Marching For Affordable Housing

On Tuesday 19 July, a group called Families United In Action is organising a march on the House of Assembly to protest the lack of affordable housing in Bermuda.

The march starts at noon at Albuoy's Point. Everyone is encouraged to attend, whether you're struggling with the rent yourself or are simply a concerned citizen.

Update: Please note the date change as a result of the BELCO fire.

Comments

[Cancundreaming on 13.07.05 at 09:34]

I always think its great when Bermudian civil society gets out there and starts making some noise, its makes me smile and realize that there are people who care about our community.

Housing is one of the most significant problems facing Bermuda, more so then crime and public education, not because it affects more people or the consequences of failure are so significant, but because we really have no idea how to fix it. I think this is one of areas of public policy where the government needs to recognize their limitations and employ the help of an expert or a panel of experts to figure out something that works for Bermuda. The BHC is not a long term solution to the housing problem, the issue isn’t really the number of houses on the market, it’s the cost of the current houses already in private hands, and the BHC has no purview over private houses, at least not in terms of price.

I think the only real solution to the problem is some form of price control. I believe at least some private property in New York is priced controlled, and there may be other cases around the world that I am not aware of. There has to be a way to balance the interests of the public in having affordable housing and the interests of private property. There has to be a way to figure this out, but I think we have to recognize that the BHC’s current mandate isn’t going to solve the problem and some hard decision will have to be made.

[H Reardon on 13.07.05 at 10:17]

"I think the only real solution to the problem is some form of price control."

When something is price controlled, by definition, it is held below market--essentially where demand will exceed supply. So if some form of price control were to be enforced, that would lead to mulitple buyers wanting to buy a house for the same price. Without the market deciding who gets the house, how should we decide?

Does someone from the government gets to decide who gets the house? So then, if you are byes with the "Housing Control Minister" you get the house, if not, you are SOL.

Or maybe we should use "need" as a means to decide. Who needs the house more? Is it the family with 7 kids who are struggling to get by, or the young couple working hard and trying to save for their own piece of the rock? If it is the family with 7 kids, what sort of incentive does that promote? Whoever has the saddest story gets the underpriced house? What kind of society would we be then--everyone struggling to have the worst lot in life.

[Cancundreaming on 13.07.05 at 10:39]

H Reardon ,

It seems to me that demand has already exceeded supply, at least for affordable housing. In normal market economies, I think most markets can take care of it, you don't like the price, you simply move or seek another house in a different neighborhood, city, state or province. In Bermuda, you simply can't move to a different area you're forced to pay for something that is essential to you living the 'good life'.

I don't want to get into an market economy argument with you however, I’m not sure what price control will entail, I think it's something that we as country will have to look at and figure out something that works for us and not to assume that the attributes or failures of other price control systems will be ours, we need a special Bermudian solution.

I find your suggestion that some of Bermuda's families will willfully ruin their lives to secure a home silly and disingenuous. (i.e Let's have five more children so we can get that nice home). As if ruining their lives is not the very thing they are trying to prevent by securing their own home.

I'm not for price control just to be for price control, but it's the only solution I can think of but I’m welcomed to hear others if you have any.

[oursnottoreasonwhy on 13.07.05 at 10:58]

Cancundreaming,
"I find your suggestion that some of Bermuda's families will willfully ruin their lives to secure a home silly and disingenuous."

You'd be suprised - there is an increasing amount of single mothers in the U.K. who receive financial assistance from the government. These young people are having babies and given a free ride because they are supplied with accomodation and allowances. Obviously this isn't the case for everyone but there are many cases of is happening.
I can see the same happening in Bermuda.

Maybe Bermudians would have a better shot at affording real estate if they made sacrifices, don't buy a new outfit and pair of shoes every week and fly to new york to go shopping and own a fancy car....... do this for two years and you might be able to afford a down payment on a house? We need to learn the value of money and stop throwing it away.
Another thing everyone forgets is that it is BERMUDIAN landlords who are reaping the benefits of rent increases. Greed plays a factor here and maybe the older generations who are property owners are selling out the younger generations for more cash?
I do think its fantastic that people are getting organised though, lets hope it doesn't fall on deaf ears.

[Cancundreaming on 13.07.05 at 11:16]

oursnottoreasonwhy,

I disagree with your argument, but even if you're right it's irrelevant to my argument. I never said the government should choose who gets to buy this particular house or rent that particular apartment. As long as they're abiding by non-discrimination laws, the landlord or seller should decide who rents or buys their house or apartment.

What I suggested was some form of price control and I don't believe that price control automatically means the government or the civil service should/will decide which individual get which individual house.

[jake on 13.07.05 at 11:34]

I am against price control. It leads to decline in standards as owners cannot justify investing in properties to keep them up to scratch because the price of paint, labour and new windows is not controlled.

We have to get away from the argument that the Government has to do everything for us, or that we are entitled to a house.

