Go Lean Commentary
“I put a roof over your head …” – Rebuttal from any typical father.
We have all heard the above.
If you are a father yourself, you have probably said it. It’s a rite of passage. When it comes to Money Matters, satisfying housing is a Big Deal in starting any discussion. This was the case for the motivation for the book Go Lean…Caribbean – a roadmap for the technocratic Caribbean Union Trade Federation (CU) – in considering how to reboot Caribbean economics to deviate from the current failing disposition and move the region to a path of success. Page 152 of the book stated:
House Ourselves
In the US, it’s a truism of the National Association of Realtors® that “housing creates jobs”. With the repatriation of the Caribbean Diaspora, local building supplies and new “housing starts” will emerge in the Caribbean. Plus, the CU will facilitate mortgage secondary market and pre-fabulous construction thereby fostering new housing sub-industries.
See the original source of this quotation – from November 2013 – in the Appendix below.
Housing is a basic need. Everyone must have a solution. This premise is not in doubt. An amount of a country Gross Domestic Product will always be spent on housing. So this industry is a bellwether – an indicator or predictor of trends – for the rest of the economy: As goes housing, goes the market.
Consider your own economy!
What percentage of your monthly budget goes to housing? (In many urban areas, housing can account for 60%).
Now multiply that by 42 million people. Welcome to the quest to reform and transform the Caribbean societal engines. Considering the 3 societal engines of a community – economics, security and governance – it is so much easier to lead and get people to comply – to lean-in – if there are empowerments for housing.
Housing relates to economics, security and governance. This is a strong theme in the book Go Lean…Caribbean; it asserts that the best way to get regional buy-in for change is to lead with Money Matters. Consider how these 3 engines are impacted:
- Economics – mortgages, construction jobs, insurance risk pools, etc. See the reference article from November 2013 in the Appendix below
- Security – Emergency Management, Fire Rescue, Disaster Recovery, etc.
- Governance – Property registration, tax assessment, collection, etc.
This commentary is the 4th of a 5-part series from the movement behind the book Go Lean … Caribbean in consideration of Money Matters for leading the Caribbean down a different path from their status quo. The other commentaries in the series are cataloged as follows:
- Leading with Money Matters: Follow the Jobs
- Leading with Money Matters: Competing for New Industries
- Leading with Money Matters: Almighty Dollar
- Leading with Money Matters: As Goes Housing, Goes the Market
- Leading with Money Matters: Lottery Hopes and Dreams
All of these commentaries relate to “how” the stewards for a new Caribbean can persuade the region stakeholders to follow this empowerment roadmap for empowerment in this region. If we “dangle money in front of our subjects”, they will follow.
Here’s a little known Caribbean fact:
- Many Caribbean people do not pay monthly mortgages – they own their generational houses outright
- Many Caribbean homeowners do not pay annual property taxes
This is our Caribbean reality when it comes to housing. We must go from Zero to Hero. Imagine the institutional revenues from new mortgage opportunities; imagine the tax revenue and collections; imagine the jobs. The Go Lean book relates these and also one additional industrial development that can be pursued for the housing sector:
Pre-Fabricated Housing
One mission of the CU is to enable the region to facilitate its own shelter (plus food & clothing). A successful campaign to repatriate the Diaspora, and attract Retirement/Medical Tourists creates a new demand level for housing. The supply of housing will be met with different solutions, including Prefabricated options. In terms of demand, Pre-Fab homes are becoming popular in the EU and North America as they are cheaper compared to many existing homes on the market. The 2007-2009 Global Financial crisis, however, deflated the cost of regular houses in North America and Europe, so the “cheaper” benefits was not so valued during/after this crisis period. But the CU is a different market than the North America or Europe, resembling the Third World more so than the developed world, so a lot of the current housing is sub-standard and need to be replaced anyway.——–
See samples in the VIDEO here:
VIDEO – 21 Coolest Affordable Modern Prefab Houses – https://youtu.be/h2cZm4heamI
Published on Jul 18, 2017 – 21 Coolest Affordable Modern Prefab Houses
- Category: Howto & Style
- License: Creative Commons Attribution license (reuse allowed)
The book further relates that this new industrial expression can create 8.000 direct jobs in the design, fabrication and logistics for new pre-fabricated homes. While these are direct jobs, there is also the reality of indirect jobs – unrelated service and attendant functions – that at a 3.75 multiplier rate would add another 30,000 jobs. That’s 38,000 in total!
