Kerr-Jarrett proposes three-step approach to housing

Sunday, October 22, 2017

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St James-based businessman Mark Kerr-Jarrett has suggested a three-prong approach to providing affordable housing to Jamaicans, including the reduction of general consumption tax (GCT) on building material.

In a letter to the editor yesterday, in response to an article carried in the Observer on Saturday, Kerr-Jarrett, the strength behind Barnett Ltd in St James, said that there needed to be a look at how the cost of housing can be reduced in order to facilitate finding what he termed more “creative housing finance products and put the product in a price range of those in our society that most need it”.

Kerr-Jarrett said that by cutting out GCT on all building materials and services for affordable income housing projects, construction project areas could be treated like Special Economic Zones.

He also suggested that the Government could eliminate certain forms of taxation relative to the construction sector, in particular to “significantly reduce if not eliminate the stamp duty and transfer tax on all affordable housing title transactions”.

Kerr-Jarrett also said that the water component, which is so critical to the construction industry, must be looked at in more serious terms, with a view to positioning the National Water Commission (NWC) to improve its efficiency.

He suggested that the Government “properly capitalise the NWC so that they can install and provide the necessary sewer and water connections to land developers' property boundaries, and if that is not possible, contribute significantly (minimum of 75 per cent) to the onsite treatment systems.

“Currently, if immediate connections are not available, the developer is required to install at their cost the necessary connections to NWC existing infrastructure and then turn it over to the NWC free of cost. This is then passed on to the purchaser in the purchase price. If no connections are available then the developer must install an on-site treatment system and the cost of this is then passed on to the purchaser in the purchase price. The NWC then makes lifelong revenues from that infrastructure through water and sewage fees, so why shouldn't they pay for the infrastructure in the first place?” Kerr-Jarrett said.

The entrepreneur said that dialogue between key stakeholders was a necessity.

“Further price reduction options are available, and that is best realised by the Government meeting with the land developers and thoroughly examining the line item costs and seeing where the reductions can be facilitated,” he said.

Prime Minister Andrew Holness told a Regional Housing Conference in St James last Wednesday that there is a growing demand for mortgage providers to adjust financial packages aimed at satisfying the needs of future homeowners.

“I believe that housing financing is an opportunity for disruption. There is room for greater innovation in diversifying and structuring the portfolio of housing finance products to meet the needs of the different groups of prospective homeowners.

“Access to safe and affordable housing is the cornerstone of a growing society. We can never truly speak of progress and prosperity without a focused approach to solving our country's housing needs,” Holness said.




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