The Construction Economy in Haiti, James Murphy Senior Essay 2011


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Unraveling the web of roadblocks inhibiting a successful construction economy in Haiti.

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The Construction Economy in Haiti, James Murphy Senior Essay 2011

  1. 1. TheBuildingEconomyinHaiti UnravelingthewebofroadblocksinhibitingasuccessfulbuildingeconomyinHaiti JamesMurphy SeniorEssayintheHumanities YaleUniversity Spring,2011
  2. 2.                                                                  
  3. 3.               Acknowledgements     Thank  you  to  Professor  Michelle  Addington,  for  her  guidance.    Thank  you  to   Professor  Norma  Thompson,  Professor  Maria  Menocal  and  the  rest  of  the   Humanities  Department  for  such  an  enriching  major  experience.    Thank  you  to  the   Dania  Foundation  for  giving  me  the  opportunity  to  get  involved  in  Haiti,  for  Father   John  for  kick  starting  my  interest  in  panels,  and  to  my  family  for  supporting  me  in   this  journey.    Thank  you  to  all  the  Haitian  partners  along  the  way,  especially  Baby,   Jay,  and  the  workers  who  worked  by  my  side.    Thank  you  to  the  Credit  Development   Institute.    Thank  you  to  Dave,  and  Jimmy  who  have  provided  valuable  insights.     Thank  you  Haiti  for  opening  your  borders  to  me.    Most  of  all  I  would  like  to  thank   Yale  University  for  providing  me  with  this  extraordinary  education  experience.                      
  4. 4.                                                                  
  5. 5.                     Table  of  Contents       Forward………………………………………………….    1   Introduction……………………………………………    3   History……………………………………………….…...    9   Politics……………………………………………………    17   Economy………………………………………………...    27   Building………………………………………………….    37   Conclusions  and  Going  Forward………………    53                        
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  7. 7. James Murphy | The Building Economy in Haiti 1 Forward My passion is building. I did not always know it, but looking back it seems so obvious. At first, it was Legos, Kinex, and cardboard forts; in high school, tree forts, pottery, and furniture; and at Yale, a new deck at the frat house, a grant to replicate the Morse Lipstick sculpture in Swing Space, and a dock staining and repair business. When I went to Mexico City for Thanksgiving in 2009 I was introduced to Alfonso Serrano, the CEO of Construyendo. Construyendo builds houses for the poor in rural Mexico using volunteer labor. The reason they can build safely with unskilled labor is their building method - a steel frame panel with foam that merely requires assembly and an inch of mortar concrete applied to either side. Construction is cheap, simple, fast, and strong. I was sold. Throughout the year, I established a pretty good working knowledge of the panel system, wrote a few papers on it, and was even working with a company as a
  8. 8. James Murphy | The Building Economy in Haiti 2 broker to sell the panels. That is, until they thought I asked too many questions and dropped me. (I think they thought I was their competition). When disaster struck Haiti, it seemed like the perfect place to implement this building technology and a real opportunity for me to make a difference. I was serendipitously connected with a family foundation (the Dania Foundation) that was working on reconstruction in Haiti. They were working with the same panel system I had become acquainted with and needed someone on the team who knew a bit more about the panels. One resume, two phone calls, and a week later I met the family in the airport on our way to Haiti. What started as an earnest effort to implement a technology to help rebuild a nation turned into so much more. What I have discovered from my time in Haiti, and my research, is that helping Haiti to rebuild is so much more than just building codes, materials, the economy, and the politics. It is all those and more. It would be too simplistic to confine the issues to a few short sentences. Rather, it requires a study of the full picture and an understanding of the linkages. The following pages are my thesis on the building economy in Haiti. I have included my personal story in italics in-between sections, and kept the research in the body of the work. The pictures are mostly images that I, or my friends, took while we were in Haiti. I hope the images help complement my message in a way that helps you, the reader, connect. Working in Haiti is so much more than a formula and checklist; it is about getting down there with the people and helping them rebuild their lives, their families, their homes, and their futures. Haiti is where I will work next year, doing exactly what I love; building. I look forward to sharing my experiences and research with you, and building a stronger Haiti.
  9. 9. James Murphy | The Building Economy in Haiti 3 Introduction I would be dead Mr. Mehu is the president of the APCH, an Association of Drivers in Haiti. On January 12, 2010, he was installing a radio in a car when his world started shaking. “I took 3 steps back to avoid the house and then I fell on my back,” at that moment a masonry fence wall fell on him. “No one was able to help and I looked in every direction and I looked at my hand and realized that my hand was crushed and I made the effort to crawl on the floor, when I looked around and found myself on the floor I could not understand what was going on........... you know...... what I mean ... I am asking myself if what I see is reality.... Because right away I am not realizing what is happening; the whole country is “broken” damaged, dust, and I can’t see anything, it is as if I am in a dream and I could not believe it was reality.” “I couldn’t find anyone to help me at the hospital. We drove around downtown and we still couldn’t find help or a solution. While we were driving around we found a child who was urinating blood so I told the driver to leave Carlos Barria/Reuters via Corbis
  10. 10. James Murphy | The Building Economy in Haiti 4 me and take the child and try and find help for him because I only had a broken wrist. He could come back for me afterwards…The whole day went by and we couldn’t find help, we slept in the car because we had no more home and the homes that were not destroyed everyone was afraid to go inside them. So we pulled down the car seats and slept in the car so we could start our search for help the next day.” “When I finally made it back home I was already told that my house had been destroyed, but I didn’t believe it. I thought that maybe it was only leaning, but it was destroyed. Nothing could be saved except my passport, all the other stuff got damaged even the fridge was totally flattened like a pancake, destroyed. The house was a 2 story and everything was flattened… I lived there for ten years, if I was at home, or in any part of the house, I would be dead.”1  The Earthquake It seems almost everyone in Haiti could share a very similar story. The 7.0 magnitude earthquake that hit Haiti on January 12 killed over 250,000 people, and caused over 120 percent of the nation’s GDP worth of damage; by that standard, it was the worst natural disaster a nation has ever faced in recorded history.2 No one was immune. “The poor construction practices were so pervasive that they even crossed class boundaries — while the poorly-constructed slums collapsed during the quake, so did Port-au-Prince’s luxury hotels and the UN’s AP photo/United Nations AP photo/United Nations Inside Disaster
  11. 11. James Murphy | The Building Economy in Haiti 5 mission headquarters”3 Hundreds of thousands of homes, 60 percent of the country’s hospitals, 80 percent of its schools, and all but one government building were destroyed by the quake; even the presidential palace collapsed. Buildings and the Humanities It can be surprising how often we forget the connection between buildings and the humanities. Buildings correlate to the state of a nation socially, politically, economically, and more. For example, the Sistine Chapel provided the canvas for Michelangelo, the Roman Senate gave the stage for Cicero, and the concert hall gives a venue for Shakespeare and Beethoven performances. Building images characterize currency, postcards, and logos for institutions. On Yale’s campus, buildings determine the status of residential colleges or senior societies. Buildings are an ubiquitous presence in society. At a basic level, they provide us safety and comfort. Buildings also offer a space for thinkers, writers, painters, and musicians alike. Look around us at Yale; these hallowed halls are exactly what allow academic discourse. On another level, buildings reflect the personality of society; take for example the flashy Las Vegas strip reflecting glitz and greed, the gaudy towers of Dubai showcasing excessive wealth, or the lost empire of Rome leaving us with remnants of a fallen empire. Architecture and design can be a hallmark of status while structural integrity might highlight a nation’s prowess and intelligence. In the United States we take for granted the structural integrity of our buildings. We hardly stop to wonder if the building we are about to enter is safe. It Port au Prince- National Palace Las Vegas- Bellagio
  12. 12. James Murphy | The Building Economy in Haiti 6 is so far removed from the cognizant brain to worry about a roof falling on your head, to scrape the wall and wonder if the concrete was mixed properly for the brick mortar, or to wonder if the builders had enough steel to put in the proper roof tie- downs. We lean against the chalkboard fully expecting it to withstand our body weight. Imagine what life would be like if we did worry about the structural integrity of our buildings. What if with each building we entered we had to suppress a wave of fear as we fought flashbacks to a family member buried alive under the roof of our previous home, like Mehu does? What if we knocked on the walls to see if the cinder blocks were filled with concrete or if they merely had mortar on the edges? What if during a storm we had to hold down the roof of WLH and continue class in rotating shifts? What if our buildings were not safe? This is the reality in Haiti. The Research Question This essay will focus on the current state of the building economy in Haiti. Assessing the building economy requires a top-down approach. First, the historical context which has informed the current state of affairs in politics and the economy; second, the political sphere that shapes the law of the land; third, the national economy. Each of these threads has multiple, intricate, implications on the building economy and is not easily boiled down to a few distinct factors. Haiti is shaped by its violent and storied history. The political climate remains volatile and under-serving of the people. As a result, the economy has suffered greatly. The educated and well-off citizens flee the country in what is known as “brain drain,” and the cycle continues. Inside Disaster
