Page | 1 Guyana Conference: Aspirations for Real Change-2016 and Beyond In Celebration of Guyana’s 50th Anniversary Session 3 The Role of the Diaspora – A Framework for Collaboration HOW CAN THE DIASPORA CONTRIBUTE TO AFFORDABLE GREEN HOUSING IN GUYANA? ROHAN LACHMAN 8725 167 STREET, JAMAICA, NY 11432 Page | 2 [email protected] AFFORDABLE GREEN HOUSING INDEX ABSTRACT: ISSUES OF AFFORDABLE GREEN HOUSING BACKGROUND INFORMATION FINANCE: OBSTACLES & SOLUTIONS LAND DISTRIBUTION: REGULARIZATION INTERNET/ DATABASE/ PUBLIC-PRIVATE PARTNERSHIP BUILDING SYSTEMS FOR AFFORDABLE HOUSING: CURRENT NEED CONSTRUCTION MATERIAL HOUSING CONSTRUCTION OPPORTUNITIES RECOMMENDATIONS INDICATORS FOR REAL CHANGE BIBLIOGRAPHY Page | 3 ABSTRACT This paper addresses the issues of affordable housing in Guyana and advocates an effective role for the Guyanese Diaspora. Over the last century, housing for the masses included chattel, lodgies, mudhuts, truli to wood, concrete and zinc. In post slavery and indentureship working families used their income to construct their homes without the assistance of Government. There was a boom in housing until mid 1960’s. New housing stock was not developed. One of the major factors that explain this reality is mass migration. As the wealth of individuals and the society increases, there is a drastic need for central planning, land allocation, development of infrastructure and utilities. The availability of data to monitor and measure progress of these changes continues to be a major concern and needs intellectual inputs, technology and financial resources. Policies are conceivable and can be implemented to effectively address the need for affordable green housing in Guyana with a clearly defined role for the diaspora Page | 4 BACKGROUND INFORMATION Jobs, shelter, and security persist as a challenge for Guyanese. Poverty remains a basic socioeconomic and political stranglehold on the poor in these societies. Although the International Monetary Fund (IMF) Gini coefficient showed an alleviation of poverty from 1992 to 2006 for Guyana, there is no data on the wealth distribution across the population. Gini coefficient of zero expresses perfect equality, where all values are the saMe (for exaMple, where everyone has the saMe incoMe). A Gini coefficient of one (or 100%) expresses MaxiMal inequality*. In 1996, United Nations (UN) Conference on Human Shelter, estimated the housing stock to be 151,679 for population of 718,405. In 2015, the population reached 767,000 (IMF) with limited housing stock being developed except for the upper income, business class and ministers. Low and moderate-income citizens and squatters, were allocated approximately 30,000 houselots, however, these have no infrastructure such as roads, water, electricity, sewage or drainage, allowing limited or no development of stock. The current transportation infrastructure (roads and bridges) is being developed and making habitable land more accessible, however, the need for localized infrastructure still needs to be addressed. The drainage and sea defense system was established by the Dutch since 18th Century and has remained the same except for agricultural projects in the rural areas. Since Independence, the main cities, and rural towns, drainage have collapsed from poor maintenance and increasing population. The sea defense is crumbling from rising sea levels and no maintenance. Electrification is developed on an ad hoc basis, with no national strategy, with energy cost per capita exceeding more developed countries. The need for decent housing in any society is a paramount in the development of the people and the creation of personal wealth and national growth. The Government still remains the major land owner in Guyana, from the time of the Dutch and British plantations. Once the land usage is regularized to allow redistribution and development, the other pieces of habitability must follow in lockstep for the transformation from land to habitat. Guyana is resource rich, a country that can be ready to be developed with courageous and honest management and provide the people with high standards of sustainable livelihood. We must marshal our resources to eradicate and provide affordable housing. We can reverse brain drain to brain gain. Page | 5 *Dr Clive Thomas, Inequality Results, Stabroek News, 2014 FINANCIAL OBSTACLES Guyana’s financing system is based on cash not financed or leveraged equity or monetizing of future value. As such most of the property ownership in the country is based on 100 % homeowner equity, with limited financial input from financial institutions or the Government. The New Building Society Limited (NBS) was incorporated in 1940 via a bill known as Chapter 36:21 of the Laws of Guyana and in the process took over the