Crime, Fear and the Jamaican Private Security Firm

WARNING: Some of the images in the above are graphic and hence discretion is advised

Several Jamaican residential communities have now turned to the private security industry to provide auxiliary security support in the face on a protracted crime surge and the island being bestowed with the moniker “Murder Capital of the World”- consequent on having the highest per capita murder rate. In this regard, the communities of Seymour Lands, Trafalgar Park and the residential sections of New Kingston are not exceptions, with an estimated 50 – 60 percent of all homes being involved in some formal arrangement with one of the private security firms or an informal arrangement with individuals to provide services. However, perversely, the continued success of the private security industry in these communities and the wider Jamaican society is predicated on the continued instability of the society. For its part, the Jamaica Constabulary Force (JCF) is perceived as being understaffed and under-funded and in need of support in an effort to meet the challenges of today’s crime-ridden society.

In fact, householders are paying substantial sums of money not only to have private guards patrol their communities, gated or otherwise, but they have also invested heavily in panic buttons and other alarm systems. Further some gated communities who are unable to afford the private security fees have decided to engage the services of “gatemen” who are paid at the level of security guards and which provide de facto security services where necessary. There are also communities who have or are seeking to implement neighbourhood watches – where groups of citizens patrol their respective communities and develop their own early alert mechanism in the event any potential criminal activity is determined.

However it should be noted that the communities of Seymour Lands, Trafalgar Park and the residential sections of New Kingston are served by the Matildas Corner and Half Way Tree Police Stations, with additional support being available through the New Kingston Police Post. Nevertheless, the citizenry perceives that they require the private security services. This is guided by the fact that the police have been unable to control the incidents of house breaking and larceny, armed robbery, petty thefts, drug pushing, street prostitution and the proliferation of sensuous massage parlours which obtain in the communities. Further, the response times from the private security entities are considerably faster, routinely ranging from 3 to 5 minutes whereas in the case of the Police, the responses can range from as low as 3 minutes to hours or non-arrival. This is not aided by the inordinate delays in the answering of the 119 emergency numbers on occasion. Nevertheless, presuming the accuracy of recent claims that the major crimes are trending down, it remains unclear whether there has been a concomitant increase in arrests and indeed if the improved statistics can be attributed to more efficient policing or to the involvement of the private security entities. Indeed, the impact of the JCF is further undermined by their inability / unwillingness to enforce the Noise Abatement Act (1997), which leaves many residential communities feeling vulnerable and turning to private services.

Whereas it is clear that auxiliary services, such as the private security firms can never replace the Jamaica Constabulary Force, there is an obvious need for increased personnel. As at March 2006, there were some 12, 891 security guards relative to 8, 100 members of the police force (out of an establishment figure of 8,500). There is also the obvious but chronic shortage of equipment facing the JCF relative to the private security industry. As one homeowner laments “When we were growing up, the police would routinely conduct neighbourhood patrols and would on occasion stop and check on individual dwellings (particularly the elderly) to see if they had any particular concerns about their security. Those days are long gone but then in a country where an $80 million price tag for a motor car is deemed “reasonable” can we be surprised?”

See Also
The Case Against Mixed-Use Developments Part 1

NEPA Transferred: Golding’s Super-Ministry Comes Of Age

Come April 1, 2008, the National Environment and Planning Agency, NEPA, will no longer be classified under the Ministry of Health and Environment but under the Office of the Prime Minister. That’s the stated intent of the Government of Jamaica as outlined in the Estimates of Expenditure for the year ending 31st March 2009 and tabled in the House of Representatives by Finance Minister Audley Shaw on Thursday, March 27, 2008. Indeed, the document explicitly states that functions under (Expenditure) Head 4200 related to the Environment, have been transferred to the Office of the Prime Minister effective April 1, 2008. Further within the document there is a repeated reference to the Ministry of Health as “formerly Ministry of Health and Environment”. However Minister of Health, Rudyard Spencer is seemingly unaware of any such development, stating on the TVJ 7 pm newscast on Friday that "I don't know that to be the case, it might have been a typo, Environment is still there (under the Health portfolio), yes".

