Kingston is currently experiencing an unprecedented Boom in commercial real estate activity, in that the City is being flooded with new building sites, showcasing new Apartments, Townhouses and Condominiums… Transforming the City’s Landscape, some say for the better, others say for the worse, as those who say for the worse, argue that aesthetically the city is losing its green appeal to developers who are more interested in profit than they are in maintaining the architectural, historical and environmental beauty of the City.
But according to one seasoned Financier/Builder, the time for concern about the Aesthetic beauty of Kingston has long since passed and the major concern now should be the structural maintenance of some of the many buildings now going up across the City. According to the same builder, if our political leaders were at all concerned with preserving the structural, architectural or historical and environmental beauty of the City, Permission would never have been granted to build the “Monstrosity” that now sits across from Devon House, on the Corners of Hope and Waterloo Roads.
And look at Vale Royal – Which Administration serious about environmental and or architectural beauty, would allow such a prime architectural historical beauty of a building like Vale Royal, to be as run-down as it is today, with seemingly, no plan to halt its decay?
But forget Devon House and Vale Royal, he continues, we should be more concerned that it would appear that indeed, the widescale degradation of our landscape for profit, without regard for long-term sustainability, has been officially green-lighted!
Our Concern should be about the degradation of norms and processes that has seen many developers ignoring or simply steamrolling through the rules and zoning regulations that were put in place to preserve neighbourhoods, property values and covenants. These days it’s as if nothing is sacred, and all things are now on the altar of political expedience, in a rush to placate financiers and or party operatives, upending all rules, as they seek to cash in on the building boom. This has led to and will continue to exacerbate, the perennial drought problems, and compound our sewage pollution problems, with the worst-case scenario being, some of these buildings might never be completed in the short-term, and if they are, might not find buyers and or renters, which will lead to another real-estate meltdown as we suffered in the mid-80s.
The mid-80s should be a case study and a game changer, but it seems the obvious lessons are lost on us. First, we should remember the term “Edifice Complex”. This is a terminology that was born out of the building boom of the mid-80s, a time during which the business moguls, bankers and developers at the time were caught up in outdoing each other, in their rush to create edifices, as testimonials to their genius and wealth. This led to unbridled spending in Construction, followed by a meltdown and Finsac…
We should now be concerned because we now know that most if not all things are cyclical in nature and our cycles tend to be between 10 to 20 years. So when we see the Faultline in the systems re-assert themselves. We should be concerned that we are right back on the Faultline of the 80s where after a period of depression, the Economy opens up to expansion but does so in a manner that endangered the entire economy.
Never forget the Ponzi schemes that followed the meltdown occasioned by the edifice complex. Now we are seeing reports of massive fraud and stealing in the financial sector, and this should concern us all, as these are indicators that the girders underpinning the Construction boom are not correctly centred. Our middle classes are not expanding, in fact, the contrary is the case, as they are contracting. The only class of people growing, exponentially, are the poor, so tell me, do you expect the poor to be able to be the purchasers of these multi-million dollar apartments, Condos and Homes? Or to eventually rent them when they are not bought?
The Country is definitely in need of new and more building solutions to accommodate its growing population, but the people we are targetting as prospective buyers, simply do not have the financial capacity to absorb these new buildings, at these high costs.
Here’s a case study: 20 years ago, a friend was renting a 2-bedroom apartment in a gated community in a prized complex in New Kingston. The Rent at the time was $1200 US per month. Today the rental in that same Prized complex is a$1500 US. I Say this to say it’s my considered opinion that we have reached saturation point and if we are to continue looking at it through rose-coloured lenses, then we might see it differently, but the signs to the contrary, are already there. So we really should examine the industry and the variables buffetting the industry, to see if we should have moved away from the current building model, to focus on lower and middle-income housing, with the Government stepping in to offer guidance, and incentives to forestall the rush by every potential investor and or builder to only target what they see as cashing in on the Gold Mine, represented by the High-end developments.
Mind you, our Financier Continues: There are those who say this building boom is a case of money laundering and that as concrete and steel will survive the test of time, its the best long-term investment strategy for those who are searching for options to legitimize their off the book-earnings, and stay out of the spotlight, should in case the US and or Jamaican Government, turns the spotlight on their operations.
In fact, said he, if this prognosis is real, then it explains a lot of the new players, and even explains why so many rules were broken to facilitate this boom, with old guardrails such as density, covenant restrictions, and building permits have all been
‘Doctored’ in some way, shape, and or form to facilitate some of these buildings, earning the ire of some legitimate builders and developers, who are complaining, and bitterly of the changing landscape in terms of the wholesale approach replacing the wholesome approach.
Frankly speaking, for many to take up these new offerings, banks and lending institutions will have to institute a new kind of flexi-policy regime to accommodate potential purchasers, just to keep the industry from going belly-up. My hope is that those who are in charge, are forward thinkers and see where we are and where we could be going and so rise to the challenge to stave off another meltdown, cos if they don’t, we might already be in the centre of a cyclical financial meltdown, underpinned by what we now see as a Building boom….
