Safe, decent, affordable housing is a critical component of our development mix. If workers and residents of all income levels cannot afford a place to live, it is not only they who suffer, but our economy as a whole.
So it is good to see some developers tapping into the mid-level market, sometimes known as ‘workforce housing’, such as the 75-unit 19 North condo development between Willie Farrington Drive and the Esterley Tibbetts Highway in West Bay.
As the Cayman Compass reported on Wednesday, company leaders say that all but five of the 45 initial units in the project have been sold a full year before they are expected to be habitable.
According to its social media postings, Downtown Reach, just off Linford Pierson Highway near George Town, another development targeting a similar demographic, has sold nearly all the units in its first phase of construction, expected to break ground next month. Clearly, as 19 North Development Company director Jonathan Murphy told the Compass, there is significant demand in this market.
“We understand from talking to a number of local businesses that there is a lack of quality, affordable housing solutions that are conveniently located for their employees,” he said, adding that is only expected to continue as the island’s tourist and service industries continue to grow.
Too often, discussions of affordable housing focus solely on people living in poverty – an important demographic, to be sure. But when housing costs soar, even full-time workers earning mid-level wages can be priced out of decent places to live.
A good rule of thumb, used in many countries around the world, is that housing and related expenses should not exceed 30% of a household’s take-home income. In 2015, the Economics and Statistics Office Household Budget Survey tallied the actual cost for rental housing and imputed costs for owner-occupied housing (in other words, the cost of using the home rather than renting it out or selling it – sometimes referred to as opportunity cost). It found that housing-related costs accounted for 32.9% of the annual consumption expenditure on our islands. That was an improvement from the 2007 survey, which recorded housing-related expenses accounting for 39% of expenditures, although not yet what could be considered ‘affordable.’ It is also worth noting that few experiences are actually average – for every household that spends far less than one third of its income on housing, there is another which spends significantly more.
Government statisticians at the time credited the improvement in housing-related expenditures to an increase in the supply of housing. From what we are seeing and hearing in the community, there still is plenty of room for improvement.
Cayman’s draft long-range comprehensive plan includes several provisions that would identify the current balance between supply and demand for affordable housing and help developers fill the gap. They include: encouraging affordable development by modifying planning regulations to allow for smaller lot sizes and higher densities; creating an island-wide affordable housing policy and implementation strategies; creating a forecast for long-term residential demand and associated impacts; and reviewing existing zoning categories, requirements and design standards to help ensure the supply and distribution of residential units are meeting demand.