The 2008/2009 estimates also reveal that the allocations for the Office of the Prime Minister’s (OPM's) budget has been fashioned to include projects being implemented by (NEPA). Similarly the Land Portfolio has apparently been stripped from the Ministry of Agriculture and transferred to OPM. This would affect most notably the reporting relationship of the National Land Agency (NLA).

This is however consistent with the utterances of Prime Minister Golding as he continues to seek to create a more investor friendly climate and really dovetails into the Planning and Development portfolio which he had also assumed from the inception of his regime. Further, it is not expected that this is the end of the reformation process for NEPA, as the Prime Minister earlier this year had stated that it was his intent to establish a separate Environmental agency. NEPA as currently constituted, is basically an amalgamation of the Natural Resources and Conservation Authority (NRCA) and the Town and Country Planning Department, both of which are already governed by separate acts of Parliament, making any plans to revert to its initial state relatively easy.

Nevertheless, there are concerns that Prime Minister Golding may be taking on too many line areas of responsibility and therefore hindering his ability to focus on overall policy issues. Already the Prime Minister has assumed responsibility for Defence, Planning and Development, Local Government and now Lands and the Environment. Interestingly, under the previous regime, that portfolio mix was handled by up to five (5) separate Cabinet rank Ministers including the Prime Minister. For his part PM Golding has three Ministers of State (Shahine Robinson, Robert Montague and Daryl Vaz) and one Cabinet rank Minister without Portfolio assigned to OPM (James Robertson).

Animal Farm: The New Jamaican Constitution?

The Orwellian maxim that “all men are created equal but some are created more equal than others” seems to have become the watchwords of the National Works Agency and the Police force in Jamaica. This, as the authorities have unilaterally decided to route the road march from the Carnival celebrations slated for Sunday, March 30, 2008, through the residential community of Seymour Lands. This has proven to be particularly irksome to the residents living on or in close proximity to Upper Musgrave Avenue, Argyle Road and Musgrave Avenue as it was mutually agreed from 2006 with the Jamaica Constabulary Force that the celebrants would continue their activities along the Lady Musgrave Road (main road) which would lengthen their journey by only a few metres and avoid disturbing the residential areas. In fact, the agreed route of 2006 was followed in 2007 with nary a peep from residents.

The decision of the authorities to allow for this particular march route now places the revelers and the attendant mind numbing sounds, in very close proximity to two homes for the aged, a number of multi-storey apartment and townhouse complexes as well as several single family dwellings. Aside from this being a flagrant breach of the Noise Abatement Act, the fact that it has actually received state approval with absolutely no reference to the citizenry remains baffling and smacks of autocracy. This is likely to be compounded by hundreds of revelers and vehicles traversing Argyle Road, which is already in an advanced state of disrepair, where the surface is largely non-existent and the road has already collapsed on a few occasions. Further the attendant and totally predictable dust nuisance from that source should surely have been a cause for concern. Indeed it is instructive note that Hopefield Avenue, Upper Musgrave Avenue, Argyle Road and Musgrave Avenue have all collapsed several times in the recent past, given poor rehabilitation works, after the laying of sewer mains and are likely to undergo their greatest test on Sunday. This has already led to a public apology from the National Water Commission and raises a question about the degree of effective communication between the State agencies.

However, this issue really highlights the difficulties that residents of the Seymour Lands (Golden Triangle), Trafalgar Park and the residential sections of New Kingston are routinely faced with. Lack of effective consultation, arbitrary governance and myopic urban planning can safely characterize the experiences of the listed communities and rubbishes the claims regarding the so-called processes of consultation. Further, cognizance must be taken of the fact, that these are the same areas that the Government of Jamaica is seemingly working assiduously to commercialize and convert into urban ghettos and it’s the private developers who have been rescuing the communities from the clutches of opportunistic governance.