The book Go Lean … Caribbean serves as a roadmap for the introduction and implementation of the technocratic CU, with a charter to elevate Caribbean society by optimizing the delivery of the region’s basic needs. With 144 missions, the dynamics of housing is identified specifically as one of the missions for the Go Lean/CU roadmap; so too the quest for Pre-Fab housing. The book highlights the CU’s prime directives, as described by these statements:
- Optimization of the economic engines – including housing solutions – in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
- Establishment of a security apparatus to protect the resultant economic engines.
- Improvement of Caribbean governance to support these engines.
The Go Lean roadmap, and the Appendix reference, calls for the region to double-down its efforts to optimize local housing initiatives. Economic growth will be the result. This need was identified early in the Go Lean book, in the opening pronouncement in the Declaration of Interdependence (Page 14), as follows:
xxvi. Whereas the Caribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries, like prefabricated housing ….
The Go Lean … Caribbean roadmap constitutes a change for the region, a plan to consolidate 30 member-states into a Trade Federation with the tools/techniques to bring immediate change to the region to benefit one and all member-states. The roadmap calls for collaboration of the region’s housing needs at a CU federal agency. Though there is a separation-of-powers mandate between the member-states and federal agencies, the CU can still wield influence. It is only logical to conclude that people will “follow the money” as the CU optimizes the societal engines around housing.
As related in the first commentary in this series, Psychologist Abraham Maslow addressed the subject of basic needs. He established a “Hierarchy of Needs” that depicted the fact that basic needs – food, clothing and shelter – must be the first priority for society. All efforts towards higher-level needs – art, beauty, esteem, etc. – can only be engaged once those basic needs are satisfied. So handling Money Matters like housing will lead to more appreciation for the beauty of Caribbean life.
The Go Lean book provides 370 pages of detailed instructions regarding the community ethos needed to effect change and empowerment in the housing arena; plus the executions of the required strategies, tactics, implementations and advocacies to impact housing solutions. One particular advocacy relates directly to Housing (Page 161); consider some of the specific plans, excerpts and headlines from that advocacy in the book:
10 Ways to Improve Housing … in the Caribbean Region
| 1 | Lean-in for the Caribbean Single Market This will allow for the unification of the region into one market, thereby expanding to an economy of 30 countries, 42 million people and a GDP of over $800 Billion (according to 2010 figures). The CU‘s trade initiatives allows for more efficient exchange of goods & services that directly impact the supply and demand for housing. A basic economic precept is that houses should appreciate in value, doubling every 15 – 20 years. This grows individuals & community’s net worth.The CU will also provide e-Government services, outsourced for local governments, for property information systems for member countries, emulating a County Property Tax Recorder, Assessment and Collection operation for a typical US state/county. For economies-of-scale, the costs of installing and maintaining mainframe computer applications will be shared by many member states. This will allow for better property mapping/zoning, recording, tax assessment, tax rolls and tax collection. Mortgages must have clear title. This will also foster new industries, jobs, financial products, entrepreneurship & private investments. Regulation of building codes & standards come under peer review under the CU. |
| 2 | Public Housing Grants and Low-Interest Loans
This allows for greater infrastructure investment for mixed-used facilities, green initiatives, local efforts for urban and rural housing options. The goal will be to avoid the ghetto effect, while still fostering a free market for low-cost housing. Some public housing has to be designated exclusively for elder-care, as this population has different needs. |
| 3 | Promote Pre-fab-“ulous” Industry |
| 4 | Regulate and Promote Green Energy Deployments |
| 5 | Economic Incentives for “Energy Star” Appliances |
| 6 | Energy Co-ops and Power Grid Adoption
Communities should be able to organize energy coops, regulated at the CU level, and sell services back to their constituents. These coops can co-exist with existing utilities and monopolies by buying power from the suppliers and/or augmenting with alternative energy options like wind farm, tidal turbines, and natural gas. A grid makes this possible. |
