Marlene Malahoo Forte Questions Tax Waiver Proposal for Affordable Housing Development

MONTEGO BAY, Jamaica — Minister of Legal and Constitutional Affairs, Marlene Malahoo Forte, has raised concerns over a proposal for tax exemptions to support the construction of affordable housing in Jamaica. The proposal, put forward by well-known developer Mark Kerr-Jarrett, suggests that waiving certain duties and General Consumption Tax (GCT) during the construction process could help reduce the cost of housing units, making them more affordable for low-income Jamaicans.

Kerr-Jarrett, the managing director and owner of Barnett Limited, presented his vision for low-cost, high-density housing at a recent Global Services Association of Jamaica breakfast forum. His proposal includes building three- or four-storey walk-up apartments, priced below $10 million each, targeting young professionals and low-income families. The units would be between 850 to 1,000 square feet, with two bedrooms and one bathroom, and could be financed through assistance from the National Housing Trust (NHT).

However, Kerr-Jarrett argued that in order to keep the prices of these units affordable, developers would need incentives, particularly tax exemptions. Specifically, he suggested using the Jamaica Special Economic Zones (JSEZ) Act of 2016 to waive duties and GCT during construction. He emphasized that such measures would make it possible to deliver affordable homes without passing on the full cost to buyers.

“If we are serious about affordable housing, we need to utilize the JSEZ to waive these taxes and duties, making construction cheaper and passing on those savings to potential homeowners,” Kerr-Jarrett explained at the forum held last Thursday at Grand-A-View Restaurant in Montego Bay.

While Kerr-Jarrett’s proposal was aimed at making housing more accessible, Malahoo Forte expressed concerns over the long-term sustainability of such tax exemptions. She pointed out that while it is crucial to address the high cost of housing, tax exemptions on a large scale could have significant implications for government revenue.

“What I hear you saying is that developers will need to be incentivized in many ways, but I am of the view that if taxes are so high that they need to be waived for developers to make a profit, then we have to rethink those taxes entirely,” said Malahoo Forte. “It doesn’t make sense to exempt everyone from taxes just to make housing affordable.”

The Minister noted that the government has already abolished several taxes and has avoided implementing new taxes over the past seven fiscal years. She stressed that for the government to continue providing services and infrastructure, it must strike a balance between supporting developers and maintaining a sustainable tax base.

“For every increase in services that people demand from the government, those services need to be funded through tax revenue. We must be clear about what we are willing to give up to achieve our objectives,” she added.

In addition to tax exemptions, Kerr-Jarrett also proposed that utility companies fund the cost of providing infrastructure for new developments, arguing that developers should not be responsible for footing the bill for essential services like water and electricity, particularly for low-income projects.

“We need to consider the long-term fairness of the model. Once the developer creates a customer, that customer should not be expected to pay for the infrastructure that enables their service,” he explained.

Kerr-Jarrett also introduced the concept of “workforce housing,” a model that could serve young adults just entering the workforce. These dormitory-style accommodations would feature small, affordable units with shared amenities like dining areas and laundry facilities. The model targets those who may not yet be able to afford full-scale housing but need a place to live during the week.

The developer suggested that underutilized properties, such as those owned by the Jamaica Railway Corporation (JRC) in Montego Bay, could be repurposed for such developments, creating affordable living spaces for young professionals.

Montego Bay Mayor Richard Vernon, who was also a panelist at the forum, expressed support for Kerr-Jarrett’s ideas and highlighted potential areas in the city—such as Barracks Road, Albion, and Vernon Drive—where affordable housing projects could be implemented. Vernon noted that these communities are part of the government’s broader urban development strategy.

The mayor also pointed to the relatively low building fees in St. James, which he said could make it easier for developers to build low-income housing. In fact, he suggested that the St. James Municipal Corporation was open to further reducing building fees to attract affordable housing developers, especially those using environmentally friendly designs.

“We are facilitating the idea of lowering fees further to help developers who are bringing in environmentally conscious housing solutions,” Vernon said.

Marlene Malahoo Forte, who also serves as Member of Parliament for St James West Central, reminded the forum that any new housing development must comply with legal accessibility standards, particularly for persons with disabilities.

“Even as we discuss affordable housing, we have to ensure that we are not compromising on basic accessibility requirements,” she said. “Certain things are non-negotiable. We must comply with both local laws and international standards to ensure that our housing is inclusive for all Jamaicans.”

While Kerr-Jarrett’s proposal offers a potential path to making housing more affordable, it also underscores the complexities involved in balancing development with fiscal responsibility. The debate over tax exemptions and the government’s role in supporting affordable housing highlights the need for a careful, collaborative approach.

As discussions continue, it remains to be seen how the government and private developers can work together to provide sustainable, affordable housing solutions that meet the needs of Jamaica’s growing population, while also ensuring long-term financial stability.