Earlier generations made less money than we do and saved. Our generation is much poorer earning much more. That is the issue we face.

If you control the return I can get on my investment so that I earn little for building homes I have no incentive to build - which makes the problem worse.

It does not work in Manhattan where you see wealthy people still holding onto apartments that are "grandfathered" with low rents. Why would it work in Bermuda?

What I do suggest is building apartment complexes in the city as is happening. When there is a good reason to live in a semi urban environment people will do so. Services spring up to meet the demand and so more people prosper.

It is a crazy idea, but the market actually does work.

[John Steele on 13.07.05 at 12:29]

Is anyone in Bermuda talking about cohousing? It's a Danish idea that's been gathering interest here in the States over the last 15 years.
My wife and I are curious about it, and toured three such communities this last weekend. (The first one in the country, Muir Commons, is only a few miles away, in Davis.)
I must admit that I was pleasantly surprised by what I saw. Rather than meeting a bunch of idealistic hippies or kibbutzim I found people much like myself - ordinary, middle-income families who want to join (or establish) a viable community (in an area, I might add, that is going through a housing boom).
It seems to me it's an idea who's time has come, especially for a place like Bermuda, where land is so scarce, (Muir Commons has 26 homes on 3 acres). MUCH better than building high-rises, as was suggested recently.

[Pitts Bay on 13.07.05 at 13:47]

I agree with you Jake. We need to have more apartment buildings and we need to get rid of that "eves of the cathedral" limit. People will get used to urban living. It is the only sensible thing to do.

[jake on 13.07.05 at 15:21]

They should be limited to the city though. It is an acceptable way to combat the housing shortage and the traffic problems. Encourage city cars that can move people about when it rains. Encourage delivery of food, (check out www.freshdirect.com) dry cleaning, and cleaning services. If we had a duane Reed equivalent that would deliver that would work wonders as well.

The Cathedral limits lost their meaning when we became more than an Anglican state. I don't think God is too worried about that at all.

[H Reardon on 13.07.05 at 15:42]

"What I suggested was some form of price control and I don't believe that price control automatically means the government or the civil service should/will decide which individual get which individual house."

The question remains, if you have price control, you are essentially holding the price of an asset below market--which means demand will outstrip supply. If we don't use the market, how then do you decide on who is deserving of the (by definition) underpriced house?

[Cancundreaming on 13.07.05 at 17:39]

H Reardon,

It would not be an under priced house, to me an under priced house would be one that is sold for a price under the current value of the house, value as defined by an independent professional.

I'm not suggesting that the government require an individual to sell a house a $500,000 house for $450,000. What i am saying is that, perhaps, we as a community should ask ourselves, given our current housing situation if it's in the interests of all involved that a $500,000 house be sold for $650,000. (These figures are off the top of my head because i know many people on here would not hesitate to post the entire government analysis of the housing market just to dispute my figures) I'm just using it as an example on whether we should limit profit maximization.

You seem to be applying your preconceived notions about price control on what I’m saying, I’m not suggesting what you think I am suggesting. You also have ignore my point that it already seems demand had outstripped supply, you just jumped right over that.

You seem to be applying your preconevinced notions about price control on what i'm saying

[Cancundreaming on 13.07.05 at 18:12]

Jake,

I think you’re misunderstanding the problem and I think you’re absolutely incorrect. I don’t believe all forms of price control automatically lead to a decline in housing standards. It seems to me that people are going to improve their homes regardless of price control, If I own a house that I live in with my family I’m going to continue to improve it because A) I want to live in a nice house, B) I’m going to pass it onto my children one day so I want to upkeep it C) If I upkeep it’ll make it easier for me to sell it if I decide to move off the island or to a different house on the island. These incentives will not be affected by price control.

Jake, if you look at every comment I have posted on this site no where will you see me articulate the idea that government has to do everything for us nor will you see me articulate the idea that everyone is entitled to a house.

What I do believe is that there are certain issues in every country where the issue necessitates the involvement of government. An issue that we can’t cross our figures hope for the best and say let the market figure it out. I believe that housing is one of those issues. I’m not suggesting that everyone is entitled to a home. What I am saying is that I believe we as a society have an interest in ensuring that all families at least have a reasonable prospect of owing their own home one day.

Jake, you seem to think that by the government controlling the return on your investment (a house) it’ll make the housing problem worse. Yes you’re right that price control will lessen the incentive for home owners who own 2 or 3 or more houses to build more houses and improve on the houses that they currently do not live in. However, this won’t worsen the problem, this is part of the problem. What you’re likely to do with your investment is sell it, not to someone seeking a house as an investment, but someone seeking a house as a home. You're likely to sell your secondary or tertiary house and put your money in other investments such as equity stocks or mutual funds etc.. and I’m all for that.