| 7 | Hurricane Risk Reinsurance Fund
This fund fits the Emergency Management objectives of rebuilding and restoring after disasters. This is similar to Florida’s Joint Underwriters Association but instead regulated at the CU so as to maximize the premium pool. |
| 8 | Mortgage Secondary Financial Markets
Financial institutions get the benefits of mortgage-backed securities to replenish their lending capital. These institutions should only invest in bonds and other instruments rated AAA for municipal and Central Bank investments. |
| 9 | Mortgage Origination, Appraisals and Servicing Standards Enforcement
The CU wants to model the US economy and nation building strategies. But there are bad American examples to avoid as well. A prime lesson learned from the 2008 US sub-prime crisis is to ensure governance in this industry. The CU will implement appropriate oversight over mortgages, along the entire vertical line, to ensure compliance and best-practices. |
| 10 | Credit Reporting and Ratings for Consumers, Companies and Institutions
The CU will mandate fair credit reporting rules and accountability from industry players. The appropriate oversight will feature the Housing and Urban Authority (within the Interior Department) regulating for consumer credit and the Treasury Department regulating the Securities Rating industry for best practice compliance. (See Appendix GC – Page 276 – for 2008 lessons). |
The housing industry refers to more than just the house you live in, it includes the art-and-science of the raw materials and construction equipment, mortgage industry, credit eco-system, property insurance, property taxes, municipal services, power utility and energy efficiency. Rebooting the Caribbean economic engines means covering all of these related areas. This is the heavy-lifting of reforming and transforming the regional homeland.
In summary, the housing industry is a “bellwether” for the actual economy. If we can improve Caribbean housing, we can improve the Caribbean economy. If we can lead with Money Matters, we can reform and transform Caribbean society, make it a better homeland to live, work and play.
Yes, we can.
Everyone in Caribbean – residents, businesses, governments – are hereby urged to lean-in to the Go Lean roadmap for this empowerment. 🙂
Download the book Go Lean … Caribbean – now!
Sign the petition to lean-in for this roadmap for the Caribbean Union Trade Federation.
————
Appendix – Jobs Impact of an Existing Home Purchase
The National Association of Realtors® estimates that one job is generated for every two home sales. Using that ratio, 1,000 home sales generate 500 jobs.
The ratio is derived from the economic impact of an existing home sale. Each home sale contributes about sixty thousand dollars to the economy or Gross Domestic Product (GDP). The component measures of this figure are shown in the table below (full methodology page available).
Impact of Single Existing Home Purchase
Median Price $173,000
| Real Estate Industries | Related Industries (Furniture/Gardening) |
Local Economic Multiplier |
New Housing Construction Inducement |
Total Contribution |
| $15,570 + | $5,235 + | $9,987 + | $27,738 | = $58,529 |
GDP can be measured in three ways, one of which is the sum of all income1. Using the income concept and comparing GDP2 to the number of payroll workers in the US3, we find that the average income per employee was $113,000 in 2010.
This is an over-estimation of salary income since income can be earned from profits, rents, and other sources, however this gives us a ceiling to earnings per worker. Survey data show that full time US workers earned a median of $42,400 and average of $57, 4004 in 2009.
Putting these figures together reveals that every two home sales generate one job.
| Income from two home sales: | $117,058 | Income from two home sales | $117,058 |
| Income per worker (GDP/worker): | $113,000 | Income per worker (Average Earnings): |
$57,400 |
| Workers per two home sales: | 1.04 | Workers per two home sales: | 2.04 |
| Impact => 2 home sales = 1 job | Impact => 2 home sales = 2 jobs |
1 GDP can also be measured using what is called the expenditure approach or the value added approach. See
http://www.bea.gov/national/pdf/nipa_primer.pdf(link is external) for details.
2 GDP ranged between $14.4 and $14.9 trillion in 2010 per the Bureau of Economic Analysis.
3 Payroll employment in 2010 ranged between 129 and 130 million per the Bureau of Labor Statistics (BLS)
4 BLS/Census Current Population Survey’s Annual Social and Economic Supplement 2010
Source: National Association of Realtors. “Jobs Impact of an Existing Home Purchase”. Retrieved November 2013 from:
http://www.realtor.org/topics/home-ownership-matters/jobs-impact-of-an-existing-home-purchase