Should the poor own a piece of The Rock?

THE controversial Cooper’s Pen demolition has revived a brisk discussion on the stress and struggles that come with being a property owner. Annual insurance payments, maintenance, legal fees that come with passing the land to your heirs or dislodging squatters are some of the possible costs for those who operate within the formal system and play by the rules. Jamaica Observer’s Real Estate on the Rock turned to economist Dr Damien King, along with O Dave Allen — executive chairman of an organisation which for years has agitated for the working poor to be land owners — for their views on whether it is practical for everyone to own a piece of The Rock.

Read on for their views in a lightly edited Q&A. Does it make sense, economically for us to all own a house? Economist, Dr Damien King: One of the things that it is helpful and constructive for people to do is to separate emotional desires from investments.

Once you can make that separation, then it shows up in a number of different places. ALLEN…it’s not easy to squat The first one is in the desire to own your own home. When you think of what is the appropriate place for you to live at a certain stage of your life, that’s one issue.

A second issue is approaching real estate as an investment. Those are two different objectives, and they are unlikely to coincide in the same property. Suppose, for example, that you’re a single person and you really only need a studio or a one-bedroom, but you have some extra change because you’ve been saving and you can afford a three-bedroom apartment.

Don’t under-invest and buy the studio or the one bedroom because that is what you want to live in. Buy the three bedroom and don’t live in it, because [if you do] you are wasting income. Buy the three bedroom, rent it out, and then rent the one bedroom for yourself.

This way you have surplus income that you can then continue to invest and continue to accumulate. Another application of the same principle is that you need somewhere to live, and you want to invest, but all you can afford is a little piece of land somewhere that doesn’t have any structure upon it. If you are somebody who is not relatively wealthy, then it’s not a good idea to have a non-earning asset, which is what land is.