Access to safe and affordable housing is critical to Sint Maarten’s goal of building long-term resilience to natural disasters. The devastation caused by Hurricane Irma in 2017 impacted most homes on the island, leaving many houses damaged or destroyed. Under the Sint Maarten Recovery, Reconstruction, and Resilience Trust Fund, efforts have been made to address the housing repair needs of the most vulnerable Sint Maarteners. For example, repairs to 167 homes have been made to increase resilience to future disasters under the Emergency Recovery Project. Home reconstruction under this program will continue in 2021. An additional 182 roofs were repaired under the Red Cross Roof Repair Program, which also trained 60 local craftsmen to construct hurricane-resistant roofs.
However, like many small island states, Sint Maarten still faces challenges in developing a well-functioning housing market with affordable solutions for its people. As many Sint Maarteners know, finding safe housing for an affordable price on the island is a struggle. The housing sector faces many large challenges: scarce land, high construction costs, a growing informal rental market, limited insurance coverage, and buildings that remain in need of repair or retrofitting after the damages caused by Hurricane Irma in 2017. The recently published Sint Maarten Rapid Housing Sector Assessment by the World Bank, financed by the Government of the Netherlands out of the Recovery, Reconstruction, and Resilience Trust Fund, explores some of the market’s key constraints in greater detail and proposes some recommendations summarized below.
Constrained land market
Sint Maarten has a hilly terrain, which is not ideal for development. Large tracts of land are government-owned and under long-term leases, many of which are un- or underdeveloped. Many parcels of privately-owned land have unresolved inheritance issues, further hampering development. In addition, there is no enforced penalty or tax on vacant land, which contributes to land speculation and provides limited incentives for the holders of un- or underdeveloped land to build and increase Sint Maarten’s limited housing stock.
High cost of construction
Construction in Sint Maarten is expensive. Hilly terrain and hurricane exposure require large amounts of concrete, raising building prices. Furthermore, most housing projects are relatively small and lack economies of scale. Construction materials, and also skilled and unskilled labor for large projects, are often imported. Finally, contractors apply high profit margins to compensate for risks related to project financing, delays in obtaining permits, and natural disaster exposure.
Lack of access to finance
The price point of the cheapest family houses for sale in Sint Maarten’s market exceeds US$200,000. Even these “affordable” houses are far too expensive for up to 60% of Sint Maarteners. Many cannot access loans, either because their low, irregular, or informal income precludes any borrowing, or because the loan terms are too steep. Many families’ options are limited to renting or saving money to buy a plot of land and incrementally building their home over many years.
Informal market, little data
There is limited data available on the rental market. However, it is expensive relative to local wages. The smallest quality units in the “formal” rental market start at US$600 per month for a basic studio or 1-bedroom apartment. People renting in informal settlements pay slightly less, between US$300-600 per month for a small plot (with or without a house) depending on location and infrastructure connectivity. Informal settlements in Sint Maarten, locally referred to as ‘shantytowns,’ are growing in number and are home to many low-income households.
Social rental housing
The Sint Maarten Housing Development Foundation (SMHDF) is the only social housing provider on the island. It has not received regular public funding and is struggling to stay afloat. One of SMHDF’s biggest constraints is the restriction on raising rents. Rent levels are typically set upon initial lease signing, and by law cannot be increased until the unit is turned over to a new resident. In some cases, rents have not been increased for 20 years. Consequently, rental prices are far out of line with even the lower end of the market and as such there are no funds for maintenance, resulting in deterioration of properties. Still, tenants often choose to stay for extended periods of time, due to the limited alternatives available in the housing market. Meanwhile, the wait list has increased from 1,500 to 9,000 since Hurricane Irma, and delinquencies are high, a situation exacerbated by the COVID-19 pandemic.