[Steve Moffat on 13.07.05 at 18:48]

I'm afraid the housing market and the amount of housing cannot change for the better.
The false market we have here has to be maintained at the level it has risen to in order to hold off the mass bankruptcies that it would cause. Case in point......Mr Smith has a lovely 3 bedroomed cottage in a few acres, he paid 4 million for it. He now rents it out to Mr Bigwig at ReinsuranceRe for 2 times his mortgage payments.

Now if there was no shortage in housing what do you think would happen....would the extortionate rents get paid...I don't think so. So Mr Smith is left with a house that is really worth under $1,000,000, no rent incomr to speak of now, can't afford the mortgage. Bank repo's the property...sells it for under the million...loses 3 million.

That's why there will always be a sever housing shortage here....nothing to do with land.

[jake on 13.07.05 at 19:00]

I did not mean to place those comments to you. They were my own (additional) thoughts.

What you fail to understand is who builds houses in a market. In Bermuda it used to be the case that you bought some land hired a builder and went to work. This still goes on, but is a more expensive way to enter the market. The builder prices in a margin of profit when you do this as his profit.

When a developer (could be a builder or a John Swan type that also hires builders) buys land in huge parcels, splits it up, gets a better building price because of volume and then sells it to the market. He also builds in a margin of profit.

Without the profit there is no reason to build these places. The profit is what these guys live on. When you propose to limit the cost of a house - which is just one factor in the market - you create an gap between what something costs and what I can charge for it. The cost of building + profit is where the house costs are coming from. If the profits are high many people are drawn to build to sell (as is the case today). When they have more places than the market needs, they have to compete. Price of unit is one way of doing this. Premium products is another (note: it is hard to do both as research will support. See Michael Porter on Strategy). As they compete on price, prices come down. If you take the profit part out people will still need houses, but builders will not build them. Those that do will have a guaranteed buyer, but a limited profit if any. That will also limit how many they can produce - less places again.

That gets us to H. Reardon's question. If not on price, how do we choose who gets what?

It simply does not work. THe market on the otherhand does. Building and construction is at an all time high - why? Because the market is building to meet the demand. Condo developers will tell you that already they are seeing the prices level off a bit on increases. It is no surprise. There is a healthy number of empty places on the market and more being built. Prices must fall.

The people marching would do better to save their money and plan ahead. This Government is not equipped to fight the market. No Government can win that battle ultimately.

[Martin on 13.07.05 at 20:26]

Jakes point is interesting...

I seem to recall saying on another post some onths ago, that I had had a conversation with a friend in the business.

He was predicting that rental prices would fall in 2006 (I can't recall his logic to be truthful).

Most people said on the post..."no way Jose...rents will not go down".

Looking at what Jake and Steve have written...anybody now think that rents might fall?

[Elizabeth on 13.07.05 at 21:07]

I will be marching because as a college educated Bermudian I am concerned about how increasingly difficult it is for the average Bermudian to obtain afforable accomodations. While I agree there are people who have made poor decisions that are proving to have a long term negative impact on their quality of life; I firmly believe the problem transcends sterotypes. More and more of my peers are moving elsewhere because they cannot afford to live in this country. This greatly concerns me. Yes, the middle and working classes in every country struggle with the pressure of making ends meet; however there are a number of factors at work in Bermuda that, on a whole, do not apply to other jurisdictions (lack of land, and major rental allowances for example). It is a growing problem that affects everyone. Just the other day a co-worker told me (in reference to finding an afforable place to live) I don't want a hand-out, I just want a fair shot. I don't expect or want any government to do for me what I am perfectly capable of doing for myself. However, just like any other citizen in any other nation, I do expect to be placed first in my own country. Thanks for the opportunity to post. I'm a first timer.

[DS on 13.07.05 at 21:40]

Over 30 years ago the complaints about the costs of building & renting were much the same as they are today. Around the dinner table one night in the late 60s my father put it this way; "Bermuda's problem is not the high cost of living. It is the cost of living high". That statement is more true today than ever before.

Just look at what we happily pay for telecommunications & entertainment services that we never had before. Used to be just one TV in the house. Whats a remote? 2 over the air TV stations, neither one broadcasted after 11:30PM. Whats cable, sat TV etc.? All electronics costs far more than they do today considering wages & they were nowhere near as durable. I have a TV which is almost 20 years old. Still good, though the remote no longer works.

Air conditioned cars with power everything that we replace long before they wear out? You must be joking!!! Run that car to the ground then make it run some more. Cars were nowhere near as reliable as they are today.

We figure that we are entitled to at least 1 trip per year. Airfare to the US east coast alone used to cost more than 2 weeks wage for the 'average' person.

Airconditioning in the house? Only if you lived in Tuckers Town.

Today you can buy a desktop computer for less than a calculator used to cost.

Tennants used to do their own landscaping. Today they expect it to be done for them twice a month.

Sorry, given Bermuda's building costs, largely driven by labor cost, Bermuda tennants get off lightly. Your problem is your cost of living high.

