Mudslides during Tropical Storm Philippe this month delivered the latest blow to the Joes Hill housing project at a time when the Social Security Board is struggling to sell the development’s 52 homes.
But SSB officials remained optimistic, telling the Beacon that the buildings themselves weathered the storm unscathed and that remedial works will be carried out soon to stabilise the steep hillsides.
“None of the homes were actually affected from the rains or the floods,” SSB Deputy Director Lorie Freeman said. “It’s mostly what came over into the road.”
And despite a slow start to the sales process, she added, four homes have now been sold and 10 more prospective buyers are seeking financing.
However, many decisions about the project’s future remain in limbo without a full SSB board currently in place to decide the way forward.
The mudslides
As heavy rains pounded the territory during the Oct. 3-4 storm, they carved away large sections of the mountainside directly below some of the newly constructed housing units.
Boulders and dirt tumbled over retaining walls into the development’s winding road, damaging two vehicles parked near the only home with visible signs of occupation.
But other areas weathered the storm with no apparent damage, and the mud and rock were cleared from the road within a few days.
For the SSB, the flood damage did not come as a major surprise, according to Ms. Freeman.
Earlier rains, she said, had shown that remedial works were needed at the estate, which contractor James Todman completed 13 months early and handed over to the SSB in June 2022.
Since the start of this year, the SSB has been seeking a proposal that will include securing the steep hillsides, according to Ms. Freeman.
“We’ve known we would have to heighten some of those [retaining] walls that are aligned to the road, but the walls that are directly behind most of the homes … seem to have did what we were expecting,” she added.
She declined to speculate on how much the remedial works will add to the project’s price tag, which has already cost the SSB nearly $27 million and left it with little hope of earning the seven to 12 percent return it initially sought from the investment.
Proposals
Ms. Freeman added that the SSB will know more after receiving reports from two firms that were solicited to propose a way forward after officials realised around the New Year that loose soil would be a problem.
“Even before the floods, we had studies done — mitigation — because we realised that there [is] loose soil there, so we will have a bit of soil erosion,” she said.
“So we had persons actually looking at the property, but we haven’t received the proposals or the reports as yet. …. We’re trying to go through the procurement policies and procedures: We actually have quotations coming in from two persons to select who we would actually decide on going forward in terms of providing an actual remediation plan.”
The plan, she said, will address soil erosion and other issues.
“There’s a landscaper there in progress as well,” she added. “That’s also part of the plan to sort of keep the soil intact. However, we did realise that we would have to do a bit more based on just speaking to the contractor.”
The contractor, Mr. Todman, declined to comment.
Ongoing troubles
The mudslides were not the first sign of trouble at the project, which has drawn mounting criticism in recent months from opposition legislators and other residents.
As part of its First Time Home Owners Programme, the SSB first announced the development in early 2017 under then-Premier Dr. Orlando Smith’s National Democratic Party-led government.
At the time, leaders suggested that the units would be snapped up by eager first-time homeowners who were unable to find affordable options elsewhere, and the SSB said it expected to see returns of seven to 12 percent on its investment.
But that plan didn’t play out as they hoped.
After officials broke ground in April 2017, construction was delayed when Hurricane Irma hit less than five months later.
In May 2020, the project was relaunched under then-Premier Andrew Fahie’s administration, when the SSB signed a nearly $18 million contract with James Todman Construction Limited as part of the government’s Covid-19 recovery package.
In June 2022, the SSB announced that construction of the development’s 25 buildings had been completed 13 months ahead of schedule.
At the time, officials reiterated their confidence that the homes would sell quickly, explaining that they would be sold only to first-time homeowners who planned to live in the community and who were Virgin Islanders, belongers or 20-year residents.
Few buyers
But after the SSB began marketing the units — at prices ranging from $275,900 for a one-bedroom condo to $625,000 for the largest three-bedroom townhouse — buyers didn’t materialise as hoped.
In fact, they barely materialised at all.
In June of this year, the government relaxed the application criteria to allow non-first-time-homeowners to purchase the homes as rental units. But sales remained sluggish.
In the House of Assembly in September, Health and Social Development Minister Vincent Wheatley provided an update.
Though more than 600 applicants had expressed interest in the homes in the early stages of the project, very few had stepped up to make a purchase, he said, adding that the SSB was unlikely to see a return on its investment.
“To date, two homes have been sold,” Mr. Wheatley said on Sept. 7. “A total of 50 homes remain unsold, and eight applicants are presently in negotiations with the bank.”
Sales up
This month, Ms. Freeman told the Beacon that sales numbers are up since Mr. Wheatley’s statement.
Four units have been sold, and about 10 other prospective buyers are in negotiations to purchase others, she said in an Oct. 10 interview.
The purchased units — which include standalone three-bedroom homes and one two-bedroom home — were sold at full price to first-time homeowners who intend to live on the property, she said.
To help facilitate further sales, at least two Virgin Islands banks are now offering financing up to 100 percent, according to Ms. Freeman. The SSB is not guaranteeing those loans, but it has the right to purchase the units back if the buyer defaults, she said.
“We don’t really consider it a guarantee,” she added. “We have what we call right of first refusal. In the event that somebody is delinquent, we have first rights to regain the property. And that helps us to keep it within the realm of what we are trying to achieve.”
The SSB, she said, is not contractually obligated to purchase such properties.
