Open mike: House prices and emigration

Bill Cook is concerned about the impact of house prices on emigration: "A young couple or a single person taking up a loan of say $750,000, amortised over a period of 30 years, could end up paying $4,500 per month! Regrettably, we do not keep records of how many of our brightest and best leave to be educated abroad and do not return, but even within my own circle of friends the number is quite scary. I am talking of 100s. And of course seniors who can't afford to live here sell their homes for top dollar to go and use the cash to have a better standard of living but unfortunately a more lonely life. We need to address this, and fast."

Comments

[Bulb on 02.02.06 at 12:52]

Here's another idea to go out along with all the high rise talk.
Exempt companies that are already investing in developing land (offices) in Hamilton should build in housing for the expatraites they employ. This moves the expense of providing housing to one of the causes of the current market problem. This will free up more of the housing for bermudian buyers.
This can be added to the development of truly 'affordable housing' at sites like Southside for first time Bermudian buyers.

Oh-yeah... Bermudians should be offered all the 'perks' expats are too

[Njegos on 02.02.06 at 13:00]

Does he, in Mr. Reardon's economic universe, simply have to "work harder", or is he, in real life, "shit out of luck"?

He is shit out of luck Tim. Classic macho economics. Who cares about short-term solutions (and who defines what is the "short-term" anyway?) because only the free market provides the "long-term solution".

So what if teachers, nurses, blue-collared workers etc. and families can barely make ends meet? Only IBs create wealth you see. Everyone else is an ungrateful parasite. And why shouldn't I be allowed to buy up half of Bermuda if I have the money? Houses are just goods to be rationed, right?

Social darwinism without the bloodshed - for now...

[Silencio on 02.02.06 at 13:09]

CB - This isn't about buying the average house in Bermuda. It is about buying the wisdom of buying ANY house in Bermuda. These days your choices seem to be:

(A) Earn a whole lot of money so you can purchase an average $1million dollar house.
(B) Purchase a $900k condo that actually is a condo
(C) Purchase a $700k "condo" that really is an old house that has been subdivided into several units.
(D) Purchase a rare $500k fixer-upper that needs another $200-400k of renovations to make it livable.
(E) Govt. project home
(F) Rent

All of this within a market that is of dubious value. It is absurd to compare the two. This is a very simple question - if you inflation adjusted your earnings from back then, what could you afford to buy today? I don't think you could - what did you do back in 89, and how much would you be earning today? What's the maximum you could borrow on your inflation adjusted salary? Simple math, CB. Most people's salary has not gone up at the exponential rate that housing has. You purchased your property back when property made some kind of sense.

I'm all for sacrifice, and I don't have a sense of entitlement. The issue is that we now live in a country that no longer aims to satisfy the housing needs of its own citizens. High-paid educated Bermudians shouldn't have to wonder how they can do it - it should be a no-brainer without threat of fiscal risk.

[J Galt on 02.02.06 at 13:49]

"One's worth is not based on how much money one has or what one can afford."

Yes it is

[NoVote on 02.02.06 at 14:17]

Reardon - please read my last post again carefully.

What I am proposing is NOT a tax.

I will concede that it does impose some temporal restrictions on the way in which people might use their income from renting properties that they own.

However, the mechanism should ultimately release income back to the property owner.

If managed carefully the policy that I proposed should go some way to addressing the supply side of the housing problem by utilising some of the power of the demand side.

I repeat that there is NO TAX being applied in my proposal.

A property owner that had some of his/her income channelled in the way that I suggested would always be the beneficiary of the proceeds of the investment vehicle that I proposed.

In principle this is not much different from forcing Bermudians and SoB's to hold 10% of their income in a pension fund (per the current law).

Ultimately they benefit from this forced saving/investing.

However, it is deemed to be in the common interest to compell people to do this in order to avoid social problems in the future.

In the latter respect my proposal is similar.

[C Broadhurst on 02.02.06 at 14:24]

Silencio. You are correct it is not about buying the average house anymore - its about getting anything at all. People who think otherwise have set their sights too high.

But as I demonstrated, it was that way in 1989 - perhaps not quite as bad - but bad.

May I suggest another option. Buy the $500k fixer upper and delay renovations until you can finally afford them.

[Two Cents on 02.02.06 at 14:25]

"One's worth is not based on how much money one has or what one can afford."

Although I find it hard to swallow, I agree with JGalt, isn't that pretty much the definition of worth ??

Unless you mean spirital worth or some other "funky" meaning of the word.

[H Reardon on 02.02.06 at 14:25]

"All of this within a market that is of dubious value. It is absurd to compare the two. This is a very simple question - if you inflation adjusted your earnings from back then, what could you afford to buy today?"