  13. 13. James Murphy | The Building Economy in Haiti 7 With over three quarters of the country below the poverty line most Haitians hardly have enough money to get by, let alone enough money to construct safe buildings. Haiti is almost completely unregulated, especially in the building industry. The little resources that the government has are typically spent on law enforcement and public safety. Land rights are unenforced or non-existent and the infrastructure of the city makes transport a nightmare. Day to day operation, transportation, and unexpected delays raise costs and margins considerably. For most, financial loans are nearly impossible to get and reputable construction companies are few and far between. There is little government enforcement of contracts and building codes, not to mention the lack of educated workers with the proper experience to make building assessments in the first place. This combination of low purchasing power, volatile politics and enforcement, and poor infrastructure make for a less than ideal building scenario. The devastation from the earthquake of January 12, 2010 exposed the flaws of the building economy to the world. Strengthening Haiti’s building economy does not have a simple answer, and will require improvements across multiple sectors from politics to the economy. Things need to change in Haiti, for the sake of its citizens and for the sake of the nations prosperity, and the building economy plays a key role. I hope to be able to highlight many of the issues and start to unravel what is a web of roadblocks inhibiting a successful building economy. AP photo/United Nations
  14. 14. James Murphy | The Building Economy in Haiti 8
  15. 15. James Murphy | The Building Economy in Haiti 9 History Land “Gifts” Baby and JP made a right off Delmar 65 down an unnamed road. The turn had been indicated to them by a red shack and garbage pile about 200 feet before the turn. Navigating the road is a bit like trying to guide a marble through a wooden maze avoiding the holes. There are no lanes or rules; people drive on the right side of the road, unless, of course, they decide to drive on the left. The speed limit is usually determined by how much discomfort the passengers can endure. Another twenty minutes down the road and they stopped. Nous y voilà! Baby, the driver says. “We are here.” The reason for this journey goes back a few weeks to February 28th, 2010 when Peter Bak, the Chairman and founder of the Dania Foundation, met with Interior Minister, Paul Antoine Bien-Aimé. JP, as he is affectionately known, had explained his low-income mortgage housing idea and the minister was sold. Bein-Aimé and JP agreed that they should work together to build a housing community with over 6,000 homes consisting of 3 villages on land near Lake Azuil and the border to the Dominican Republic. JP and the minister agreed that JP
  16. 16. James Murphy | The Building Economy in Haiti 10 should first build one house, for approval by the minister, before operating on a bigger scale. The minister said that if JP could find the financing for the first 200 homes, the Haitian government would finance the following 5,800 homes. They land shook hands, and took a picture to commemorate the event. Stepping out of the car spirits were high. JP was about to look out on land that might start the future of housing in Haiti.  History Introduction In order to understand the current political and economic conditions in Haiti it is essential to first understand the nation’s history. The French colonists once referred to Haiti as the “Pearl of the Antilles” because it was the most lucrative territory in West Indies. Today, Haiti it is the poorest nation in the Western Hemisphere.4 Haiti thrived on agriculture and export commodities that are still valuable today such as coffee, sugar, and cocoa. Haiti’s location and climate has not changed in the last 200 years yet the economy has completely polarized. We must turn to history for a fuller understanding of Haiti’s decline. History, Colonization-2011 Christopher Columbus discovered the island of Hispaniola in 1492. Hispaniola (La Isla Española) is the island that both Haiti and The Dominican Republic share. In 1697 Spain ceded the western third of Spain’s Hispaniola to the French, which they called Saint-Domingue (today known as Haiti). For the next 140 years the French ran one of the most lucrative and particularly cruel slave
  17. 17. James Murphy | The Building Economy in Haiti 11 plantations in the world. The French had thousands of plantations: 800 sugar, 3,000 coffee, 800 cotton, and 3,000 indigo.5 Saint-Domingue’s (Haiti’s) exports accounted for 30 percent of France’s GDP annually. 6 Adam Smith, in The Wealth of Nations, asserted Saint-Domingue as "the most important of the sugar colonies of the West Indies."7 By the 1780s, nearly 40 percent of all the sugar imported by Britain and France and 60 percent of the world’s coffee came from the small colony. For a brief time, Saint-Domingue produced more exportable wealth annually than all of continental North America. 8 Slave trade was essential to driving cash crop production. Under particularly harsh conditions the French imported up to 50,000 African slaves annually in order to keep up with the death toll and growth of the economy. In 1789, slaves outnumbered free people 4 to 1 with about 500,000 slaves occupying Saint-Domingue.9 There was a strict hierarchical class structure in place in Saint-Domingue’s society based on skin color, class, and wealth. At the bottom were the African slaves and slightly above them were the Creole slaves, who were born on the island and spoke French-Creole. The next rung was comprised of the mixed-race mulatto slaves. Above them the mulatto free people. At the very top were the whites, with a clear distinction between the shopkeepers and smallholder class (petit blancs) and the high-class plantation owners; wealthy merchants and high officials (grands blancs). 10
  18. 18. James Murphy | The Building Economy in Haiti 12 At the end of the 18th century the class structure began to unravel: slaves ran away and formed militant groups, mulattoes vied for citizenship including the right to own slaves, and the French Revolution was heating up back in France. In 1791, Toussaint Lourverture emerged as the leader of Haiti’s revolution and in 1804 Haiti claimed the title of the first free black republic. The revolution devastated agriculture output. The profit driving returns that slavery drove were gone. While the nation was now egalitarian, the hierarchical system still remained with deep wealth disparities between the freed blacks and mulattoes. Haiti struggled to regain prosperity in its infancy. The nation was burdened with a heavy trade embargo from France as well as bitter inner political struggles that led to territorial partition. In 1825, Haitian President Jean-Pierre Boyer and France negotiated the recognition of The Republic of Haiti as a free nation and the removal of burdening trade blockage in exchange for a debt of 150 million Francs.11 To put the debt into perspective, France had sold the Louisiana Territory in 1803 (an area 74 times the size of Haiti) to the U.S. for 60 million Francs. 150 million Francs accounted for over 5 times the annual export revenue of Haiti. 12 French warships with 150 cannons backed up the debt. While this move helped Haiti secure its political independence, it burdened growth and prosperity for over 100 years. France later reduced the debt to 60 million Francs,12 however, Haiti was a nation born bankrupt. In 1900, some 80 percent of the national budget was put
  19. 19. James Murphy | The Building Economy in Haiti 13 towards debt repayments.13 Money that could have been spent on infrastructure, education, and Haiti’s future, was siphoned to foreign nations. At first, Haiti had a thriving economy under heavy investment from the French. After the revolution, and about 20 years of internal conflict, investment capital was dried up. Haiti was mainly run by the mulatto elites, who were generally former slaves with little education and political experience. The lack of capital from France, as well as an uneducated post-slavery workforce, led to the economic downturn of the “Pearl of the Antilles.” The 19th century was rife with political instability. Coups and assassinations of political leaders were commonplace and the Haitian constitution was abolished and redrafted at will by each successor. The economy remained stagnant as governments repeatedly subdivided land and continued to be burdened by the debt to France. In the early 20th century, economic and political instability left Haiti open to European encroachment, so the United States deployed U.S. marines to the island in order to protect its interests. The U.S. expanded occupation to the whole island of Hispaniola and disbanded the military. During the two-decade occupation the United States stabilized the economy, added roads, installed automatic telephones, built bridges, erected schools, dredged harbors, constructed clinics, and improved other public works.14 The troops left in 1934 but economic advisors remained until 1941 to manage the national treasury. By 1947, the debt to France was paid off and the Haitian economy enjoyed economic growth through the 40’s and 50’s mainly due to infrastructure and improved prices on exports.15
  20. 20. James Murphy | The Building Economy in Haiti 14 Francois Duvalier took power in 1957 under suspicious conditions.16 Duvalier, or “Papa Doc,” as he was known, ran on a platform of pro-black nationalism, strong military support, and state acceptance of voodoo. Nationalist policies were enacted that outlawed non-Haitians from owning land and obtaining dual citizenship. Ever since then, in order to become a citizen of any other country, Haitians must revoke their Haitian citizenship. Duvalier removed the bicameral legislature to replace it with a unicameral one and appointed himself president for life. He created strong military groups for purposes of averting coups and used blackmail and terror to control the citizens.17 Duvalier heavily taxed the citizens to fuel his military and family’s expenses. The government was wrought with corruption following Duvalier’s example; the most notorious of which was the administration’s taxation agency, Régie du Tobac, which had no accounting records. As a result, many Haitians fled the country in a movement that has come to be known as “brain drain.” During that time, both the rich and poor, and educated and non-educated, left for places like the United States and Canada. “In 1969, for example, some observers believed that there were more Haitian health professionals in Montreal than in all of Haiti.”18 Tourism at the time was nearly non- existent. Overall, Duvalier’s policies had extremely detrimental effects on Haiti. The United Nations reports that Haiti was the only country with no real economic growth during the 1950’s and 1960’s while the rest of the world was experiencing its most rapid expansion in history.19