[jake on 13.07.05 at 21:46]

Rents may not drop in absolute terms, but the rate of increase has stemmed, and is going flat.

For example a two bed exec. quality is pretty locked around $4k. The trend over the last two years has seen it rise from about $2.5K . That rate of increase will not be seen going forward. At some point soon they will grow at the rate of inflation again and then below until they get back in line with our economy. The reality is that as we get wealthy as a country, things get expensive as people seek to gain access to that wealth.

As for being placed first - you are. You can buy a house and your peer from overseas cannot. In the long term that benefits you immensely. You can get paid the same as them if you are in the same industry.

We are in a time of feast and people are still crying famine. We have to work to get ahead - a point lost on too many of us today.

Oh, and save. We have to work and save.

[james on 13.07.05 at 22:48]

What do you think of this idea, check this site out:

http://www.ndm.si.edu/SOLOS/futureshack/

[Door on 13.07.05 at 23:46]

I fully support all those who plan to march, as housing is such a huge proplem here. However, I do not believe that any form of rent control would work, and am a firm believer in market forces setting rents. The simple problem is the demand is too high, and a large part of that is the increase in foreign workers. There is a certain segment of foreign workers that Bermuda needs, but I think there is a certain segment that Bermuda could live without.
One policy I cannot understand is why Bermuda grants residency permits to people who do not own property in Bermuda? Non-Bermudians are allowed to live on the Island but not seek work. Not only do they take up scarce rental accommodations, but they often employ foreign Nanny's , Housekeepers etc. who are also taking up scarce rental accommodations.
If Government is serious about the problem why does it allow this??.....

[Guilden M. Gilbert, Jr. on 14.07.05 at 12:15]

Elizabeth,

A very good and accurate post. I have a quite a few friends who have given very serious consideration to leaving Bermuda or have left Bermuda because while they earn a healthy income they cannot afford a home in their own country.

It is a sad reality that most Bermudians are excluded from their own real estate market.

I have two questions, "What is the definition of affordable housing for the Bermuda market?" and "Based on the cost of construction, how can the market meet this definition?"

Don't construction costs start at about $250 per square foot? That being the case, a 2,000 square foot home will cost $500,000 to build plus the cost of property (1/4 acre) at, what, $450,000 or $950,000 total. Is this deemed affordable? If, so, what percentage of Bermudians can truly afford this price.

The monthly mortgage payment alone is $6,000 (5% down, 30 year mortgage at 7%). To qualify for the mortgage using a debt service ratio of 50% the person would have to be earning $12,000 per month or $144,000 per year.

You than need to add in the associated costs of the house, insurance, porperty tax and maintainance. Once you add the every day costs of living persons in this position must be working only to service their debt.

[jake on 14.07.05 at 12:58]

Guilden,

Do we all need 2000 square feet?

Do we all need the finishings that mean a house will price at $250 per square foot? For example hardwood flooring, granite counter tops, blinds on windows, 14 x 14 rooms, two or more bathrooms, solid wood cabinets?

I know these costs because I built my own. Where we did not have the money - we sacrificed some luxury we could not afford. Over time we will spruce the house up with blinds etc.

I even have friends who did not paint the outside of the house for a few years so that they could get the house done and move in.

To say that a house must cost $950,000 is to be locked into a lifestyle that you cannot afford.

My parents did it. I did it. When my friends built we had a work rally and we made it happen for them as well.

Bermuda is about hard work. Nothing much has changed excpet for the laziness and prima donna nature of too many of us.

[Terry on 14.07.05 at 13:14]

Jake, I don't know you but your simple reasoning is a blessing. I could go on and on but you put it in a nutshell. Thank you for saying what I could not, or saying what I thought, not to be repetative. You have common sense and may you continue to use it, whatever your choice of words may be. Long live the Onions, and all those little good seedlings. Man I love it when a plan and thoughts come together.....

[Guilden M. Gilbert, Jr. on 14.07.05 at 13:33]

Jake,

I agree wholeheartly with what you have said regarding sacrificing luxuries. Of course we don't all need 2,000 square feet. What I was doing was using an example. However, is my example not the average size of a home in Bermuda and is the a 1/4 acre not the average property size? The point of my post was to determine what is defined as low cost housing for Bermuda.

Would you mind addressing my questions, whcih are repeated below:

"What is the definition of affordable housing for the Bermuda market?" and "Based on the cost of construction, how can the market meet this definition?"

Thanks.

[jake on 14.07.05 at 15:36]

In a market like ours a detached house is a luxury. My family grew up in a house with less than 1500 square feet and 1 bathroom. We made out just fine with bunk beds.

A Two bed apartment with one bath is all most families need. We can choose to only have the children we can afford to house, or house the ones we have in the house we can afford. Both our choices.

An affordable house is in the $550 - $650 range. Apartments can be built for that range. Lopes' one bed places went in that range and are all sold. The cost of an additional bedroom is about 30k if that, so I would say $650 can get you a two bed in a complex that shares the cost of the land.

