So we have no doubt that the many Jamaicans who fall in the 80 per cent of National Housing Trust (NHT) contributors who, by the agency's own market survey, cannot afford the $3.5-million maximum benefit per contributor, will have a serious problem with making contributions.
And even as house prices are reined in by the global economic crisis, certainly anything less than the maximum NHT benefit - and two persons, at that - will not be able to purchase a home that is at the desired size or standard.
Receding ambitions
In the circumstance, we daresay the few who voluntarily make NHT contributions and the majority PAYE contributors, who have no choice in the matter, would harbour thoughts of having their cash in hand rather than holding on to receding ambitions of home ownership, financed by the trust or anyone else.
It is against this backdrop that the NHT plans to roll out 4,800 solution this year. Even if these units are in the price range of the trust's maximum loans, we can safely assume that they will largely be beyond what is affordable by the majority of its contributors.
Important point
Many who make NHT contributions but are unable to afford a house on the open market or in one of the trust's developments are likely to question the purpose of their contribution in the first place. They might even suggest the winding-up of the trust. That, we submit, would be the worst of the possibilities.
There is an important point to acknowledge here: NHT loans are between two and six per cent, based on the contributors' income. Those rates are substantially below what exist elsewhere in the mortgage market. Indeed, it is the mix of NHT and private financing, producing a lower average interest rate, that often makes home ownership affordable to people who would otherwise be outside the housing market.
Indeed, what the NHT has shown itself to be is an efficient gatherer of capital that has caused a fair amount of social good. But the agency's own survey findings suggest that there is need for a hard look at its operations, going forward, to determine how best it can fulfil its mandate. This may mean that the NHT may not, in future, operate as we know it today.
But in the final analysis, the finding of the NHT's survey is less about the agency itself than it is about the failure of broad economic policy in Jamaica. It is our failure to deliver sustained economic growth and to control inflation why the vast majority of Jamaicans can not afford the highly subsidised loans offered by the trust. It is a case of the good being overwhelmed by the mediocre and poor.
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