  21. 21. James Murphy | The Building Economy in Haiti 15 “Papa Doc” died in 1971 and his 19-year-old son Jean-Claude Duvalier (“Baby Doc”) took over the country. “Baby Doc” continued many of his father’s practices and saw his nation decline even further. Unemployment was above 30 percent and corruption grew incredibly worse. Drug trade, illegal resale of subsidized oil, rigged lotteries, export of cadavers and blood plasma, skimming of the budget, and much more plagued the nation. As the corruption was uncovered, it was reported that at least 36 percent of government funds were embezzled. Haiti was deemed the most mismanaged country in the region. In 1982, a report was released by Canada categorizing “Baby Doc’s” Haiti as a “kleptocracy.”20 In 1986, Haitian citizens revolted and, along with pressure from the United States, “Baby Doc” fled to France in exile. Post “Baby Doc” Haiti was political chaos. Various military groups were formed and multiple violent political takeovers included assassinations and violence. Under such conditions, thousands of Haitians tried to flee. The U.S. Coast Guard picked up over 40,000 Haitians in 1991 and 1992 and thousands more likely perished at sea.21 “In the summer of 2000, in response to credible evidence of government corruption, election fraud, and widespread human rights violations, Haiti’s foreign donors suspended all development assistance…. So low was confidence in Haiti’s government that only 5 to 15 percent of the electorate is believed to have voted.”22 Violence was rampant and the gross domestic product (GDP) growth turned negative. Riots and rebellions ruled the streets, including those from the police and armed forces. “Responding to an emerging humanitarian crisis, a United States-led Multilateral Interim Force made up of troops from the
  22. 22. James Murphy | The Building Economy in Haiti 16 United States, Canada, France, and Chile, was dispatched to secure Haiti’s ports and restore the flow of food and medical supplies into the country.”23 In April 2004, the UN Security Council adopted Resolution 1542, creating the UN Stability Mission in Haiti (MINUSTAH). The Stability Mission was authorized with 6,700 troops and 1,622 civilian police. Over the next few years MINUSTAH struggled to restore law and order as well as lay the foundation for another election. In 2006, René Préval won a controversial reelection and was in power until the official results announced Michel Martelly’s victory on April 18, 2011. Under Préval’s rule, security remained fragile but improved. Efforts to advance public administration and economic management were gaining traction and the economy was starting to see growth again after many years of decline.24 On January 12, 2010, at 4:53 pm, a 7.0 magnitude earthquake devastated Haiti.25 History Conclusion Haiti’s tumultuous political history has been detrimental to the nation’s development. Poor leadership and circumstances have lead to unproductive policies that have driven away investors as well as some of Haiti’s most qualified citizens. The political climate remains volatile and gets overhauled with each new political regime. The nation was born bankrupt and has suffered from corrupt financial leadership. A lack of economic strength has crippled the nation. Often, poor and destitute citizens resort to violence and crime. The lack of taxable revenue diminishes the government’s ability to keep the peace, enforce laws, and improve infrastructure and education. Education has been a consistent issue of funding and
  23. 23. James Murphy | The Building Economy in Haiti 17 institutional capacity. Currently less than 20 percent of children attend secondary school26 and the nation’s literacy is 53 percent.27 The lack of education limits the number of qualified officials and voters and diminishes the number of skilled workers.
  24. 24. James Murphy | The Building Economy in Haiti 18
  25. 25. James Murphy | The Building Economy in Haiti 19 Politics Political “Gifts” Uncovered JP built the first house after the earthquake in the Concern camp of Tabarre28, and the Minister came out to approve it. In a disappointing realization, this would not be the future of housing in Haiti, just not yet at least. Paul Antoine Bien-Aimé informed JP that their arrangement was not going to work out. On March 31st, 2010 an international donors conference was held in New York City29 and a committee was formed to allocate the 5.3 billion of aid money in Haiti. The committee was called the Interim Haiti Recovery Commission (IHRC)30 and was co-chaired by Bill Clinton and Haitian Prime Minister Jean Max Bellerive.31 Paul Antoine Bien-Aimé told JP that he tried his best, but that jurisdiction over the available financing had been removed from his office with the creation of the new
  26. 26. James Murphy | The Building Economy in Haiti 20 IHRC commission. The approved house JP built, and the arrangement JP and the Minister had worked out, were no longer valid. The flights to Haiti, 24-hour armed protection, a private driver, imported bottled water and meals, days of extreme heat and traveling with no air-conditioning, risking both health and safety, all to figure out that the political landscape had changed and made all the previous efforts obsolete. JP was frustrated and It was time to work directly with the hard working Haitians who needed houses rather than waiting on the “big funds,” to come in.   Politics Introduction Haiti’s tumultuous political history, wrought with corruption, debt, and poor leadership, has led the nation to become the poorest country in the Western Hemisphere today. The political climate shapes the laws and practices for all the land. Laws and political practices surrounding the building economy in Haiti make it difficult for prosperity and investment. Land Rights Official land rights are mostly non-existent; squatters’ rights are the law of the land. Before the earthquake, merely 5 percent of Haiti’s land was properly titled
  27. 27. James Murphy | The Building Economy in Haiti 21 and accounted for in public records.32 Even when deeds are produced, and endorsed by the government no less, there is no guarantee of ownership. "It's very hard to tell who started cheating first," says President Rene Preval. "If you put one after another, all of the titles in Haiti, you will find Haiti is bigger than the United States."33 To make matters worse, thousands of land titles were destroyed in the earthquake, along with the lives of a quarter of the government employees that oversaw the land bureaucracy. Establishing a clear system of land ownership remains a huge challenge for Haiti. Raw from historical mistreatment, land rights policies are focused on preserving Haitian ownership and preventing non-Haitians from exploiting Haitians. However, this poses a serious issue with the Haitian Diaspora by hindering successful Haitians from returning to their homeland to invest. Nationalist political policies prevent dual citizenship. Therefore, Haitians wanting to obtain citizenship in any other country, such as the United States or Canada, must first revoke their Haitian citizenship. “If the new President (Michel Martelly) allows me to get dual citizenship, I will be able to return home and open up a car shop,” says Michel, a family man running a car service in Connecticut, USA. “I hope to be able to take my family back to Haiti.”34 "The disaster has exacerbated land tenure claims and we will see many more. With around 250,000 people dead, inheritance and sale of land after the earthquake raises all sorts of questions: is the property owner dead? are there children entitled to land?"35 How Haiti deals with the issue of land rights will play a
  28. 28. James Murphy | The Building Economy in Haiti 22 big part in the rebuilding process because property and building investment relies heavily on clear and enforced land rights. Enforcement Consistent and fair enforcement and in Haiti is hard to find. Walking with the biggest stick is often better than a signature on paper. Enforcement is more about who you know than what you have done.36 Haiti has one enforcement body, the Haitian National Police (Police Nationale d’Haïti PNH). The United Nations Stabilization Mission in Haiti (MINUSTAH) helps in providing peacekeeping activities, but not in contractual and policy enforcement.37 Like the nation itself, Haiti’s police force (PNH) has suffered from mismanagement, corruption, and lack of funding. Due to the earthquake, about 80 percent of the justice sector was destroyed in Port au Prince. The damaged ranged from the city’s police officers and courts, to prisons and paperwork. After the earthquake, most of the policing and enforcement has been focused on basics and essentials: “establishing and maintaining the rule of law, restoring violence prevention services, protecting vulnerable groups, enhancing democratic processes, and strengthening administrative, government and public services.”38 Landowners in Haiti do not enjoy land tenure security. Insecurity stems from confusing land laws and weak institutions of enforcement. Most land holdings are not covered by updated titles because of the high transaction costs. Furthermore, those with updated titles cannot adequately defend their rights in a
  29. 29. James Murphy | The Building Economy in Haiti 23 court of law due to political instability.39 "The lack of governance makes the enforcement of land rights very difficult, and legal protection is close to zero…Haiti's clogged law courts take on average five years to resolve a case.”40 “Recent research on land conflicts adjudicated by the courts has concluded that the courts are often unable to arrive at a definitive judgment, and that the judicial apparatus is generally unable to enforce its judgments.” 41 “What emerges from field studies is a generalized distrust of the law, and primary reliance on social relations and customary arrangements to ensure access to land.”42 Building Regulations Very few regulatory bodies exist in Haiti, and those that do are underfunded and corrupt. Haiti has building codes, adopted from France and Canada, which are not catered to Haiti’s specific location and materials43. Even though codes exist on paper, it is up to the contractor to follow them. There is no regulatory body that properly oversees construction methods. These issues are present throughout the industry, and not just in the poorest sectors.