Mortgage calculation: 80% of $650,000 is $520,000.

$520,000 PV, Interest Rate 7%, Term 30 Years = Payment per month of $3,500. Between two working adults that is $1,750 per month. On a $50,000 salary that is 21K per year or 42% of salary. Your second job either buys extras or gets you savings and investments.

It's not Tuckers Town, but it's a starter home.

Many people can add on to their existing home and avoid the cost of land in building. Let's call it 1,500 square feet at $230 / square foot. That is $345,000. At the same terms as above that would be $2,295.29 per month. A family can achive that too.

We have to make the best of what we have Guilden. You might be surprised how many "wealthy" people made it through struggle and sacrifice.

[Guilden M. Gilbert, Jr. on 14.07.05 at 16:19]

Jake,

"We have to make the best of what we have Guilden. You might be surprised how many "wealthy" people made it through struggle and sacrifice."

I fully agree with you about sacrificing.

However, even by your calculations the average person could not afford the home because in your example of the $650,000 home, a down payment of $130,000 is required. Don't the banks now lend up to 95%? Which brings the down payment to $32,500 and takes the mortgage payment to $4,100 a month

My definition of affordable housing is housing priced so that the majority of the population, when acting economically prudent,ie. financially planning for home ownership, to have a realistic chance of home ownership. Would you not agree that affordable housing is really not an item that is available in the Bermuda market? There aren't very many people who can come up with $130,000 for a down payment and based a 5% down payment the couple would have to have a combined income of $100,000 just to qualify for the mortgage based on a 50% debt service ratio.

When considering this all factors have to be included because they are real costs, insurance, property tax, maintainance, utlities and the everyday costs of living.

You mention that the second job should allow for savings. Does that not go back to my point that people in this situation work simply to service their debt? What you are saying is that although in your example the person may be able to own the house he cannot have a life because he has to work all the time in order to afford the house. With all due respect, is that really affordable housing in your eyes?

I truly wonder what this proposed march really can accomplish because outside of protecting Bermuda real estate from foreign ownership there is nothing the government can or should do to prevent a free market economy.

[charles on 14.07.05 at 16:32]

Jake,

I like your thoughts on this issue but one thing puzzles me. I have been to Bermuda many time and see a lot of potential in the former base lands for development. Why on earth has no one moved forward to build housing complexes on this property? The last time I was there all you saw were abandoned barracks which could be removed and replaced by either townhouse/condo communities. I believe in town apartment buildings would probably be very expensive and only be affordable to the higher earners or expats on allowance. Your thoughts?

[terry on 14.07.05 at 16:44]

G.G. As stated before, some of your coments are good, others unrealistic. Bermuda sold out to ex-pats years ago. Come back and make a differance. Apparently you have it good where you are.

[terry on 14.07.05 at 17:25]

In a nut shell Charles, thats why they, the Government demolished the Base Housing. Hurricane strength winds would wipe them out. Bull Shit. They stood up over the years, and through times of carnage through winds.

Why rent out all these wondefull places. No Money. It's there. Lets knock em down and see whats happens.

WHATS IN YOUR WALLET...

The Ex Navy Base could have become the home of the Regiment, Firing Ranges, assault courses etc.

Whats in your Wallet.

It was FREE.

GREED, thats all.

All those ex-retired Captains, CPO's and lesser ranks are just laughing and saying, "told you so".

Whats in your wallet.

Have to go and follow BRAC, see whats up for sale or lease................

[jake on 14.07.05 at 17:53]

Guilden,

I know plenty of people who are working class who can write you a check for over $100,000 - they save their money. The 95% mortgage is for people in a higher earning bracket who have not had an opportunity to save because they have been in school. It is not a substitute for prudent planning.

A combined income of $100K is not that bad anyway. Last I checked though DSCR is 1.3 not 50% so that means if you want to pay $3,500 in our first example you must generate $4,500 ($54K annually) together or in my second example about $3,000 together ($36K annually).

Even so, I know plenty of people - everyday people - who save their money and invest it prudently. A home is a reasonalbe plan for them. If you just came back from Test Match and are driving your car with your cell phone in one hand and your LV bag over your arm - and you are not earning over $100K a year - not too likely.

I know one family where the mother ran the books for the father's business. They started out with nothing. Nada. They had a small apartment and one child (second child followed a few years later). Mom and Dad lived on what they could generate from the business and Mom ran a TIGHT ship. Dad was a hard working builder with a good attitude. He got lots of work.

BEFORE the big rise in house prices they had over the years managed to buy a house, buy some land, build a second house over time, sell the first, and then retire. Dad now has a boat he uses for fishing and Mom manages the rental income from the tenants.

In Bermuda they are not unique. The problem is with the marchers who would have the Government put a choke hold on Mom and Dad (these are not my parents by the way) with rental control and fixed house prices. Let's be real though. These people would vote the PLP out in a heart beat if they pulled that crap.

