tackle the 20,000 applications on file?
The plan of Government to create complete communities before sending new homeowners in, is commendable. But from the little information that is coming out, it will be by no means cheap.
We are badly short of resources. In Diamond, many of the roads are falling part, because there are little resources to divert for the maintenance. We will have to learn to balance.
So we come to the recent housing expo at Perseverance, behind Providence, East Bank Demerara. I visited before the opening and I must admit I was impressed. There were different styles and the use of local materials is what is needed.
It is clear from the crowds that a new home remains one of the biggest wishes for Guyanese.
The crowds at the CH&PA’s Brickdam office this past week is but testimony of this.
The loggers, the Guyana Forestry Commission, the sawmillers and other stakeholders, will have to sit at the table and figure out ways to make good quality, cheap lumber available. We have what it takes. We have the wood in our forests. There are lesser used species that are cheaper and maybe better to use.
With our economy not doing so well, and a distinct loss of confidence, giving the housing sector a boost can only redound to the benefit of the entire country.

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