  30. 30. James Murphy | The Building Economy in Haiti 24 "So now we need to work with the Haitian authorities to develop a building code that is suited to Haiti and its peculiar conditions."44 “Earthquakes don’t kill people, bad buildings kill them,”45 and Haiti had some of the worst buildings in world. “There are building codes, but in a country that has been ranked as the 10th most corrupt in the world, enforcement is lax at best.”46 Building codes are perhaps not what they should be, but even worse is that the government does not have the institutional capacity or resources to enforce proper codes.47 The World Bank reports that the cost of dealing with construction permits in Haiti is 525 percent of income per capita.48 When building in such a low margin, low-income area, it is very difficult to afford the regulatory practices necessary for proper construction, much less the cost of following those rules. An easy comparison comes from Chile. Chile was hit with an earthquake 500 times stronger than Haiti’s less than two months after Haiti, on February 27, 2010. However, the death toll was less than 1 percent of Haiti’s. What was the difference? There were variations in population density as well as closeness of epicenter, but the key was the enforced building regulations. Chile was hit with a massive 9.5 earthquake in 1960, the strongest ever recorded, and has since developed some of the strongest and best enforced seismic codes in
  31. 31. James Murphy | The Building Economy in Haiti 25 the world.49 In particular a method called, “strong columns weak beams” system, designed to keep buildings upright even under high stress scenarios.50 Implemented technology and engineering such as this is what made all the difference when the ground started shaking.51 Infrastructure The infrastructure and operational cost of doing business in Haiti is unpredictable and relatively high. Corruption leads to a game of bribes. Poor streets, ports, and institutional capacity of the country make transactions unpredictable and costly. Basic amenities are hard to come by or very expensive to use. Haiti is about the size of the state of Maryland. To drive from one end to the other in Maryland takes about 4 hours. In Haiti, it takes two days to travel this same distance. Roughly 100 miles, the drive from the capital to Gonaives takes six to nine hours depending on traffic and road conditions.52 Simple trips of a few miles can turn into hour-long excursions as construction efforts or gatherings of people spill into the streets. There are no enforced traffic laws, signs, or lights. One-way streets quickly become two-way as drivers change direction on a whim. “It is best to allow
  32. 32. James Murphy | The Building Economy in Haiti 26 for at least a few hours leeway for tardiness when scheduling a meeting.”53 The streets alone make business take much longer.54 Most of the country is without sanitation, running water, or electricity. Some of the more affluent areas are able to provide these services, but the lack of a centralized system greatly increases costs. In the nicest areas of Haiti, waste removal is done with septic or holding tanks, water is brought in with trucks, and generators power electricity. At one of the most reputable beach hotels in Haiti, Club Indigo, the trash is thrown into the ocean overnight during high tide in hopes that low tide will sweep it out to sea. During high tide the cleanup crews are busy collecting and re-depositing the trash out further in the ocean.55 “Haiti's infrastructure was among the world's worst even in the best of times,” Raymond Joseph, Haiti’s ambassador to the United States, said.56 Port capacity is back to normal and even functioning better than before the earthquake thank to relief efforts57 but navigating customs remains difficult due to corruption and other inefficiencies of the agency.58
  33. 33. James Murphy | The Building Economy in Haiti 27 Haiti is ranked 162 out of 183 nations worldwide on an “ease of doing business in” scale for 2011 and is ranked last in the Caribbean.59 “A high ranking (low number) on the ease of doing business index means the regulatory environment is more conducive to the starting and operation of a local firm.”60 The index is based on a number of factors from construction permits, to protecting investors, enforcing contracts, getting credit etc. Education Haiti’s 1987 Constitution, which is still in effect today, guarantees free education for all citizens. However this is only a reality on paper. “Although public education is free, the cost is still quite high for Haitian families who must pay for uniforms, textbooks, supplies, and other inputs.”61 Due to a lack of funding from the government, private and parochial institutions make up 90 percent of the primary schools. Both public and private institutions are not well attended with only 65 percent of Haitians attending primary school and a dismal 20 percent moving on to secondary.62 “Few can afford to send their children to secondary school and
  34. 34. James Murphy | The Building Economy in Haiti 28 primary school enrollment is dropping due to economic factors.”636465 The literacy rate is 53 percent66 for the nation, and only 1.8 percent of the population ever attends a university.67 Political Conclusion Haiti has many opportunities and areas for improvement. It is the hope with the newly elected government, official as of April 18th 2011, things will take a turn for the better. New legislature should be passed that is more effective in promoting Haitian prosperity. “Improving legislature will be essential for the stimulation of the economy by private investors…Some local low level politicians cannot even write their own name.”68 Infrastructure needs improvement, as well as the institutional capacity of the country. Nationalistic legislature and the volatile political climate has pushed away and discouraged investment. Moving forward, maintaining security and safe environments for businesses will be essential. There is strong agricultural and manufacturing potential with Haiti’s wealth of resources and close proximity to the United States and other wealthy countries.
  35. 35. James Murphy | The Building Economy in Haiti 29 While many things look good on paper, such as Haiti’s education policy or borrowed building codes, the government desperately needs more taxable revenue and resources to be able to implement policies. Until the wheels of the economy pick up, not much can be done to expand government programs. Haiti’s ambassador to the United States agrees the nation needs to: change laws to allow business investment to flow in, welcome back Haitian natives living elsewhere in the world, and encourage tourism. The chance to reinvent a country that had become the poorest in the Western Hemisphere also represents a chance to flush out crime and corruption, he said. "Sorry for those people who think they're going to be able to do things in Haiti the way they did before…The earthquake has shaken up everything and everybody."69
  36. 36. James Murphy | The Building Economy in Haiti 30
  37. 37. James Murphy | The Building Economy in Haiti 31 Economy Settling In The Dania Foundation’s mission is to empower hard working Haitians and help them rebuild their homes. The idea is not to perpetuate a welfare state, but rather to kick-start a sustainable building enterprise; one that could be mimicked all over the country. Local labor is used whenever possible and the homes are sold at market value in order to keep the private building enterprise in Haiti alive. All profits in the Foundation are returned back to the people through the program. (Although actual profits are yet to be realized). Instead of going through the government, JP turned to his driver, Baby, who works for Mehu. Baby mentioned that he and many of his co-workers were in need of housing and had the income to afford it, so long as they could get financing. Since mortgage financing was still in the works, JP started ahead on building Mehu’s house because Mehu had the financial capacity to purchase the house upon completion. I was fortunate enough to join this team in the middle of the summer when the Dania Foundation was about to start work on the house for Mehu. I met JP, and his
  38. 38. James Murphy | The Building Economy in Haiti 32 children, Eva (26) and Christian (24) for the first time in the Miami airport on the way to Haiti. Eva and Christian were both Phd. candidates at Cambridge University in England, and the CEO and COO (respectively) of the Foundation. I was told I would oversee construction, as “chief technical advisor,” a title I thought was worth more in words than in practice. Until I got there. I was indeed overseeing the construction for the foundation, and along with the help of my father’s construction company on speed dial, I was ready to take on the challenge.    Economics Introduction Haiti has been blessed with an incredible agriculture climate; it is ideal for goods such as sugar, cocoa, mangoes and coffee. At one point Haiti accounted for 30 percent of France’s GDP under harsh slave-plantation farming. For a brief time the production in Haiti even surpassed that of the United States. Unfortunately, Haiti has also been plagued with detrimental financial leadership, both foreign and domestically. France imposed a massive debt and trade embargo in the nation’s infancy that Haiti could not shake for 140 years. The tumultuous political climate has driven away foreign investors and tourism. The hierarchical structure has seen the elites thrive on the oppression of the poor. Political leaders have stolen and squandered billions from the people with little regard for domestic improvements.