The wise move would be to pass on the march, go to work and stay late that night, and save the money at the end of the month. (repeat)

As for the base lands, they are not suitable yet with the environmental damage. They are a scarce resource being wasted currently with the hands in the air I don't know what to do attitude being put out there today, but at least nothing dumb is being done so that in the future those with more vision will not be prevented.

[Guilden M. Gilbert, Jr. on 14.07.05 at 18:26]

Jake,

Very good points. I agree with you that there are many working class who can write that size check but I would bet that they are generally older and have owned their homes for many years or have inherited some monies.

The average person between the ages of 30 and 40, who have been paying rent, would not be in a position to do so. Would you agree with that?

Terry,

Firstly, I think we all have good and not so good idea, so I take that as a compliment.

Why are you so concerned about me coming back to Bermuda or how well I am or am not doing? What does that have to do with the topic at hand?

I live in the Bahamas because my wife in a Bahamian and so is my son. My success or failure is not determined by where I live, it is determined by my efforts, so it is not a matter of it being so "good where you are" it is more about this is where I am and I intend to make the best of it. Is there something wrong with that?

[Guilden M. Gilbert, Jr. on 14.07.05 at 19:23]

Terry,

When have I ever said anything about me trying to save Bermuda and Bermudians? Listen, Bermuda is my country of birth and the country I was raised in. It is and always will be my home. I happen to care about Bermuda and my fellow Bermudians. I do not live in Bermuda but so what? I still have views and opinions and as a Bermudian I have every right to express them. If you and others do not like it that is not my problem. Here's the thing, if you do not like what I say you have two choices you can choose to ignore it or you can challenge it, very simple.

Do I get involved in politics here? No, at least not in a public way, I do not because even though I am married to a Bahamian and have permanent residency, at the end of the day it is not my country. I have always stated that foreigners should stay out of the affairs of Bermudian politics. How can I say that and then involve myself in Bahamian politics? That would be hypocritical of me.

[Shark on 14.07.05 at 19:48]

by foreigners do you mean not born in Bermuda? as if you do your very insalur and that just will not work a the world moves towards globolisation.

My parents wernt born in bermuda but they have lived in Bermuda for about halfe of my life and care about what happenes there so dose that not give them a right to get involved in Bermudian politics and voice there views on its furture?

I care about Bermuda and plan to return once my degree is finished but i also like to get involved in the politics of the UK as it is also my home by birthright on my mothers side and i have family here (and unlike Bermuda the UK can effect great change in the rest of the world).

To the topic at hand apartments should me increashed to offer housing for Bermuda as space is at a premium unless the create new land by heating and cooling sand and rock.

[jake on 14.07.05 at 20:37]

" I agree with you that there are many working class who can write that size check but I would bet that they are generally older and have owned their homes for many years or have inherited some monies."

I would strongly disagree.

I am referring to people in their twenties who have worked and saved for a period of years.

I'll demonstrate. Save $1000 per month, every month. That is $12,000. At Cup Match and Christmas earn extra cash. $1,500 each and that is $3,000. Total $15,000. Do that for three years and invest the savings in the interim. $45,000 simple savings and with a 7% compounded interest rate it is $49,912.63 (Let's call it $50,000.00).

That is you. Your spouse does the same.

Voila you have $100,000 for your down payment.

It really is not that hard to do when it is your goal and nothing else (not car, bike or vacation) get's in the way.

I worked in a club at one point in my life and the guy working with me had a day job as well. He saved all of his money from the night job and I recall him telling me (off hand one day) that he had saved $20K. That got me thinking. How much had I saved? Total: nothing.

I quickly learned and took additional work and saved. By the end of the summer I had $13,000.

I was 17.

Tell me how many adults have cash on hand like that? Granted I lived at home and had few expenses, but where there was work I took it and where I made money I saved it. That is what I advocate to people today.

Expecting an inheritence is what will make you do little in your own life to be proud of, and make it unlikely that you will be able to take care of the things you get from the earlier generation.

[Terry on 15.07.05 at 10:58]

Guilden, really don't care about your non-involment in Bahamien Politics. You said it. Since moving to the US 15yrs ago, I am an American Citizen now. I take pride in that. They accepted me and I welcomed the opportunity. Bermuda was my home, my home is now here. Lets not get into the definition of Home, or domicile.

If you do not wish to participate, thats up to you. Please don't come back with this 'I never said that', only in private stuff. After reading your comments over the past year, I have come to the conclusion that you love a challenge, sometimes verbal or via the Web. I can promise you this, I will NEVER engage you again via this Blog.

Jake, your comments are rare and seem to be from the heart.

My Mother always had $10,000 stuffed in some corner of the house in cash. From the early 70's she took so much out a week from her cheque and hid it. Where I will never tell. She made the effort like you said to put some away for a rainy day, which 'ain't happening now'.

