While Dominican construction grew at a historic rate between 1996 and 2000, the production of social housing advanced at a different pace and in a different direction
SANTO DOMINGO – In 1999, Dominican construction grew by 18.2%, according to President Leonel Fernández's own accountability speech before the National Assembly. It was the fastest-growing sector of the national economy that year, surpassing communications (15.6%) and local industry (10.9%).
The square meters of construction of apartments and homes under permit from the State Secretariat of Public Works and Communications went from 1.8 to 3.1 million square meters in three years, an increase of 80%, and cement consumption placed the country in first place in Latin America and the Caribbean, only behind the United States in the entire hemisphere.
These figures describe a booming construction economy, but it is worth asking, with the same attention with which the presidential speech detailed the growth of the sector, what proportion of that expansion reached social housing and what proportion was allocated to other types of development.
How do you explain the 18.2%?
President Fernández himself was explicit about the origin of that growth: "private investment in shopping centers, hotels, residential towers and family homes," combined with "the remarkable public investment in highways, airports, urban road solutions, school construction, hospital renovations" and low-cost housing projects for the victims of Hurricane Georges.
Of the four private components mentioned, three—shopping centers, hotels, and residential towers—correspond to a market segment inaccessible to the average Dominican family of the late nineties.
Only the fourth, family homes, is close to ordinary residential housing, without the discourse distinguishing how much of that growth corresponded to middle or upper class housing versus social housing.
Tourism, a parallel engine of that same expansion, provides a useful reference: the number of hotel rooms under construction reached 10,200 during the year prior to the 1999 speech, of which 4,630 came into operation, bringing the total supply to 43,215 rooms.
In other words, in just one year, the Dominican hotel industry put into construction almost half of the rooms that INVI had completed as social housing solutions during all of 1998 (21,538 units).
Both sectors, tourism and social housing, used the same labor, the same cement and the same rebar, but competed for them from completely different economic positions.
Social housing, apart
In contrast to that double-digit growth in overall construction, the pace of public housing production was different in 1997, when government execution of housing projects nationwide barely exceeded 3,000 housing units.
In 1998, INVI reported 21,538 completed solutions, a figure raised by the Georges emergency and the 10,000 prefabricated reconstruction homes, but exceptional within the four-year series, not representative of a sustained pace.
Put into perspective against the housing deficit that the government itself acknowledged at more than 700,000 units, not even the most productive year of the period, driven by post-hurricane reconstruction, managed to significantly move that structural figure.
The 18.2% growth in construction in 1999 coexisted, in other words, with a housing deficit that remained virtually unchanged.
It is important to emphasize that none of Fernández's accountability speeches attempted to hide this disparity; on the contrary, they explicitly mentioned it year after year, almost as an obligatory refrain within the narrative of progress: the government was growing, construction was growing, tourism was growing, and the deficit of 700,000 homes remained as the side note that no February closing speech could erase from the official balance sheet.
The 18.2% growth in construction in 1999 coexisted, in other words, with a housing deficit that remained virtually unchanged. (Photo(AGN).
Cement doesn't discriminate, but credit does
The explanation for this disconnect lies not only in the political will of the government in power, but also in the very structure of housing finance that existed in the country.
The housing bond program that INVI and the National Housing Bank tested in 1998 and 1999 depended, for the private financing part, on the ability of the beneficiary families to access formal mortgage credit, something that most lower-income households could not do without the guarantee or direct subsidy of the State.
That same structural limitation, unequal access to formal credit according to income level, is what later documents on the Dominican housing deficit, such as those prepared by the National Statistics Office (ONE) based on population and housing censuses, would continue to point out as one of the persistent causes of the problem long after the end of the Fernández government.
Commercial banks and savings and loan associations, capable of financing residential towers and tourist projects at a rate of 18.2% per year, did not find social housing in the same period to be an equally profitable business.
The financial and territorial mismatch
The boom in private construction was concentrated in Santo Domingo and in the tourist centers of Bávaro, Punta Cana, Bayahibe and Puerto Plata, where the speech of the year 2000 reported the opening of new hotel facilities and an increase of more than 5,000 rooms.
Social housing projects linked to post-Georges reconstruction, on the other hand, were located in El Tamarindo, in the capital, and in San Juan de la Maguana and Bonao, rural or semi-urban areas in the interior of the country that were not part of the private investment circuit that was driving the double-digit growth of the sector.
This territorial distribution reinforced, in practice, the separation between the two economies of the Dominican construction industry at the end of the century: one oriented towards private capital, national and foreign, concentrated in the areas of greater surplus value, and another oriented towards addressing the social emergency, concentrated in the areas of less relative development.
Both were included in the same national statistics for growth in the construction sector, but they responded to completely different logics of investment, financing and location.
At the close of the four-year period 1996-2000, the Dominican Republic could, with good reason, present growth figures in construction that placed it among the most dynamic economies in the Caribbean in that sector.
But that same figure, read alongside the data on social housing production for the period, reveals two parallel stories that are rarely told together: that of the country that was building towers, shopping centers and hotel rooms at a historic rate, and that of the country that was still trying, with comparatively modest resources, to reduce a deficit of 700,000 homes that the very construction boom was not designed to solve.
Sources: Accountability speeches of President Leonel Fernández before the National Assembly (February 27, 1998, 1999 and 2000), published in The Modernization of the Dominican Republic: Memoirs of a Management 1996-2000; National Statistics Office (ONE), publications on the measurement of the housing deficit in the Dominican Republic.
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