  39. 39. James Murphy | The Building Economy in Haiti 33 Haiti has potential for prosperity, but without jobs to keep the wheels of industry churning, the country cannot move forward. In a place such as Haiti, where the most of the economy relies on foreign imports, the low PPP (purchasing power parity)70 of the nation really makes it hard to afford goods. After the earthquake the compassion of the world brought billions of dollars in aid money to Haiti. But that is not what will lift Haiti into the future. The aid money is a good spark to get things rolling, but an increase in employment and industry is what will ultimately put Haiti back on its feet. National Level Industry Haiti is not only the poorest country in the Western Hemisphere, but also the most unequal. It has a Gini Index of 59.2.71 The Gini Index is a standardized measure of income disparity of a nation’s population. A higher number means a greater income gap. Haiti’s income disparity is the seventh highest in the world. The wealthiest 10 percent of the population holds 47 percent of the nation’s wealth while the poorest 10 percent,
  40. 40. James Murphy | The Building Economy in Haiti 34 less than 1 percent72. A mere 5 percent of the nation’s population owns 75 percent of the arable land.73 More than three quarters of the nation lives below the poverty line, with over half the nation in abject poverty.74. Haiti’s Prime Minister said that if his people were living in poverty it would be a gift; Haiti first needs to get people out of misery before they reach poverty. Haiti exports 500 million dollars (US$) worth of goods, and imports over 2 billion dollars worth, annually. Haiti imports almost everything from food and clothing, to oil and cement. Before the earthquake government expenditures were over a billion dollars annually, with revenue of only 900 million.75 As a result, Haiti has had to borrow money from various nations and banks. As of July 2010 the G7 nations (the seven most developed nations) and the World Bank76 have agreed to cancel the debt Haiti owes.77 85 percent of Haiti’s tax revenue came from the decimated Port au Prince area and the area has been slow to recover.78 ` “According to Yale University, Haiti ranks 155th out of 163 countries when it comes to general environmental degradation, while the bordering country, the Dominican Republic ranks 36th.”79 Less than 3 percent of Haiti is covered by forest, as compared to over 60 percent less than a century ago. As one crosses the border Haiti on the left | Dominican Republic on the right
  41. 41. James Murphy | The Building Economy in Haiti 35 into the Dominican Republic the “moonscape” that is Haiti disappears into lush forests.80 Individual level On an individual level, most Haitians have very little formal education. Less than 20 percent finish secondary school and only 1.8 percent of Haitians have graduated from a University.81 80 percent (the highest percentage in the world) of the nation’s educated workforce now lives abroad. 8283 About 50 percent of the economic revenue is driven by the service industry, another 30 percent in agriculture, and about 20 percent in manufacturing.84 Agriculture employs over two thirds of the work force, mostly on small-scale subsistence farming. However, approximately three quarters of Haitian citizens rent or live on land they do not own; as the wealthy top 5 percent owns most the arable land.85 The service industry employs merely 10 percent of the working population but takes the largest share of the economy mainly due to relatively wealthy foreign visitors and the high cost of fuel. Most of Haiti’s exports come from the apparel sector, which accounts for one-tenth of the nations GDP.
  42. 42. James Murphy | The Building Economy in Haiti 36 Remittances (regular monetary transfers from family or friends abroad) make up 30 percent of an average household’s income.86 Remittances equal nearly 20 percent of GDP (more than twice the earnings from exports) and account for half of the nation’s tax revenue. Accurate data on employment is hard to find. For example, the CIA world factbook uses the phrase, “widespread unemployment and underemployment”87 in place of a statistic. Formal employment accounts for a mere 5 percent of the workforce.88 Unemployment is estimated to be around 30 percent with an additional 30 percent categorized as underemployed.8990 Most of the economy functions in an informal, unregulated, marketplace.
  43. 43. James Murphy | The Building Economy in Haiti 37 Finance The real spark that every successful economy has is financing; the ability to borrow money now, in order to generate more in the future. Every successful nation has mortgage and lending systems. It is crucial to homes and businesses alike. Without an economy and jobs, a financial system cannot succeed. As the United States has seen recently with the housing crisis, mortgages and credit extensions are essential to a vibrant building economy. Amid political uncertainty and such economic stagnation as found in Haiti, it is very difficult for banks to extend credit. “Banks in Haiti simply lack the tools to analyze risk. They offer credit only to fail- proof enterprises, which are few and far between – or worse, to friends and family. They neglect the difficult credit segments if only to avoid the arduous work of analyzing risk... The credit system remains largely underdeveloped with credit available to only but a few privileged individuals and corporations.”91 Less than 1 percent of the loans made to households are done through banks.92 There does not seem to be much movement against
  44. 44. James Murphy | The Building Economy in Haiti 38 this trend. In fact, banks have reduced their housing loan portfolios by 9 percent since the earthquake.93 Banks are highly liquid, but function more as piggy banks with little incentive to lend. “Even the leading lender for housing (SOGEBEL) probably grants less than 100 mortgage loans per year. Because banks fear risks in housing lending, terms and conditions are stiff and transaction costs high… Whether they wish to or not, households have been forced to adopt the traditional approach and make housing acquisition a very long-term, phased, and self-financed process.”94 Whether it is an issue of poor client base, or the banks lacking the tools to properly asses the credit risk, or both,95 there do not seem to be any incentives for banks to change their lending practices without significant changes in political stability, growth in the economy, or subsidized lending programs. Economic Conclusion Haiti has very low employment, production, and education numbers. These numbers have a very tangible effect on the building economy. Haiti imports nearly everything for their buildings (oil for energy, cement for concrete, steel for rebar, screws and nails, heavy machinery, etc.). With such a low purchasing power relative to the world, Haiti has to pay relatively high prices for goods,96and these high prices
  45. 45. James Murphy | The Building Economy in Haiti 39 suck up the already depleted resources. The United States has a PPP per capita of $47,000, the Dominican Republic $8,600 and China $7,400; Haiti’s PPP per capita is a mere $1,200.97 This means that on average the citizens of the Dominican republic (the nation on the same island) have the resources to purchase over 7 times the amount of goods, on an international level, than Haiti can. The purchasing power of most of Haiti’s citizens lies below the poverty line, making it is hard enough for them to feed their family, much less afford the imported goods for a house.98 As it stands today, the local agriculture economy is shattered having had to compete with foreign subsided rice and other products.99 With large unemployment and underemployment numbers, Haiti has an overwhelming excess of labor. However, high infrastructure costs make it difficult for Haiti to compete with places such as China and Mexico in manufacturing and agriculture exports.100 There is a large market for Haitians to compete domestically, and internationally, in the manufacturing and agriculture industries, but the investment capital is generally not available.101
  46. 46. James Murphy | The Building Economy in Haiti 40 The forests have been devastated with little naturally occurring resources left. Even though Haiti’s climate remains ripe for agriculture, and the population ready to work, the investment capital is reluctant to invest in such a politically volatile, and unpredictable, economy. The financial credit sector offers very few options to the masses and remains a small player in the economy. High remittances are an indicator of the strength of Haiti’s large Diaspora community in Canada and the United States. This is a community that could provide much of the needed expertise and human capital should the political and economic conditions make it attractive for return. However, as Jimmy Toussaint notes, “if Haiti made it attractive for the Diaspora’s return, all the political and economic leaders would be out of a job… because the there would then be smarter and wealthier candidates.”102
  47. 47. James Murphy | The Building Economy in Haiti 41 Building He sold us; we were in and ready to go In an informal economy, it seems recommendations are crucial. The Dania Foundation took the recommendation of our good friend and bodyguard, Jay, when looking for a builder to partner with. Jay introduced us to Phillip. Phillip had been educated in the United States and had worked construction for ten years before returning to Haiti to continue his career. He spoke great English, Creole, and French. During Phillip’s interview we explained that the mission was to empower hard working Haitians to get into homes. We were trying to implement efficient, low- income housing, coupled with a new mortgage system. In order to do this, we needed a partner, of sorts, that knew the local building economy and that could open his books to us in order to create the best pricing program for the Haitian people. Phillip was totally on-board. The next day he took Christian and me on a tour of his operations. We saw his head office and talked to the two administrators in charge. This is where he processed the orders and hired employees. He had housing plans and employment paperwork as well as a construction company certification,
  48. 48. James Murphy | The Building Economy in Haiti 42 albeit two years outdated. When Phillip stepped out of the office I asked the men who worked in the office full-time who the boss was; the “big” boss. They both assured me that Phillip was in charge of everything. Afterwards, we made our way to Phillip’s block making factory where he churned out hundreds of cinder blocks a day. Making materials in house would be key for assuring our supply chains and the best prices possible. I stepped into the office while no one was looking and asked the large man at the desk with sunglasses who the boss was, and he replied it was Phillip. The man gave me his card and we shook hands. After the block factory Christian and I saw Phillip’s iron welding shop where they produced doors and windows. Around the back was his fine woodworking shop where he made cabinets and furniture. Phillip gathered together about 30 men and Christian explained the mission of the Dania Foundation, in French, and how we hoped to work with the men. The men were anywhere from 15- 60 years old and all eager to work with us. They asked when we would start and how much we would pay. Neither of those questions had immediate answers, but we told them we would try to get things going as soon as we could. Next we took a quick peek into his showroom of custom metal sculptures and carvings. Here he would do plaster and crown molding interior and exterior work: mirrors, doors, windows etc. The final stop was Phillip’s house. He showed us an amazing three-story house with custom woodwork and architecture details beyond much of what I had seen in Haiti so far. There were flat screen TV’s and music blasting. We met his brothers and kids who also stayed with him. Phillip told us he built the house in a few months because he had his crew working day and night. He sold us; we were in and ready to go. 