Since prices are high there, a large portion is spent upon cashing/depositing monies just to get everyday goods. Here, by the time you get it the State has taken it's share, the Federal Government their couple of shares and so on.

We just went to buy a place, put down a deposit and one month later the Builder raised the price by $80,000. Costs they say. Hell, he has had the 60 acres for 5 years and developed it. Bricks and mortar haven't gone up that much in a month.

Supply/demand. I call it, "how to screw a neighbour, without having sex".

[Guilden M. Gilbert, Jr. on 15.07.05 at 13:30]

Jake,

I agree with you about saving to reach $100,000.

What your example shows is that the person must use all his savings to produce the downpayment and as he is getting the funds for his downpayment his life revolves around working. By your example no vehicle, no vacation, no real family life, etc.

Even after the house is purchased he has no cash and really has no life outside of working to earn money to service his debt and recreate his savings.

Essentialy very few people who buy homes in Bermuda now can have a life outside of working to service the debt. Again I ask, "Is this really affordable housing?"

I guess I look at it like this. Life is not promised to anyone and while you are here should you not have an enjoyable life, being able to spend quality time with family, especially your kids, travelling, enjoying some luxuries rather than been so financially tied to something that you have to work two or sometimes three jobs in order to make ends meet?

The situation in Bermuda regarding the costs of housing is very, very difficult. That is the reason that so many people have or are considering leaving Bermuda in order to enjoy homeownership and have quality of life while enjoying that benefit. I feel for my fellow Bermudians who have to live like this in order to own a piece of their own country.

[jake on 15.07.05 at 14:12]

Guilden,

I don't know any other way of life, but to work.

I am old fashioned. I admit it. I believe a man who can work, who doesn't is a layabout. I can work hard, save money and still have a good quality of life.

Take a day off a week and go to Church with your family. Have lunch afterwards and hang out for the afternoon. Play sports for the weekend or go for a Ferry Ride. Go the the Botanical Gardens or go to the Aquarium.

There are many things to do, but building for the future means generating revenues and reducing expenses. Plenty of people find the time to build wealth and live.

I simply don't believe that people who work hard don't enjoy their life. I think they work for a period of years and then they enjoy the fruit of their labour. If one is not willing to labour then there will be no fruit.

Moving overseas will not change this, by the way. Home ownership and retirement savings are still the basis for financial independence no matter where you rest your head.

[Terry on 15.07.05 at 14:56]

My Man Jake. Very well said. Thanks for putting what whas on my mind and in my lttle brain to Pen.

Great way to put it so simply. Is't that what it's about.

Good day Jake.

[Elizabeth on 15.07.05 at 16:43]

Hello Everyone:

Just F.Y.I... The march for affordable housing has been rescheduled. It will now take place on Tuesday, July 19th starting at 12 noon from Albouy's Point. I believe Families United is marching to the Cabinet Building. As I stated before... I will be there (with or without electricity!!!)

[jake on 15.07.05 at 17:10]

Thanks Terry.

[Guilden M. Gilbert, Jr. on 15.07.05 at 21:03]

Jake,

I never said anything about not working hard. To be successful at anything you need to put in the time and effort. You talked about one having two or more jobs. If you have two or more jobs how do you spend time with family and have quality of life? I prefer having more than one day a week to spend with the family. I do not know of anybody who on their death bed said they wish they had spent more time working. I want to spend time with my child while he is young so that I can thoroughly enjoy his years of development.

I disagree with you about financial independence. Financial independence is creating your own income, not working for somebody else who determines your worth by how much they pay you. Financial independence is about earning based solely of the eforts you put in. Independence is deciding when you want to go on vacation and for how long. Financial independence occurs when you create a vehicle(s) that produce longterm residual income for you.

I do not care how hard you work for someone else when it is time for you to retire your income is gone and you live off what you have saved. Your retirement savings will never give you the same level of income you had pre-retirement and with the advancements in medical technology we are living longer which means we need more money to carry us in our retirement years. Not only that but in your retirement years inflation eats away at what you have saved because you do not have any income to replenish what you are spending.

When you create your own income vehicle that income continues on after you retire. People like Sir David Gibbons continue to work because they choose to work not because they have to. That, my friend, is financial independence.

[jake on 16.07.05 at 11:17]

I have no idea where you got the idea that I was restricting my comments to employed people.

It is entirely possible to work for someone else and obtain financial independence. It is more likely that it will be obtained earlier with working for yours elf - in some instances - i.e. where you are successful. Not everyone is.

All I can say is this, saying on one hand that you want to have financial independence - however you describe it - and then saying how you don't want to work hard - for yourself of someone else - is frankly inconsistant.

It may work for the exception, but it is not how most successful people get that way. There is no easy way out, no march on Government, and no support group that will better your situation like working hard and saving will.