Update

Subsequent to the publication of this article, there was a last-minute change of route to bypass the residential communities in Seymour Lands, confining the road march activities to the main roads as obtained in previous years.

See Also:

Know the Law: Noisy Nights No More

Jamaica: A Sellers Market for Now

The Jamaican housing market continues to operate in a dysfunctional manner, as the associated prices remain disconnected from market fundamentals. Indeed, housing prices are at levels which surpasses any historically identifiable relationship to rents or salaries. Annual rents range between 8.5 and 11.5 percent of purchase prices in the upper end of the market. With mortgage rates hovering in the 14 percent range at the lower end of the yield curve, it costs approximately 65 percent more to borrow money to purchase a house, than it does to rent the same thing. At the middle and lower end of the Jamaican real estate market, average rents range between 2.8 and 5 percent of the purchase price, so in this category it costs more than twice as much to borrow money to buy a house than it does to rent the same thing. Further, total owner costs including taxes, maintenance and insurance are estimated at approximately 5 – 9 percent, which at the middle and lower end of the market, is almost twice the cost of renting. Similarly, salaries are largely unable to cover mortgages, which are primarily funded at the upper end of the market by the proceeds of a second sale and remittance flows. Indeed, it is instructive to note that the Building Societies in Jamaica use a benchmark formula which dictates that mortgage payments must not exceed 30 percent of gross income as a measure of affordability, but in reality most purchases are far in excess of that.

The picture has improved somewhat with a 60 percent increase in rental rates in Jamaica in 2007 relative to 2006 and the 67 percent increase in sale prices experienced between 2005 and 2007. Indeed, for example, in the Golden Triangle sale prices of J$40m for a 3-bedroom townhouse are not uncommon, nor is a price tag of US$1.2m per acre of land, with rents routinely averaging between US$2,000 – US$4,000 per month. This is replicated in many other residential communities in Jamaica particularly in Kingston 6 and 8, but tends to cater only to the upper end of the market.

However, the fact that most sellers require a 15 to 20 percent deposit and closing costs (inclusive of stamp duty and legal fees) are estimated to be 10 – 13 percent of the purchase price, has excluded a substantial number of potential purchasers. Further, the cost of home insurance is proving to be a challenge in the Jamaican market, particularly at the upper end where the extraordinarily high values lead to insurance syndication (as no single carrier is willing to carry the entire risk). Indeed, particularly in the lower and middle income groupings, more persons are opting for own-insurance which has its own inherent challenges. This is of course compounded by the annual re-valuation exercise, that is usually required under powers of a mortgage and which valuation is usually priced at 0.5 percent of the valuation price.

However, Jamaica is not the worst in the Caribbean Region in terms of residential pricing and in fact is ranked near the bottom, in terms of cost per square metre, relative to its neighbours. Jamaica’s average cost per square metre for residential housing according to Global Property Guide Research is determined to be US$1,678 only surpassing Aruba and Dominica. At the top of the regional scale is Bermuda which is calculated at US$7,861, followed by Barbados at US$6,728 per square metre.

While it remains true that over-optimism among investors has pushed valuations to levels that are inconsistent with the outlook for real estate sales and rents in Jamaica, these values are likely to increase further in the short term after which a market correction is expected. In any event, though a market correction is anticipated, as long as developments remain concentrated in a few areas, creating artificially high demand, prices will increase but so will the degree of frustration among the majority of persons who will recognize that their dreams of owning a home are becoming more elusive with every passing day. In the interim, though, the Jamaica’s real estate market will remain a sellers dream.

Know the Law: The Noise Abatement Act

“Under the Jamaican Constitution, persons are entitled to enjoy the quietude of their homes, without molestation”. This oft repeated comment, is deemed in most residential communities, as yet another hollow platitiude echoing in the halls of injustice, as persons continue to breach the Noise Abatement Act (1997) also colloquially referred to as the “Night Noises Act”, with impunity. However in most cases, the affected parties are not familiar with the actual tenets of the law and rely on anectdotal information, which would in large part. be suggestive of a notion that persons are entitled to disturb persons particularly on weekends, up until 2am. Not so! Therefore in furtherance of the series “Know the Law”, the Trafalgar Council has sought to reproduce the law as it has been printed, so that persons will be able to familiarize themselves with the actual provisions and demand effective policing of its tenets.

