‘Not a bad investment’: Real estate agents certain luxury Ruthven Tower units will sell for NHT

A local real estate agent has declared that the National Housing Trust (NHT) is failing to provide affordable housing solutions for its contributors in Kingston and St Andrew.

The representative, who asked not to be named, told Our Today on Wednesday afternoon (November 10), “For as long as I can recall, I haven’t heard any developments being done by the NHT in a while.”

At the same time, Newton Johnson, a RE/Max Elite broker, has to some extent agreed with his industry colleague’s view but stated it would be almost impossible for the NHT to provide affordable housing in the nation’s capital.

“I beg to differ. [The NHT] has some projects in Trelawny and Clarendon that are affordable. Let me tell you, when you look at Kingston and St Andrew, the inventory is just not there. Building out affordable housing in Kingston and St Andrew is just not there,” Johnson began.

“And you have to look at the cost of the land. The costs are high so they can’t put up affordable houses within the Kingston and St Andrew landscape. It is just not possible. In my humble opinion, [people] might have to look elsewhere in Old Harbour, Clarendon, St Thomas and I think NHT is looking in those spaces,” he added.

Our Today was speaking with the real estate agents in an effort to determine the level of demand for upscale housing units amid the recent controversy around the NHT’s New Kingston-based Ruthven Towers development and its pricing as published last week.

Earlier in the day, Howard Mitchell, former chairman of the NHT, had indicated the entity should not be focused on luxury apartments or compete with private developers in that middle- to upper-income market.

“Government, generally, should not be in the private sector’s space in terms of commercial operations. That, to me, is a surprise because I thought we were moving away from that kind of state-dominated activity,” Mitchell told Our Today. 

“While I acknowledge that the Ruthven development has been around for a long time, and that maybe the Trust had to carry it through just to get it off the table, I think a better approach would have been once gotten approvals for it, [for the NHT] to turn around and send it in to a private developer’s space. Allow that developer to bring it to fruition and sell the units in the private sector—even if, perhaps with a restriction or condition, some of the units are reserved for contributors to the NHT. The NHT is not a developer, the NHT is not good at developments,” the former NHT chair continued.

Though chiding the State-owned agency, Mitchell agreed with NHT’s public statement on Monday, as he also believed there was a demand for the pricey, upscale units.

“I think demand for such a development is there. The private sector market is quite active in that price point area, so I agree. I don’t think they’ll have a problem selling the units. But the question is are they satisfying the demand in accordance [with] their mandate?” Mitchell asked.

The Century 21 Heave-Ho broker, who spoke with Our Today, indicated that Kingston’s real estate market is “very buoyant and robust”. 

The agent admitted that due to the nature of the city there are “prime locations” more sought after than others and, added to the growing demand for housing, low-interest rates, and clients’ desire to diversify portfolio investments, upscale developments are increasing in value.

“The first thing is we have to define ‘upscale’. When we say upscale are we referring to the [expensive] price of the property or its location? Because some places will always be more attractive than others. At the same time, there isn’t that much land. In Kingston 19, for example, you see apartments going up in Belvedere, something many private developers wouldn’t consider 20 or 30 years ago,” the rep explained.

Johnson, from RE/MAX Elite, also weighing in on Ruthven Towers, argued that the pricing of the units could be particularly attractive to its target demographic.

Johnson remarked that considering the NHT’s pricing mechanism for the units—set at JM$38,000 per square foot, according to its brochure—is competitive with many privately developed projects and, while the finished aesthetic may not be up to par, many will take up these housing solutions.

“It is a good investment product. The location itself is a good investment, there’s no doubt about that in my mind and there will be some amount of capital appreciation in a year or so,” he told Our Today.

“The question to be asked and it has been answered [by] the NHT, ‘What did they hope to achieve, what part of the [real estate] landscape were they looking to meet the demand for?’, and they were clear on that. It was not for lower-income but rather middle- and upper-class. Remember these people also pay NHT [contributions] and in terms of the benefits they get, it is minuscule,” Johnson argued.

Johnson also agreed with his colleague that many middle- to upper-income Jamaicans are not willing to acquire property ‘willy-nilly’, even if they are in the best possible position to immediately afford them.

He additionally shared similar convictions as Mitchell, that all Ruthven Tower units will sell.

“My only concern is I’m not sure, in terms of the marketing, if the NHT has that level to market the product, but I share that conviction. Based on the price [and] the location, they will sell,” the RE/MAX Elite broker contended.

So dire is the reality of the housing shortage in Kingston, that an increasing multitude of Jamaicans living in the city all their lives are reluctantly looking to neighbouring Portmore after being outpriced. 

Johnson conceded more could be done but the city’s stark reality stares many, even the NHT, dead in the face.

“Realistically, where is the land going to come from? Where is that piece of land a developer or the NHT can buy at a price to build affordable housing within that geographic space?” Johnson queried.

As a countermeasure, Johnson called on the Government to place urban renewal on its highest priority to address the housing crisis, as he sees reclaiming land from ‘less desirable’ and non-compliant property owners as a possible fix to Kingston’s bid to house its growing population.

“I think if you look at Franklyn Town, Rollington Town, there are certain areas that the Government, as a policy, can build new high-rises and sell to people who can afford to buy it,” he argued.

“The Government needs to look at urban renewal. Look at these inner-city spaces. I mean, there was a time not too long ago when Franklyn Town was an upscale community. What happened? Government could be looking at urban renewal and truth be told, there are some small developers who have been doing just that. On a larger scale, Government has the remit, they have the power to take these places and develop them,” Johnson told Our Today.

READ MORE:

• Jamaicans left in shock as Ruthven Towers apartment prices balloon as high as J$40 million
• ‘Demand was there’: NHT defends luxury Ruthven apartments as backlash intensifies
• Former NHT chair Howard Mitchell decries lost focus amid Ruthven Towers furore