[Guilden M. Gilbert, Jr. on 17.07.05 at 09:05]

Jake

I never said anything about not working hard. I said in order to be successful at anything you must put in the time and effort. Once you achieve the level of success you want than you may not have to work hard, you can reap the rewards from yoru hardwork.

As far as becoming financially independent by working for someone else, sure its possible but only a very small percentage are able to do it.

You are correct that many who open their own business fail. But you need to look at where the filur lies. Most of the time the person has not done proper and prudent market research to determine if there is a demand for his product or service. On other occasions he mismanages the finances of the company because any profit goes into his pocket, not reinvested in the company.

In order to have a successful business you must find a niche. I think you will find that most financially independent peopl are in that position because they have created their own companies, which have been successful.

If I create my own company and it is doing very well financially is there something wrong with me enjoying the fruits of my labour by having a good management team in place to run the company while I enjoy life, maybe by playing golf most days and travelling the world?

You and I tend to agree on most topics on this site, we differ on this one, however. That could simply be the way we look at financial independence. I have a great deal of respect for you and I respect your position on this topic we simply view it differently and there is nothing wrong with that.

To continue go back and forth with each other is fruitless, I say, we should agree to disagree if that is ok with you.

[Point on 17.07.05 at 10:10]

GG

I think Jake is (quite rightly) pointing out that success can be achieved and defined in a number of different ways. You don’t necessarily have to own or operate your own company to be financially independent. Fiscal success can be achieved by being an employee as well as an employer. The real question comes down to how you choose to “spend what you got” – not so much who you work for or who you employ.

[jake on 17.07.05 at 15:43]

Guilden,

I agree that there is nothing wrong with not working once you are financially independent. In fact that is my plan, and why I work like I do.

I also agree that we can leave the topic there, as I suspect we agree more on this subject than disagree.

[Guilden M. Gilbert, Jr. on 18.07.05 at 13:17]

Point,

I am not necessarily disagreeing with Jake. However, I have seen too many people rely on working for someone else in order to achieve financial success and I have seen many of these same people get screwed because for one reason or the other their employer no longer has need for them and they lose their jobs. I don't care where you are within the organisation your job security only rest with whether your employer feels that you are doign a good job.

When working for someone else your income is not determined by you, however, when working for yourself you determine your level of income by way of your level of production. Further, when working for yourself the total income is earned by you. When you are an employee you may make a salary of $50,000 but through your efforts you may be producing $500K in income for the company. If I can produce that much in income for the company then surely I can produce at least that much for my own company.

I would agree it is a risk to work for yourself but if you thoroughly understand your product and your clients the risk is minimised. As long as you operate the company prudently you can make it a success. That's my opinion.

In doing what I am doing I am trying to ensure that my child(ren) don't have to go through working for someone else who determines their level of income, who tells them when they have to be at work, who tells them when they can go on vacation and for how long. My job as a parent is to make my child(ren)'s life as easy as possible while at the same time making them understand that anything worth achieving must be worked for.

I don't want my child(ren) to ever have to be concerned about finances. Life is full of stresses and if there is a way that I can prevent financial stress in my child(ren) then at least that is one area they will not have to worry about.

[Tiger Bay on 20.07.05 at 10:24]

Mr. Empathy addresses the housing protestors yesterday:

Alex Scott said he appreciated the march but warned the protesters against allowing themselves to be "used" politically.
"You don't want politics to get in the way – keep yourselves and your concerns paramount," he said.

[Terry on 20.07.05 at 10:41]

Thanks for the quote Tiger. It is not the Governments Job to get into Politics.

Royal Gizzard 21st July 2005:-

Lindo's Meat Market, a subsiduary of Government, are now responsible for all over the counter enquiries re affordable housing. A new plan by the CEO has and will be put in place. All Government Land will be redeveloped to contain and sustain Outhouses for a nominal fee.

Market Place, once contacted refused to be interviewed. It's Headquarters in Hamilton comes under the Corporation and not Government.

The Mayor refused comment also. Members of City Hall were seen digging a trench towards Canal Road with large strands of extension cords.

Could this be the answer some of you ask?

No... A permit must be obtained first from Ace and Excel.

Bloomberg:-0915hrs Wed.20/7/05.

[Bill Cook on 20.07.05 at 13:11]

More importantly how many MEN did you see marching ?

[Guilden M. Gilbert, Jr. on 20.07.05 at 13:12]

Bill,

You are indeed correct.

Many men lack the commitment to family and support for causes that they should have. In many ways men have taken a back seat to the ladies yet they complain about how women tend to be the ones to move forward.

Men need to get off their backsides and do what their part to improve society.

In many households women have become the bread-winners and they are also the ones who take full responsibility for raising the kids and taking care of the family.

I have no problems with women being the bread-winners, cause I wanna be a kept man anyway (LOL). However, the role of raising the kids and taking care of the family should be a shared responsibility and only a man can teach a boy how to be a man.