  49. 49. James Murphy | The Building Economy in Haiti 43  Introduction Haiti’s political and economic history has paved the path to the current state of Haiti’s building economy. In the next section I will attempt to highlight day-to-day situation in the building economy. Household Industry Makeup The Building sector remains largely informal and basic; rarely are the bare essentials met for most families. To give an idea of the amenities makeup of households: 31.4 percent of all Haitian households have access to some form of intermittent electricity, 11.8 percent have water at home (by home or courtyard tap), 7.6 have individual bathing facilities, 21.5 percent have a WC or residents-only latrine, and 18.7 percent have some form of fan for cooling.103 There is a set terminology to define kinds of houses found in Haiti. These include very basic structures such as kay atè, which resemble tents with the roof and walls combined, made with straw, thatch, or palm leaves. Taudis are more typical rural slum housing, made of waste and recycled materials with earthen floors and a mixture of sheet metal, block, wood, clay, sticks, twine, and fabric. Ajoupas are rural huts similar to, but more rudimentary than, Taudis. These first
  50. 50. James Murphy | The Building Economy in Haiti 44 three are for the poor and extremely poor. The more advanced construction methods include: maison basse, a single story house usually made with block masonry, multistory masonry (maison à étage), apartment housing, and colonial and villa style masonry. As detailed in the chart, the vast majority of dwellings (80 percent) are made with masonry and 72.5 percent are single-story. The Majority of houses in Haiti have two rooms and at least four occupants. The average persons-per-house is 4.7, compared to the United States’ average of 2.6.104 It is considered “crowded” by U.S. standards if the number of persons in residence exceeds the number of total rooms, and “over-crowded” if the number of persons in residence is 1.5 times the number of rooms. The average persons per room in Haiti is 2.2, more than twice the standard “crowded” limit. Destruction of the Earthquake About 105,000 homes were totally destroyed, and more than 208,000 damaged, by
  51. 51. James Murphy | The Building Economy in Haiti 45 the earthquake. 1.3 million Haitians have had to move into temporary shelters. Housing suffered the most damage of any sector from the earthquake.105 Tent cities now fill every public space in Port au Prince, from the parks to the street medians. Rubble fills the streets and lots where houses used to stand. It is common to see tents erected on top of, or in the rubble of, what used to be a house. The earthquake destroyed some 30,000 commercial buildings and 180 government buildings.106 “This has hindered the operations of an already ineffective state; surviving ministers and civil servants have been forced to work from makeshift premises, sometimes outdoors.”107  Down to Business I was in charge of overseeing much of the construction process, and I sat down to have a meeting with Phillip to go over his itemized bid. In the first meeting I had with Phillip he threw a round number at the problem. I had sent him away asking him to return with an itemized bid for the foundation and home. In this meeting he presented me with a cost and labor breakdown of $3,000 for the foundation and another $9,500108 for the house. During our conversation I asked where he factored in overhead and the depreciation of his capital expenses, such as shovels, mixers, trucks, and buckets. The concept seemed foreign to him, but after I explained it he agreed it would be good to factor those in.
  52. 52. James Murphy | The Building Economy in Haiti 46 Phillip also met with JP to discuss long term plans for the future of Haiti’s building economy. During this meeting Phillip talked to JP about his own financial situation and mentioned that he needed an advance of $1,000 to cover some personal expenses. It was agreed that the $1,000 would be given as an advance payment, and would come out of the $3,000 that was owed for the foundation work.  Construction Labor Force In an economy with excess labor, there are many people vying for jobs as well as many construction “companies”109 willing to take on the task of construction. Builders are consistently undercutting each other’s bids in order to secure jobs since some work is better than no work. Often the margins are so tight that profits are not realized, especially with the, “costs of housing construction steadily rising for all types of housing.”110 As the economic studies show, most clients do not have much excess capital, if enough at all, to dedicate to building. “Financial resources of consuming households were very tight, and savings minimal.”111 Therefore, price becomes the main consideration when reviewing bids. Constraints on resources make cost- cutting a priority. “This pushes house construction into the informal sector with modest (if any) inputs from architects and engineers, cheap and variable
  53. 53. James Murphy | The Building Economy in Haiti 47 construction materials, and work entrusted to building foremen with on-the-job experience rather than to fully qualified technicians and professionals.”112 Commercial housing and construction capacity was limited before the earthquake. About 400 construction companies were registered with 75 percent of those companies containing less than 5 employees or less. Unregistered and informal teams provided most of the construction.113 “The people tend to do whatever they want to do. If I want to build my house, I can just go and do it,”114  Onsite The first day Phillip showed up with his crew to lay the foundation was the first day Phillip had ever been to the site. Traditionally, a construction company visits the site to survey the topography and other variables long before they give a bid. That would have proved helpful in this case. First there were squatters, who Phillip had to pay to vacate the land, and next a 2-foot deep layer of trash. Much to chagrin of the crew, the back part of the land had been used as the community toilet for the last few months. The first week of construction was spent vacating the area of squatters, and
  54. 54. James Murphy | The Building Economy in Haiti 48 digging through the trash in order to get to soil that was suitable to lay a foundation. The construction site was not what I was used to from working on sites back in the States. The men took the public transportation to the site, known as “tap-taps” and arrival varied from 7-9am based on a number of factors. Many of the employees were hired off the street from the local neighborhoods. The materials for the foundation were strewn about, and a neighbor was paid to keep watch overnight and prevent theft. Rebar would sit out and had started to rust, and the aggregate was dumped onto the dirt road and left uncovered until needed. Since the labor was employed from the local neighborhood, turnover was happening each hour as workers left or were fired. Phillip and his other foreman drank Prestige, a Haitian beer, while they worked. My first thought was to reshape how the operation was run. Construction conduct was inefficient and careless. The people digging the trenches for the footer were putting the excess dirt onto a pile next to the hole they were digging. Dirt would slide back into the trench as it was dug. That pile was then shoveled into a wheelbarrow and dumped at the front of the property. Soon the front of the property had a mound of dirt and trash 4 feet high that everyone had to climb over every time they moved anything in and out of the site. There were 30 guys running around getting in each others way, stepping on and packing down earth that needed to be moved again, and shoveling the same dirt 4 or 5 times. I did not want to say anything for fear of disrupting another culture’s way of constructing, and being sees as intrusive. After all, I figured, we were under contract and it did not matter how they accomplished the job, so long as it was done.
