Let's build a house! No! Wait! We have to make that thousands of houses. Tens of thousands of houses.

As far back as 1963, the minister of welfare and development in presenting the Five-Year Independence Plan, 1963-1968, stated the "fact" that there was "need for 165,000 (housing) units over the next decade to satisfy the demands for new houses". And "as far as the demand for 165,000 units goes, they are in the low-income sector". Nonetheless, "Government's target in this sector is to produce 3,000 low-income houses per annum".

Kept up over 10 years, that would be 30,000 units, a mere 18 per cent of the estimated demand. In 1963, the population was around 1.8 million, two-thirds of today's 2.7 million. Even that low target of 3,000 houses per annum in our first five-year development plan in Independence was never achieved.

It was, therefore, past pathetic to read that the 33-year-old National Housing Trust (NHT) is about to place all of 176 homes on the market, most of them reserved for public-sector workers, as the first phase of a 767-unit development.

The NHT was created by the Michael Manley government in 1976 to provide "housing solutions" in a housing revolution. There are at least 100,000 public-sector workers, including the women who clean the offices of Horace Chang, the minister of housing, and Bruce Golding Golding, prime minister, and serve on their administrative support staff, who cannot qualify for mortgages from the trust.

open market

While 80 per cent of NHT contributors cannot even afford solo to pay mortgages at a $3.5 million value, "low-income housing has been growing more expensive - starting at about $7 million on the open market". This is twice the unaffordable $3.5 million the Financial Gleaner lead story of April 17 tells us.

The cost of housing has to bear some relationship to salary if housing is to be affordable. We owe a debt of gratitude to Carlton Cunningham, a housing developer, for setting out for all to see the expanding disjunction between salaries and the cost of houses in his May 31 contribution to The Sunday Gleaner, 'Housing supply, affordability and squatting'.

"The lowest-paid worker, the sugar worker, could in 1977," Cunningham calculates, "afford a completely built two-bedroom costing $12,500 on a single wage of $2,500 per annum, utilising a graduated payment mortgage (GPM) which established a wage-to-mortgage ratio of 1:5. The graduation meant that workers paid a constant percentage of income, 25-30 per cent, for the life of the mortgage. This is precisely what the international experts advise should be the upper limit for percentage of income spent on housing, whether rental or mortgage."

It now requires eight minimum wages, Cunningham advises, to afford a two-bedroom, 'low-income' house.

If Cunningham didn't depress hopeless potential home buyers sufficiently, business reporter Avia Collinder completed the task in the same issue of The Sunday Gleaner. A 30-year-old buying a $5 million house, which, as we are seeing hardly exists on the market, through a particular building society offering a 70 per cent mortgage at 17 per cent interest, will have to pay $50,350 per month for 25 years on the $3.5 million borrowed, and must be earning a minimum qualifying salary of $130,000 before tax and "no other significant obligations", like motor-vehicle loan or education loan. The mortgage is about 50 per cent of post-income tax salary, not taking into account the other statutory deductions, including that of the NHT. And at a steady rate for 25 years, the buyer will have paid out $15.1 million, three times the starting value of the house and 4.3 times the value of the $3.5 million loan.

huge disincentive

Another thing which the price of houses must be sensibly related to is the cost of rental. The disjunction is massive. There is no way on Earth that the mortgagor/mortgagee paying $50,350 per month can get that from renting the house. There is a huge disincentive then for people to build houses with credit to offer for rental as a business, as prevails in places with normal real-estate markets. Investors in houses for rent here can't recover costs, much more to make a profit. Properties for affordable rental are, therefore, mostly older debt-free stock, of which there is not enough.

The distortions in the real-estate market are neither inevitable nor unfixable. The Government says it is seeking "squatting solutions". Let's begin by constructing one house and taking it to market. Let's launch a housing revolution! Similar distortions in the car market have been eliminated.

A responsible government cannot continue to abandon 900,000 squatters and 80 per cent of NHT contributors to the untender mercies of a skewed and screwing real-estate market. The housing mess in Jamaica is simply not replicated in many other countries of similar standing.

Government - the Crown - owns X per cent of the land in Jamaica and should flood the market with v-e-r-y affordable service lots. And even more of these could come to market if the State appropriated abandoned lands.

Government should eliminate or drastically reduce all real-estate fees and make up the revenue shortfall from the stimulated boom in construction from GCT on raw material, and income tax on labour. Government should break the stranglehold that high technical-services fees have on the building sector by using public information to drive competitive pricing. Government should stop refunding NHT money and use every available dollar to pump housing solutions into the market at reduced prices.

A sensible Government will understand that a massive expansion of home ownership is not merely a social-welfare good, as important as that is. Pushing for affordable housing will generate a massive boom in the construction industry in economic hard times, and pump revenue into the public treasury from activities in this important economic index sector. It will open up a safety valve. And home ownership is a key catalyst for stimulating entrepreneurial activity with the house as collateral, as Minister Samuda very well knows.

There will be numerous reasons offered why more affordable hou-sing is not possible. Most of these will come from private-industry players with their various vested self-interests, which they are 'organised' to protect.

There are many reasons why more affordable housing must be made possible.

It's time to launch a real housing revolution! Minister Chang?

Martin Henry is a communications consultant. Feedback may be sent to medhen@gmail.com or columns@gleanerjm.com.