Far behind
Despite the four recent purchases, Ms. Freeman acknowledged that the SSB is far behind where it had hoped to be on home sales.
“We definitely thought we would have been ahead — quite a bit,” she said. “Much more than that.”
The main obstacle to sales has been prospective buyers’ struggles to obtain financing, according to SSB officials.
“I think when the homes were launched, persons had the wrong impression of … the costing and so forth,” Ms. Freeman said, adding, “When it was initially launched, the costing wasn’t there, so people thought they could just apply. But after the costing came out and persons realised they have to actually qualify via the bank, that changed the dynamics of the public perception in terms of what they thought it was.”
Many prospective buyers, she said, simply couldn’t afford the homes. The current prices were set by the SSB board after consultations with experts, according to Ms. Freeman.
“We went out and I think we got analysis done by various real estate agents from around the territory,” she said.
“That was a main component. We looked at the costs, of course, and some other elements. So there were quite a bit of calculations that were done in collaboration with the experts within those fields. And they came up with the prices.”
She declined to provide the Beacon with this analysis — or with the cost-benefit analysis, business case, or engineering study she said she believes were carried out for the project — but she agreed to seek the SSB board’s approval to release all this information.
“It all depends on if we get approval to give them to you,” she said. “Obviously, there’s no obligation to provide those documents.”
She hadn’t provided the information by Beacon press time yesterday afternoon.
No profit expected
Like Mr. Wheatley, Ms. Freeman acknowledged that the project would not see the return on investment that was initially envisioned.
“Because it’s a work-in-progress property, those figures are still being calculated,” she said. “However, we can see initially we will not actually make a profit on this property.”
She added, though, that the SSB hopes eventually to recoup the money it has spent.
“There’s a commercial property there, which we expect to collect rental income, and over a period of time the intention is to recoup the initial loss,” she said.
She declined to estimate the SSB’s potential losses.
“The numbers are still being calculated,” she said. “Like I say, it’s a work in progress: You’re still spending money there to get some things completed. So the figures will change.”
No ‘actual board’
Now, several decisions on the project’s future are on hold as the SSB board undergoes a transition, according to Ms. Freeman.
Though Chairman Glenroy Forbes — who was appointed for a three-year term in October 2021 — still holds his position, several other board members’ terms expired early this year, and the SSB currently lacks “an actual board making actual decisions,” she said.
Advertisements have been published seeking new members in keeping with the selection method established following the Commission of Inquiry, but Ms. Freeman said she doesn’t know when new appointments will be made.
“The way forward is heavily dependent on the next board and what they decide to do,” she said.
The new board, for instance, will be responsible for deciding what to do if the rest of the homes don’t sell as hoped, she explained.
Possible options include rent-to-own arrangements and other similar measures, according to Ms. Freeman.
She declined to speculate on whether the prices of the units might be lowered in the future.
“Again, that’s all up in the air until we get a next board and it can determine the way forward,” she said.
Management
Other decisions for the new board involve the property’s management, Ms. Freeman said.
Currently, the SSB is managing the development, but it hopes to eventually hand that responsibility over to a housing association once more people purchase homes and move in, according to Ms. Freeman.
Meanwhile, she added, a 2021 request for proposals for a property manager has been “delayed.”
“It all depends on the way forward — whatever happens when a new board comes and decisions that they actually make — but I think the idea is to have the housing association, but have a property manager work along with them,” she explained.
The required monthly fees for the housing association — which include insurance — range from about $400 to $600, according to Ms. Freeman.
Ownership
The homes are currently being sold on a freehold basis, with covenants, so buyers receive outright ownership of the property, according to the deputy director.
Asked if the SSB will retain ownership of the broader development and the commercial space inside it, she said this decision has not been made either.
“Those things are in discussions,” she said, adding, “I wouldn’t be able to tell you exactly what direction we’re actually going.”
Ms. Freeman said the development will be a private community with gates closing off both entrances: one on Joes Hill and the other in Long Bush.
“The intention, really, is to have a security guard there,” she said. “So it’s going to be fully developed: the entire entrance. There’s a complete plan to develop [the area around the Long Bush entrance] in terms of like a roundabout. Even a little park; a parking space; an area for security.”
Asked about a timeline on that plan, she said, “Again, it all depends.”
Currently, the commercial space is also behind the gates. Asked if it will remain gated, she said that decision will depend largely on the interest that the SSB receives from prospective tenants.
“It’s going to be advertised very soon, but it all depends on what the board wants to do when they come,” she said. “But the intention is to start marketing that property.”
‘It’s nature’
The Beacon’s interview with Ms. Freeman was also attended by Roy Barry — the deputy director of the SSB with responsibility for National Health Insurance — who was acting as SSB director in the absence of Director Jeanette Scatliffe-Boynes, who was on leave at the time.
Though Ms. Freeman fielded most of the questions during the interview, Mr. Barry weighed in on the storm damage at Joes Hill.
“It’s nature,” he said. “We’ll do as much as possible to mitigate the mudslides, and hopefully going forward some improvements will be coming soon.”
Marketing plan
For now, Ms. Freeman added, the SSB plans to redouble efforts to sell the homes.
“We have an active campaign plan in terms of public relations and marketing that is in place to happen as early as next week,” she said.
“So you should see a lot more information in the media about the homes, and right now efforts are really trying to get the homes sold.”