How to Provide Affordable Housing in the Caribbean

Authors: Michael G. Donovan and Pauline McHardy

As Caribbean countries urbanize, the lack of affordable housing has surfaced as a serious development challenge. Housing needs estimates of these countries indicate a large mismatch between housing demand and housing supply, in particular with regard to the supply of low and moderate-income units. The absence of efficiently functioning land markets has compounded the problem and led to the expansion of informal housing. This has left approximately ten million people in The Bahamas, Barbados, Cuba, Dominican Republic, Guyana, Haiti, Jamaica, St. Lucia, Suriname, and Trinidad and Tobago without a decent roof over their heads.

Caribbean Governments, however, have been actively pursuing solutions to their housing problems. A recent study by the Inter-American Development Bank (IDB), The State of Social Housing in Six Caribbean Countries, examines successful efforts to build affordable housing across the region. Governments in the region have embarked on programs to expand social housing, lower mortgage lending costs and promote disaster-resistant buildings.

The book, for example, profiles housing initiatives in Guyana after the Government pledged to “provide greater access to affordable funding for housing development….eliminate institutional delays in approval of building plans and allocation of land….[and] regularise informal housing development” in its National Development Strategy (2001-2010). The Government of Guyana responded to its settlement problems through public land divestiture and neighborhood upgrading. These initiatives were supported by the IDB funded Low Income Settlement Programmes (LIS) 1 and 2 which were direct demand subsidy programmes providing upfront grants to households. Considerable progress has been made as close to 19,000 house lots were serviced and nearly 13,000 new houses were constructed in 10 new settlements. The Government of Guyana also explicitly endorsed the concept of incremental housing, which allowed them to effectively partner with community-based organizations in the construction of low-cost housing with basic infrastructure, including a septic tank, toilet, shower, multi-purpose sink, flooring, and wiring featured in the designs below. This has eased the pressure on the housing market that had been caused by an institutional land shortage in Guyana.

The Governments of Barbados, Jamaica, Trinidad and Tobago have also delivered serviced sites, core units and starter homes to provide housing solutions to the poorest. These countries have sought joint venture partnerships with the private sector in order to share the risks and bring additional resources for the provision of affordable housing solutions. Despite this progress it is still difficult for countries in the region to meet their housing needs. Economic growth has faltered, per capita incomes have fallen and poverty is on the rise. By looking at what has worked and the gaps that remain, an affordable housing action plan for the Caribbean would contain at least three elements:

First, we need new alliances between financial institutions, housing ministries, and construction firms. A first generation of partnerships created many successful options for the middle class but failed to find solutions for lower income residents. Government alone cannot fill the gap. To incubate new low-cost housing developers, governments need to design attractive packages that reduce the costs of acquiring land and support the development of durable low-cost building materials. Although most private developers still focus on the upper end of the housing market, a growing number of affordable housing developers have emerged, together with supportive financial institutions. According to UN-Habitat, 30 percent of microfinance institutions in LAC today offer housing microfinance loans. The development of new rent-to-own schemes in Barbados and Trinidad & Tobago also illustrates the sort of innovative approaches that are needed.

Second, if we are truly to leave no one behind, we need a new social contract with informal settlements in Caribbean cities. Neighborhood upgrading projects could revitalize the region’s shanty towns and squatter settlements, through new housing, public spaces, infrastructure, and schools. But these programs will only succeed if they are done in close collaboration with residents and community-based organizations. Governments already acknowledge that low-income families build and renovate their homes at a massive scale in the region. Suriname leveraged this expertise by providing discounted building materials to certified community-based organizations trained in housing construction. This led to the repair and expansion of thousands of homes. Jamaica too is driving down costs using this model, providing free design services that allow social housing residents to both expand their homes and comply with building codes.

Lastly, we must call on governments at all levels to establish and enforce housing policies with explicit targets for affordable housing. Elevating housing policy as a national development priority would revitalize distressed neighborhoods and limit sprawl. Last year, United Nations member states committed to “ensure access for all to adequate, safe and affordable housing” by 2030, as spelled out in the landmark Sustainable Development Goals (SDGs). This is fundamental as Caribbean residents flock to cities in decades to come.

As the Caribbean urbanises, it will be critically important to ensure that social housing is built in suitable locations that lessen rather than exacerbate vulnerability to natural hazards and climate change. Already Caribbean countries have begun to incorporate risk reduction into the location and design of social housing. As described in the IDB’s A Blue Urban Agenda: Adapting to Climate Change in the Coastal Cities of Caribbean and Pacific Small Island Developing States, new tools are available to “climate-proof” social housing using structural retrofitting. Caribbean housing planners have pioneered innovative roof designs that ensure adequate resistance during high winds and the use of stilts (pilings) to prevent flooding. Additional work is needed to increase the resilience of affordable housing, particularly in coastal areas and low-lying river basins. Design work must also be coupled with strong enforcement capacity in city planning agencies to ensure compliance with building codes for hurricane and flood-resistant housing.

The need for transformative action on this front in the Caribbean is clear and conditions are ripe. It is up to all leaders in government, business, and civil society to galvanize housing and radically improve quality of life in the region.

* The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. 

This blog is a part of the August 2017 series on Affordable Housing in partnership with Business Call to Action.

Read the full series for more innovative inclusive business models, lessons learnt by practitioners, and the unique challenges of understanding and measuring impact in the housing sector.

About the authors: Michael G. Donovan is a Senior Housing & Urban Development Specialist at the Inter-American Development Bank where he oversees several of the IDB’s low-income housing and neighborhood upgrading projects.  Pauline McHardy is an independent urban planner based in Kingston, Jamaica.