assets of its forerunner the British Guiana Building Society. A mortgage in Guyana is a consumer loan used for the building of a residential property. NBS has provided mortgage and savings products in Guyana since its incorporation in 1940, however its coverage and reach has been limited and does not allow for any investments in development as infrastructure i.e. land development, roads, water electrification, communications as such these reserves and profits are invested in overseas financial products. The Banks in Guyana have evolved in their monetary consideration as globalization is introducing technology and sophistication in the utilizing cash beyond the passbook savings account. There needs to be a modification of the banking regulatory requirements to allow for investments in all aspects of habitability to allow for the growth of housing across the population. FINANCIAL SOLUTIONS The UNRF, CIDA and British Geological Society, et al, have been documenting the resources of Guyana for close to century and have excellent economic analytics of our resource value. This represents the “soverign trust” that is the bread basket of Guyana over this century. Guyana is at the inception of oil that is projected to be the foundation of its economic base. A sovereign wealth fund is in process to manage the proceeds from production. This type of fund will be of major socioeconomic and fiscal importance. Starting a fund is one thing; structuring it well and managing it wisely is something else. Kuwait Investment Authority is the first oil revenue based fund created in 1953 and is one of the largest funds that is financing the development and infrastructure of Kuwait and its investments in the international market. Guyana is being advised by the Canadians on setting up the fund. Canada has several of these and will provide a good protocol for management. There must include set asides for subsidy or financing of affordable mortgages to grow the stock of housing in the country (that has an average constructed age of seventy years). Guyana legal framework requires that roads, water and electricity be provided for homesteading. There has been land allocation, without utilities, substandard development and squatting form the low income and middle income housing stock. Alleviation of this crisis must be an objective of this fund. Guyana needs two institutions: banks to fund and manage the requirements of housing development for mortgages and one for infrastructure development. Infrastructure still remains the prevue of the Government and mortgages, a liability to the homeowner. GUYANA CO-OPERATIVE MORTGAGE FINANCE BANK which supplied “mortgages” was closed Page | 6 in or about 2000. The revival and funding of this type of commercial enterprise, supplying modern mortgages and other financial instruments that are real property based, will encourage future green housing development. With financing and subsidy from the Sovreign Fund, mortgages can be supplied to low income population on a subsided basis. In the 1960’s, Venezuela, created a low income subsidized housing program, that was initially funded through similar mechanisms and continues to do so today, although, in the last ten years with a degraded economy, there has not been much progress. This model will be a useful protocol for use in Guyana. Water, Electricity and transportation have become the major hindrances to moving the country from the coastal plains to the hinterlands. This will be an impetus as climate change is affecting the global environment including Georgetown and the coastal rural areas. The need for roads, bridges, trains and ferries, has been the limiting factor in effecting economic development of hinterland and coastal resources for local and export markets. As in most countries, infrastructure is developed and funded thru Development Banks from International Organizations and funding from the Central Bank funded with sale of government bonds and securities. GREEN AFFORDABLE HOUSING Green construction must be an integral part of the new stock of housing to be built. Existing stock can be retrofitted to become green. Guyana location is ideal for the use of solar panels for electricity for home lighting, hot water cooking and street lights. Pre-colonial construction were more eco-friendly designs that allowed for natural air cooling, positioning of the property to minimize sun exposure. As the installed cost of solar decreases the large scale use of solar is an economic solution to reducing dependence on expensive fossil fuel electricity. Indoor air and water quality are overlooked aspects of sustainable affordable development. By maximizing energy efficiency and minimizing harmful chemicals, we provide homeowners with better, healthier living spaces.