Read this doc on Scribd: The Noise Abatement Act

See Also
Know the Law: Noisy Nights No More
Know the Law: Speak your Truth with Conviction

Jamaican Real Estate Values Soar: Correction Inevitable

There has been growing controversy, concerning the real estate market in Jamaica and whether or not it is due for a correction. A market correction is sometimes defined as a temporary decrease during a bull (positive) market and in terms of real estate can be be manifested in a decline of 10% to as much 50% in value over a short period of time. Economists and financial analysts in Jamaica conclude that a correction is inevitable, whereas real estate market professionals continue to argue that this not likely, given the fact that demand continues to outstrip supply and will continue to do so for the foreseeable future. In other words, the real estate experts expect the current housing bubble to continue at least over the short to medium term. A housing bubble is characterized by rapid increases in the valuations of real property until unsustainable levels are reached relative to incomes, price-to-rent ratios, and other economic indicators of affordability. This in turn is followed by a market correction, in which decreases in home prices can result in many owners holding negative equity (a mortgage debt higher than the value of the property). This is of course not a new scenario as this obtained in the Jamaican market place during the financial meltdown of the 1990’s, when large volumes of real estate, previously held by varying Financial Institutions, Corporate Enterprises and individuals were suddenly offered on the market, driving values considerably downwards.

However the real problem is that as a housing boom continues the investment decisions become less and less sound. In the early years of a boom it is different. The developer would be duty bound to ensure that the requisite feasibility analysis and due diligence exercises were completed before anyone would trust them with their money, however, with several projects now being pre-financed by willing buyers even before construction has commenced, has led to a degree of lassitude creeping into the market with potentially deleterious effects. This leads markets that are already over-optimistic about investment opportunities into making serious errors of exuberance because the full facts are not known.

Nevertheless, several useful and significant real estate projects are currently underway in Jamaica. However, it is also true that over-optimism among investors has pushed valuations to levels that are inconsistent with the outlook for real estate sales and rents. Indeed, in some sections of the Jamaican market, real estate values have increased in excess of 275 percent since 2005 with values moving from $8,000 - $9,000 per square foot in 2005 to as high as $22,000 per square foot currently. This has no doubt contributed to the $50 billion value attained by the local real estate market in 2007. However cognizance must be taken of the fact that this housing bubble is largely focused in the upper middle and upper income socioeconomic groups, but not to the same degree in the middle and lower income groupings. Indeed with the National Housing Trust and the principal Building Societies increasing their lending rates in recent times this is likely to drive costs even higher. This will be further compounded by expected increases in general insurance premiums.

Indeed, whereas there is reportedly high demand in the $3 million to $15 million market, there is little supply. This is compounded by the continued creeping commercialization in the established residential sections of urban communities, while ceding large parts of the designated commercial zones to criminal elements. Indeed in the Corporate Area (Kingston and St Andrew), it is estimated that 20 to 25 percent of the lands have been abandoned because of a legacy of criminal activity whereas another 25 percent is in urgent need of regeneration. Hence, it can be argued that pricing in the Jamaican housing market is being determined by market distortions rather than the true interaction of the forces of demand and supply and therefore such pricing is not sustainable. Further with average real incomes declining in Jamaica, the current real estate boom is not sustainable.