  55. 55. James Murphy | The Building Economy in Haiti 49 Rebar cages were placed into the trenches and sub-footers were poured. It was a constant battle between the laborers who were hand-mixing and myself about the consistency of the concrete. Those who were mixing were calling for more water to make the concrete easier to work; I was calling for less water to maintain the strength of the concrete. It would happen the way I wanted it when I was looking and the way they wanted it when I walked elsewhere. Phillip had no authority over what the mixture was.  Construction Methods “Budget savings may have been achieved in construction prior to 12 January, but too often by shortchanging quality and safety, with disastrous consequences.”115 Demand for housing remains high, and supply low. This might then seem like a promising market opportunity, and it is. However many of those on the demand side do not have the resources to afford the price the supply side offers. In order to bridge this gap, construction companies cut costs as often as they can. Contractors cut costs in hiring less skilled labor as well as using substandard or inadequate amounts of materials. In this section I hope to highlight some of the methods and practices of cost cutting. A recent OAS116 report detailed an array of flaws in Haiti’s method of construction: weak or missing reinforcement, structures on steep slopes with
  56. 56. James Murphy | The Building Economy in Haiti 50 unstable foundations, inadequate or nonexistent inspections, poor designs, materials, and techniques.117 The lack of regulatory bodies within the construction sector allowed the unsafe, cost cutting, methods to pervade the industry.118 To cut costs many companies resort to practices such as straightening used rebar, using less rebar,119 putting sand in the cement bags,120 using homemade blocks,121 adding more water to the concrete, using un-washed aggregate, using beach sand with high salt content or even dirt and dust in as aggregate in the
  57. 57. James Murphy | The Building Economy in Haiti 51 concrete.122 Buildings are built without engineering advice or specific plans, as all of that takes time and money.123 Often homes are built on steep slopes (because the land is cheaper) without proper foundation work.124 Local, unskilled workers are used to cut down on transportation costs and foreman presence is sporadic in order to reduce oversight costs and to fit more projects in the schedule.125 Further, workers themselves are generally trying to build their own houses and skim materials off shipments for private use.126 These destructive methods have become such a part of industry norms that even some of the educated architects are proponents.127 Cameron Sinclair, executive director of Architecture for Humanity, said that design and construction were far worse in Haiti than in other developing countries
  58. 58. James Murphy | The Building Economy in Haiti 52 he had visited. “In Haiti, most if not all of the buildings have major engineering flaws,”128 “It is mind-boggling,” says Farzad Naeim,129 “All the attention to earthquakes right now, in six months, is going to dim. I am practicing now in a field where the cure is known. It is not rocket science, but people go back to building the buildings that killed people.”130 "They are setting themselves up for the next devastating disaster,"131 and that disaster could be right around the corner, with annual hurricanes and Haiti’s location on the Enriquillo-Plantain Garden Fault. A fault that did not fully give way in the January 12 earthquake, scientists say. The strain still remaining in the fault is sufficient "to be released as a large, damaging earthquake during the lifetime of structures built during the reconstruction effort,"132    A Family Would Build their life on the Concrete I Just Poured Construction was incredibly slow. In the United States, a foundation of this size would be poured in one or two days, however we were two weeks in and still yet to pour the slab. As things progressed Phillip started showing up less and less, and would blow off meetings with us at night to go over expenses. Materials were running low and Phillip needed to order more rebar, concrete,
  59. 59. James Murphy | The Building Economy in Haiti 53 and aggregate. Phillip mentioned he needed more money than the initial down payment because his finances were tight. JP took out the remaining $2,000 and sent it with our driver out to the site. The money was to be handed to me so that I could pay the suppliers and workers in person in order to keep things moving. Our driver, Baby, had become very close with us over the last few months and was a trustworthy carrier. The traffic was bad that day and Baby was late for his son’s parent-teacher conference at school. When baby got to site, Phillip was out front and convinced Baby that he would bring me the cash. In a hurry, Baby handed it over and took off. Phillip also took off. The next day we called Phillip from the site in the morning and he said he was ten minutes away, but never showed up. We were on a schedule, and once the footers were poured and the forms put up we were ready to pour the slab and we decided to move on without Phillip. This is where we really started to uncover what had been going on. When Christian and I went to the local hardware store to buy concrete and rebar, the shop owner said we owed him money. Of course we had never even met this guy before so we thought it preposterous. Sure enough, all week Phillip had been charging the materials to “le blancs,” the whites. We were the only people building anything in the area, and certainly the only white people. As we soon found out, we, “the whites” had charges all over the neighborhood that we were unaware of. The cement guy to the left, the rebar guy to the right, the aggregate supplier from Port au Prince, and all of the workers needed to be paid. Phillip had given them some money; it seems he gave them just enough to make each believe they would see full payment later.
  60. 60. James Murphy | The Building Economy in Haiti 54 It is still unclear exactly what happened with all the money. In review of his receipts, it seems he was on the hook for more materials than were at the site. It was also discovered that materials were disappearing over night. Along with that, an 18” footer turned into a 36” footer because of the nature of shovel digging. The 4”-6” thick slab ranged from 4”-10” thick because of the nature of grade spread by hand. Phillip had completely under bid the project. He was in over his head to begin with. It turns out Phillip was in fact primarily a political candidate, and the construction company Phillip told us he owned? That was not really his at all. Phillip tried many methods to get himself out of the mess, one of which involved trying to turn the workers against Christian, Tristan and I. One afternoon, Phillip told the workers that we had the money to pay them for the last two weeks worth of work, and then hurried off and left. The end of the day was a bit tense when thirty Haitians gathered around, expecting payment for two weeks worth of work. They needed to feed themselves and their families, they were upset, and rightly so. For a while it was a bit unclear how things would turn out. The crowd gathered around us with heated voices as Christian, the only one of us who spoke French, vehemently explained that we did not have their money and that Phillip had been given over $4,000 to pay them. After a time, the workers understood; one man was crying because he would have to go back to his family empty handed yet again that night. Given all of this, we pushed through. Through negotiations, long hot and sweaty days, and sheer perseverance, the foundation was finally poured! It took over six weeks from when I first arrived in Haiti to get everything together and finally pour a foundation.
  61. 61. James Murphy | The Building Economy in Haiti 55 On the two-hour car ride home, I shed a few tears thinking about the family that would live on the concrete I had poured. Someone would build a life, a family, on the work I had just completed. It was all worth it, I can tell you that.  Building Conclusion "Maybe your child marries and they need a place to be for them and their husband. You can build just a room on the roof of your house and put a tin roof on it… Then when you have more money you can add more rooms or finish the entire floor and create a new roof for the building. That is what we did at my house. We added some rooms and a new roof to our house."133 The result of these construction mentalities and methods leads to a structure built with no adherence to code, little oversight, and reduced quality and quantity of materials. “The poverty in Haiti lends itself to people building where they want, how they can”134 The situation was brought to the forefront after the January 12, 2010 devastated the region. The earthquake was bad in its magnitude, but devastating in its affects because of poor construction. "You could tell very easily that these buildings were not going to survive even a [magnitude] 2 earthquake."135 As Haiti rebuilds, most are reconstructing using former building tactics; the same methods that caused the catastrophe. In a turbulent world, with a new
  62. 62. James Murphy | The Building Economy in Haiti 56 earthquake, tsunami, or hurricane popping up every few months, Haiti must reform its building practices to ensure safety. With construction costs now rising as much as 25 percent136 and the economy devastated, the need for cost-effective, and sound construction technologies is more apparent than ever.
  63. 63. James Murphy | The Building Economy in Haiti 57 Conclusions and Going Forward The contract was never honored Negotiations ensued with Phillip about how to cover the costs of the construction. All parties involved were brought it, including Jay, our bodyguard and local police chief. Phillips’s new position was that I had made changes to the plans that cost thousands of extra dollars. Since Phillip made his position clear that was his issue, I spent three hours covering the entire process with him. I took responsibility for changes I made, and he took responsibility for his. At the end of the discussion he agreed to, and signed a contract, that held him responsible for all the costs of construction (on the order of $2,000). The contract was notarized by his own lead foreman. For my part, I agreed to take on the added expense of a few extra rebar I requested for additional wall tie downs, on the order of twenty dollars. The contract was never honored. Phillip never paid his suppliers or workers. JP decided that the last thing the foundation wanted to do was put out the very people we were trying to serve, and paid in full all our workers and suppliers.