Posted by Silencio on 02.02.06 at 13:09

First off, Silencio, the market determines what a fair price is--two parties coming together and agreeing. You make is sound like some artificial force is at work here--the extra wealth needed to drive the increase in housing costs is a real occurrence. By definition it has to be, otherwise buyers wouldn't have the money to drive the prices up.

But let's take your example. If the average house price in 1989 was $450K and Chris bought his house for $230K, that suggests that the ratio of min to mean is 51%.

So today if the average house price is $1 million, then there should be a house out there for $511K. The increase of the $230K to $511K is 122%, or almost exactly 4% a year. So someone whose salary in 1989 rose at 4% a year could still afford the low priced house today.

[Njegos on 02.02.06 at 14:47]

Yes it is.

I assume you are referring to monetary worth and not one's worth as a human being.

NoVote:

I think it is a nice idea and the graduated scale would help ensure that existing rentals don't dry up at the lower end of the threshold.

[C Broadhurst on 02.02.06 at 14:55]

Silencio: For what its worth, I believe that the house we bought in 89 would go for under $500k today (it was that undesirable). Similarly, our multiple day & night jobs at the time would today attract a combined income of perhaps $150k - making the purchase quite possible.

Once you are in the market you can then buy and sell thus gaining equity.

Also, my comments are meant to show that 2 normal Bermudians, without family wealth can do it if they really want to. It ain't easy - but it can be done.

Best of luck.

[Simon on 02.02.06 at 14:56]

Reardon,

It may not be an artificial force on the market but it could well be a temporary one since the majority of the housing bubble is due to IB and its needs. If IB goes so do the current levels of house prices and rents and so those people struggling to get on the housing ladder now are left with a mortgage way in excess of the market value of their home. That is scary for anyone considering getting into the property market.

[Zoom on 02.02.06 at 15:01]

"That is scary for anyone considering getting into the property market."

It's scarey for anyone who lives or works in Bermuda.

[Uncle Elvis on 02.02.06 at 15:05]

"You make is sound like some artificial force is at work here"

I understand what you're saying, but there kind of IS an artificial force in the exorbitant housing allowances that IB gives its workers. I'm not letting Bermudian homeowners off the hook, because they readily jumped at this "free money", but, if this hadn't been instituted in the first place, things would be a lot different now.
Problem is: We're in a catch-22 situation. I wouldn't expect IB to get rid of the allowance, especially in this day and age, and it's really not fair to homeowners to force them to lower their rents as much as they really should.

So what's the plan?

The pre-fab housing thing from last year, which, by the way, would have worked, got poo-pooed for some reason (I know the reason, but can't say...) but it should still be a viable thing.
Apartment complexes would work, too. We know this because they have already in the few places that they've been put up.
I disagree that the height limit in Hamilton should be raised, but they SHOULD get rid of it outside of town. Surely there are places in Bermuda that could handle 4, 5 and 6 story buildings without looking TOO tacky. If this DOES come into play, I DO think that the "Keep it Bermudian" look should be kept. I, for one, really don't want another load of "Big Boxes" scattered around the island.

[C Broadhurst on 02.02.06 at 15:12]

Both the current and previous Governments have failed miserably to provide low cost homes. The time to act is now - not in another 5 or 10 years when its even more difficult to get into the market.

We can build outwards or upwards. If we build outwards we will eventually have to build upwards so why not build upwards now.

[Njegos on 02.02.06 at 15:28]

Simon:

This is why I think the Bermuda housing market requires some thoughtful management to avoid a boom and bust scenario. The size and relatively stable (numerical not mental) population of Bermuda should make this possible. I took a loss on a flat in London a number of years ago. It wasn't fun.

I believe the temporary moratorium on house sales to ex-pats was probably a small step in the right direction. Overall, the objective should be to discourage speculators and reward long-term investors. Keeping the rental market buoyant by throwing the doors wide open to well-paid ex-pats with enormous housing allowances does not help.

[C Broadhurst on 02.02.06 at 15:48]

About a 15 years ago a good friend of mine came to me for financial advice. It seems his mother had just given him (yes - given him) $80,000. He wondered what would be the best thing to do with it.

I advised him to go to his bank and ask what the maximum amount is they'd lend him based upon his income. Add the $80k to that figure and look for a property to buy for that amount.

A week later I learned he bought a $40k boat, a $30k car, and took a $10k trip. He still rents.

Alas, many Bermudians fall into this category - and wonder why they don't get ahead.

[Simon on 02.02.06 at 15:50]

Njegos,

I went through that in 1989. My wife and I were getting married and stretched ourselves further than we shuold have to buy a small 1 bed apartment with 100% financing. Within 2 years the UK property market had collapsed and we were in a place that was worth half of what we paid for it. Interest rates were 16.5% at the time so it took pretty much all of my salary so we were living on credit month to month. A couple of year later we had a child and so we lost my wife's income and had additional expenses - luckily interest rates were a bit lower by then. Soon the 1 bed flat was too small so we had to rent another house and rent out our flat with the rent we could get not even covering the mortgage. It has taken us until now to get in a position where we have paid off the debts we built up in those first few years. Although we didn't feel it at the time, we were luckier than some in that I have a good career and could always see us getting out of the hole we were in eventually but I feel for those Bermudians starting out now because the $$ amounts involved are a lot higher and as far as I can see the Bermuda economy is in a far more fragile state than the UK ever was.

[H Reardon on 02.02.06 at 16:21]

"the objective should be to discourage speculators"

Posted by Njegos on 02.02.06 at 15:28

I shudder to think what the world would be like today with an attitude like that. For one, Ace and XL wouldn't be here, so maybe you would have the quaint, poor Haiti, I mean Bermuda, you wish for.

[Njegos on 02.02.06 at 16:37]

Simon:

It's good to hear that you triumphed in the end. It certainly helps to be able to take a longer-term view, something not available to many borrowers.

I was luckier that you. I didn't have a family at the time. I bought in 87 and finally sold in 95. It was a typical lose-lose situation. I ended up as Bermuda mediator between disgruntled London tenants and a totally shiftless London estate agent. The final straw was a furious phone call from one of the tenants who I had to "talk down" from a baseball bat assault on the estate agent. The whole experience cured me from the property bug which has always struck me as a rather Anglo-Saxon obsession. These days I prefer steel ladders to property ladders. And I have learned that it is possible to enjoy life in rented accomodation.

[Njegos on 02.02.06 at 16:49]

Taxpayer Reardon, my old buddy! How go the 95-96 returns?

Have you heard of the expression "out of context"? I was talking about PROPERTY speculation. And Bermuda is a special case because of its size and location - quality housing supply is rather inelastic.

BTW, what is your opinion of US capital gains tax rates which favour long-term vs. short-term securities gains? What do your fellow machonomists and pseudo-libertarians have to say about THAT?

And cancel your trip. You don't have to travel to Haiti to figure any of this out.

[silencedogood on 02.02.06 at 18:54]

Hello...is this thing on...

People, we are on an island. Do you think the real estate is going to be cheap??? You could get rid of the housing allowance and the expats and build on every open space of land and in 10+ years there will be a housing shortage again.

Building vertically can take the pressure off until some new technology comes along that can be put to further use, but land will always be expensive on an island this size. I see alot of poor people worsening their already bad situation by having three kids out of wedlock.

To make this short, HReardon is right. Market controls have never worked, will never work and only penalize people like Chris who work hard and save.

It's easy to bemoan that not everyone has affordable housing, but scarcity is a constant in the world, especially here. If you really want to see a brain drain in Bermuda start penalizing those who work hard, save for the future, try to make a profit (gasp)and give the fruits of all that effort to those who sit on the wall. I'll be gone before you can look twice.

Just to further prove the point, I rent and am saving but the lady I have clean my apartment once a week lives in a million dollar house she bought for 700K on a cleaning lady salary. If she can be smart about her money and work her way up anyone can.

If we really want to help give first time buyers a subsidized interest rate, provide free contriception and sex ed, and provide financial aid for students going abroad.

[Njegos on 02.02.06 at 20:15]

"Market controls have never worked"

Would you repeal the moratorium and allow ex-pats to buy as much property as they wished?

[Simon on 02.02.06 at 20:30]

and while you are at it take away the ARV threshold and the extortionate additional land purhcase tax I would have to pay.

[Student on 02.02.06 at 20:35]

Mr. Cook's point stating that there is a degree of reluctance to return to the island after university is well taken. Speaking as a current university student, my mind is certainly not made up as to what I would like to do upon graduation. However, the appeal to work abroad is great - especially in a 'happening' city such as New York or London.

If I decide to do this, my personal reasoning would be that you can get so much more exposure in one of these areas. I'm also afraid that it would be tempting to stay home upon return with the minimal taxes (recognizing that newly minted university students are not making millions...) and a familiar environment. However, without wanting to stray from the issue too much, I intend to obtain a mortgage as soon as possible.

The prices are, quite frankly, scary. However, options are available, especially for those willing to start in a condominium. Currently, there is a new development in Paget of 2/2 condos which are $725k. This is an obscene amount of money, but there's not much you can do to avoid it, and I for one would much rather go without at the beginning of the mortgage in order to own property rather than rent. I remember last summer when there were two units available at the 'Crossings' development in Paget which were under the $600k figure. Granted they're not an estate home, but to want such a thing is unrealistic in any country, and Bermuda is not an exception. Hopefully if people have saved carefully (and it IS possible) then there will be an option to get onto rung one of the property ladder, which is fine by me, as you have to start somewhere...

[J Galt on 02.02.06 at 21:36]

"Would you repeal the moratorium and allow ex-pats to buy as much property as they wished?"

Yes

[NoVote on 02.02.06 at 23:55]

Njegos,

Glad that you took the time to understand and digest my idea....unlike one of the other more rabid posters on the site today.

To be effective the sliding scale would have to be set with the correct parameters, which would take some skill and judgement by government (Don't go there! ;-) ), and there would probably need to be an ability to pool contributions from other investors in these vehicles in order to bring forward deployment of capital on development projects and subsequent release of the proceeds to owners.

I'd be interested to hear some constructive thoughts as to why the mechanism from an economic rather than a political perspective why it might not be feasible.

[sal monilla on 03.02.06 at 01:14]

ANYONE who thinks BDA will escape the worldwide coming housing correction is a complete space cadet with no idea what is transpiring around them. Look for -20% across the board. Already -25% in London - USA will be hit hard and everywhere else. Rates are ONLY rising, oil and gas will be 200% up soon and will jump with the next attack - believe it. No good for housing in the next 10 years - that time - like the market 6 years ago - is now passed. Bermuda will be no different.
Get your cash out of housing now - while there is still some time and someone stupid enough to pay the ridiculous pricing...

[J Galt on 03.02.06 at 07:41]

"Bermuda start penalizing those who work hard, save for the future, try to make a profit (gasp)and give the fruits of all that effort to those who sit on the wall. I'll be gone before you can look twice."

Nicely said.

[Bill Cook on 03.02.06 at 08:50]

The point is that government must assume some meaningful responsibility to ensure that there is a reasonable amount of affordable housing in Bermuda.

There are many very solid Bermudians who do not sit on the wall but work as hard as they can with as much use of their abilities and time as they possibly can and yet cannot make ends meet due to such a large portion of earnings required to pay for rental accommodation.

No investor in realty is going to subsidise a tenant as he wants a fair return on capital invested and risk taken etc.

In Ireland where I was born I did not have a single friend who owned the home they lived in and it took me 25 yrs to buy the house for my mother that she once worked in, as in spite of being a woman who worked every day of her life morning till night she could never have afforded to buy.

I am not in favor of bending over backwards to accommodate irresponsible mothers of children they cannot afford or lazy non working spongers but am referring to those who do the very best they can and just cannot make it without some assistance.

If we allow our society to be so uncaring and in my opinion stupid we will create a destructive situation of our own making.

We have allowed our pursuit of more and more money to lower our quality of life with no regard to balance and with a live for today with no forward planning as to the future well being of this little place in the middle of the ocean that is so unique.

I have watched Bermuda slowly but surely lose its soul from the happy days when I lived in St Davids with little money but great friends great fresh food and fish and a great community spirit that todays youth will never experience regrettably and all our computers fancy cars and even those with big homes cannot compensate for.

[Two Cents on 03.02.06 at 09:03]

"If we allow our society to be so uncaring and in my opinion stupid we will create a destructive situation of our own making"

Bill haven't we already pretty much done this ?
We are becoming a countrty with an "every man for him/herself attitude" which is sad. The MP's are setting a bad example, it often appears that they care more about, their salary, new cars and perks much more than how/where they can help those in true need.

[Njegos on 03.02.06 at 09:09]

NoVote:

They are rabid because "free markets" are a religion to them. Anything that stands in the way of making a quick buck is heresy and tantamount to communism. Express an ounce of social concern and whoops - we are in free fall towards a Cuban economy.

In fact, their vaunted libertarianism is only skin-deep. They can't get enough of massive deficit spending on defense and security (which is merely a form of deferred taxation) but we'll leave that discussion for another thread.

Returning to your investment vehicle proposal, I invested in something similar many years ago which guaranteed 15% pa over 5-year lock-up (unbelievable I know). It was underwriten by an investment bank so your risk was clearly liquidity and the credit risk of the underwriter.

This is different. The idea, if I have understood correctly, is not to create rentable housing stock but decent affordable housing. This makes it less attractive for potential external investors.

Also, would a big insurance company underwrite a basic return to soothe home owner investors?

[Njegos on 03.02.06 at 09:16]

"I am not in favor of bending over backwards to accommodate irresponsible mothers of children they cannot afford or lazy non working spongers but am referring to those who do the very best they can and just cannot make it without some assistance."

Thank you Bill. There are far too many caricatures in this discussion.

[Guilden M. Gilbert, