Briefing
- Coastal development application volumes remained below pre-2008 levels in early 2011.
- Several major pre-crisis approvals lapsed due to non-commencement of development.
- Tourism arrival numbers showing modest recovery but investment remained cautious.
- NEPA processing pre-crisis applications backlog while new applications remained sparse.
The coastal development sector in Jamaica entered 2011 in a state that mixed stasis with residual activity. The large resort development projects that had been approved in the mid-2000s boom years but had not yet commenced construction when the financial crisis hit were in various conditions: some had been abandoned, their approvals expiring or lapsing through non-commencement; some were being maintained through periodic renewal applications while developers waited for financing conditions to improve; and a few were proceeding slowly with scaled-back financing from developers who had determined that partial construction was preferable to complete abandonment. The planning agencies were, in effect, administering the aftermath of a boom that had not finished occurring in administrative terms even though the market conditions that had generated it had reversed.
The lapsing of several major pre-crisis development approvals was significant as both an administrative matter and a policy opportunity. Approvals that lapsed without commencement returned the land in question to the status of undeveloped coastal land subject to new applications under whatever guidelines were current — the 2012 guidelines had not yet been issued, but the policy conversation about what improved guidelines should contain was underway. For the specific stretches of coastline on which those approvals had rested, the lapse was effectively a reprieve: the development that had been planned would not occur, at least under those approvals, and any renewed development proposal would be subject to current rather than 2005-era assessment requirements.
Tourism’s Modest Recovery
The tourism arrival numbers that were the leading indicator of hotel investment sentiment were showing modest recovery in early 2011 after the significant declines of 2008–2010. Stopover arrivals — the high-value visitor segment — were recovering more slowly than cruise arrivals, which had rebounded faster from the crisis because cruise passengers were less sensitive to the macroeconomic conditions in their origin markets than independent stopover visitors were. The recovery was real but fragile, and investors considering new hotel commitments were watching occupancy rates and forward booking data carefully before committing capital.
The Policy Window
The pause in new development activity represented, for coastal governance advocates, a policy window. The moment at which a boom is over but the next boom has not yet arrived is the moment at which institutional reforms are most achievable: the political economy is temporarily less dominated by investment interests with an immediate stake in minimising regulatory burden, and the failures of the previous cycle are recent enough to provide political motivation for reform. The advocates who were pressing for stronger coastal management guidelines, better beach access enforcement, and more robust environmental assessment requirements were making their arguments in 2011 with explicit awareness that this window would close when investment returned, and that the institutional changes they were seeking needed to be embedded before that happened.
Related: Property Market Analysis | Latest Jamaica News
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