  64. 64. James Murphy | The Building Economy in Haiti 58  Conclusion Haiti’s history has been violent, volatile, and impoverished. This has certainly led a variety of political and economic issues: the political sphere lacks stability and the resources to enforce its laws, leaders have been self-serving, and the nation’s lack of education has reduced the quality of candidates and electorate, the economy of the country has been burdened by debt and natural disasters, lack of investment capital, and lack of skilled labor. The building economy is heavily informed by the surrounding political and economic circumstances. However it would be too simplistic to confine explanations of Haiti’s building economy to these factors. Social and political problems exasperate the poor economic performance. As does the poor economic performance deteriorate the political and social climate. Poverty is the root cause of political, and economic underdevelopment, and increases the volatility of politics, and weakens the Haitian state. This economic weakness contributes to corruption, gang violence, and drug trade. The political weakness allows such activities to flourish and the state to further deteriorate. To make matters worse, most of those that get educated and become successful leave the country. To put it simply, there are no straightforward causes or easy answers to the issues surrounding the building economy in Haiti. I hope I have been able to shed some light on the complexity of the issues and the web of roadblocks inhibiting a successful building economy.
  65. 65. James Murphy | The Building Economy in Haiti 59 Going Forward In proposing things for the future of Haiti, I see two ways of thinking about solutions: from the top down and from the bottom up. The top down approach requires an assessment of the most pressing macro issues, and attempting find solutions. For example a priority list might include; policy reform to ease the cost of doing business, eradication of corruption, infrastructure improvement, and cost effective building code oversight. To prioritize and propose specific solutions goes beyond the scope of this essay, but I hope that by shedding light on the issues, one might be able to consider what might be done. The bottom up approach would address the issues with buildings by attempting to provide a building solution, technology, or method that would work within the current political and economic state of Haiti. For example: pre-fabricated houses with structural engineering “built in” to the design or the distribution of a simple manual with safe building techniques that the common man could understand. I think ultimately the best solution will come from both ends. Political and economic changes will not happen overnight, but the immediate need for housing should be addressed. We need to try to provide safe, affordable, housing options and methods that work within the current system, while at the same time working towards the system’s improvement. Haiti has so much potential, and I see a bright future ahead.  
  66. 66. James Murphy | The Building Economy in Haiti 60 Finishing the Job A Dominican Republic construction company handled the assembly of the house. The company, M2, came recommended by an American contractor by the name of Richard. A foreign company was required because the construction method was a very specific paneling procedure, which required specific training. The idea was to bring in the Dominican Republic Company to teach and train local construction companies how to work with an alternate material so they too could use it in the future. The process was again, painfully slow. Workers sometimes did more harm than good; all it took was one guy to use the counter as a cutting board for the tiles to break and have to redo it all. Shipments of materials arrived late, incorrect, or not at all. In the end perseverance won out. In October 2010, a full four months after breaking ground, the keys to an 860 sq foot house were handed over to Mehu. The design started on my pad of yellow lined paper, and now stands as a home for a family. I would feel safe standing under that roof through an earthquake or hurricane, and it is my sincerest hope that Mehu’s family feels the same way. Although I certainly cannot take credit for overseeing the full completion of the house, (indeed it was completed while I was at school) this is my proudest accomplishment to date. I thank you for reading and letting me share this experience with you.
  67. 67. James Murphy | The Building Economy in Haiti 61
  68. 68. James  Murphy  |  The  Building  Economy  in  Haiti       1   Works  Cited     Books  and  Articles     Associated  Press  ,  Haiti's  ambassador  to  U.S.  says  earthquake  gave  country  much   needed  attention,  April  07,  2010,     Keith  Crane,  James  Dobbins,  Laurel  e.  Miller,  Charles  P.  Ries,  Christopher  s.  Chivvis,   Marla  C.  Haims,  Marco  Overhaus,  heather  Lee  Schwartz,  Elizabeth  Wilke,  Building  A   More  resilient  Haitian  State  (Santa  Monica,  CA:  RAND  Cooperation)  2010     CIA,  The  World  Factbook,  Haiti,  April  6,  2011­‐world-­‐factbook/geos/ha.html     Bob  Corbett,  Education  and  Adult  Literacy,  Issue  Papers,  7  February  2003,   http://www.hartford-­‐     Environmental  Performance  Index,  country  scores,  2010,     Henry  Fountain,  Flawed  Building  Likely  a  Big  Element,  January  13,  2010,     Homeland  Security  Newswire,  Engineers  urge  overhaul  of  Haiti's  archaic,  anarchic   building  practices,    26  January  2010,­‐urge-­‐overhaul-­‐haitis-­‐archaic-­‐ anarchic-­‐building-­‐practices?page=0,1     International  Finance  Corporation  and  the  World  Bank,  Ease  of  Doing  Business  in   Haiti,  Doing  Business,  2011­‐with-­‐ licenses  
  69. 69. James  Murphy  |  The  Building  Economy  in  Haiti       2     Paul  Farmer,  The  Uses  of  Haiti  (Monroe,  Maine:  Common  Courage  Press  2005)     Pascal  Fletcher,  Haiti  port  capacity  boosted,  repairs  advancing,    February  24,  2010 vancing/2608592/story.html     Philippe  Girard,  Haiti,  The  tumultuous  History-­  from  Pearl  of  the  Caribbean  to  Broken   Nation  (United  States:  PALGRAVE  MACMILLIAN  2010).     Melissa  Lafsky,  The  Power  of  Building  Codes:  Chile  Death  Toll  Less  Than  1%  That  of   Haiti,  2010  The  Infrastructurist­‐ power-­‐of-­‐building-­‐codes-­‐chile-­‐death-­‐toll-­‐less-­‐than-­‐1-­‐that-­‐of-­‐haiti/     Melissa  Lafsky,  Earthquakes  Don’t  Kill  People…Bad  Buildings  Do’:  More  on  Haiti’s   Building  Codes,  January  20,  2010  ,­‐dont-­‐kill-­‐peoplebad-­‐ buildings-­‐do-­‐more-­‐on-­‐haitis-­‐building-­‐codes/     Library  of  Congress  ,  Federal  Research  Division  Country  Profile:  Haiti,  May  2006       Alexis  Madrigal,  Can  Haitian  Homes  Be  Built  for  Resilience  and  Hackability?  January   25,  2010,­‐haitian-­‐homes-­‐be-­‐ built-­‐for     Katie  McKenna,  Haiti’s  History,  2011­‐ quake/haitis-­‐history     Katie  McKenna,  Transformations,  Inside  Disaster,  2011     News  Wires,  G7  nations  vow  to  cancel  Haiti  debt,  07/02/2010,­‐g7-­‐nations-­‐vow-­‐cancel-­‐haiti-­‐debt  
  70. 70. James  Murphy  |  The  Building  Economy  in  Haiti       3     Okey  Oneyegbule,  Operating  Model,  Credit  Development  Institute,  2010­‐model/     Organization  of  American  States,  2011,     G.  Smucker,  ,  T.  Anderson  White,  and  Michael  Bannister  (2000).  Land  Tenure   and  the  Adoption  of  Agricultural  Technology  in  Haiti,  International  Food   Policy  Research  Institute.     U.S.  Census  Bureau,  State  and  County  Quick  Facts,  04-­‐Nov-­‐2010,     U.S.  Department  of  State,  Bureau  of  Western  Hemisphere  Affairs,  December  7,  2010   U.S.  Geology  State,  Magnitude  7.0  -­  Haiti  Region,  Page  Last  Modified:  February  22,   2011 hp     USAID,  Housing  for  Haiti’s  Middle  Class,  Post-­Earthquake  Diagnosis  and  Strategy,   (Nathan  Associates)  Final  Report,  29  September  2010     Tom  Watkins,  Problems  with  Haiti  building  standards  outlined,  CNN  World,  January   13,  2010,­‐01-­‐ 13/world/haiti.construction_1_building-­‐code-­‐haiti-­‐earthquake?_s=PM:WORLD     World  Focus,  Haiti’s  Poor  Infrastructure  accelerates  heavy  death  toll,  2010,’s-­‐poor-­‐infrastructure-­‐accelerates-­‐ heavy-­‐death-­‐toll/9256/     World  Food  Program,  President  Bill  Clinton  On  School  Meals,  Apr  14,  2011,  
  71. 71. James  Murphy  |  The  Building  Economy  in  Haiti       4       Primary  Sources     Michel  Adolphe,  in  person  interview  by  author  in  CT,  USA,  March  2011.       Jay,  in  person  interview  in  Haiti,  July  2010     Jimmy  Toussaint,  in  person  interview  by  the  author,  March  2011.     JP  Bak,  in  person  and  phone  interviews  by  author,  summer  2010.     Mr.  Mehu,  in  person  interview  by  Jamil  in  Haiti,  October  2010.  Full  transcript  can  be   found  at