This raises the real prospect of the real estate market being faced at least over the medium term with issues of ballooning inventories, falling prices, and sharply reduced sales volumes. However, given the fact that the Jamaican real estate market is not homogeneous, the degree of fallout anticipated will vary with market segments. In fact the most significant fallout in anticipated in the high end of the market, which through the application of higher density ratios, is expected to reach saturation point. As vehicles for speculation, their utility is likely to wane over the medium term, given the exorbitant cost structures that prevail and therefore render the properties as being too expensive for the rental market. Further with the recession in the US economy, there will be the attendant fallout in remittance flows among other adverse developments and hence there is likely to be a negative impact to varying degrees on all segments of the Jamaican real estate market. In large part, the current real estate pricing structure largely precludes the lower middle income and lower income groups and with the increases in mortgage rates, the issue of affordability is exacerbated. However, since the Government of Jamaica has committed itself to the regeneration of Downtown Kingston as well as other urban centres over the medium term, if successful, this will likely lead to a dampening in demand for commercial property in residential areas and lead to a reduction in price.

In any event, with the price mechanism in the local real estate market so hopelessly distorted it is difficult to conceive of a scenario where there will not be a substantial market correction. Whereas it is readily acknowledged that land prices over time will generally trend upwards, market fundamentals do not support the pricing structure which currently obtains in the Jamaican real estate market.

See Also

An Island Paradise...Is Anyone Home?

The Case Against Mixed Use Developments in Jamaica... Part 1

Jamaican Govt. Backpedals on 90-Day Approval?

“Only projects that need no environmental impact assessment (EIA) will be assessed and approved in 90 days or less”. That’s the word emanating from the National Environment and Planning Agency (NEPA), as it broke its silence publicly on the controversial issue of a 90-day approval process mooted by Prime Minister Bruce Golding. Speaking at a Gleaner’s Editors Forum on Tuesday, March 18, 2008, NEPA’s Public Education Manager Natalie Fearon, reportedly advised that: "What we have done is create a two-tier system to see what we can get done, in 30 days and under, and what else can be done using another channel. So I think it is a matter of working smarter and being realistic about what can be done in a specific time”.

This new Government position was also echoed on Friday March 14, 2008 by Minister of Housing and Water, Dr Horace Chang, who advised that the Government of Jamaica was committed to reducing the timeline for residential approvals to no more than 90 days. Speaking at the official launch of the Meadows of Irwin Housing Development in Montego Bay, Dr Chang advised "We want to make the planning approval process, especially for residential areas, within 90 days,"

This is in stark contrast to the stated position of Prime Minister Golding, who in response to complaints about long delays in the approval of development projects, sought to impose a 90 day timeline for the regulatory agencies to make a final determination. Indeed, Mr Golding at that time further advised that if potential developers were not in receipt of a response from the regulatory agencies within the 90-day deadline, they were to treat the applications as being approved and commence development. However this newly softened position comes on the heels of widespread criticism by the Environmental Lobby, various Community Based Organizations (CBO’s) and the more muted sounds of disagreement from the local authorities on the inherent dangers in the accelerating of the general approval process to 90 days or less. This, as there have been widespread concerns about the fate of Environmental Impact Assessments (EIA’s), required particularly for large projects, in the new dispensation. It is generally accepted globally, that EIA's usually take 6 months to 2 years to complete and are particularly germane in a process of determining the potential threats to the environment of development projects.

However, though deemed generally by its detractors to be a step in the right direction, the position being articulated by Dr Chang and echoed by NEPA, does not address the largely discretionary powers of NEPA to determine which projects require an EIA. Further, there is no stipulation in law which requires that all projects require an EIA, nor are there any clear guidelines regarding the types of projects requiring an EIA Also, there is still no discernible action geared to improve the degree of public consultation as it relates to development projects, as the Golding regime while seeking inputs from architects and urban planners, have noticeably excluded any involvement of Community Based Organizations in terms of the long term planning for the Kingston. This has been exacerbated in recent times by a unilateral decision making process which has led to alterations of density ratios and setback distances particularly in Kingston and St Andrew to ridiculous levels, while ignoring the widespread objections and concerns of the citizenry.

See Also

Quick Approvals...Compromised Quality: Jamaica's Development at Risk

Construction Booms in Jamaica: Are the Building's Safe?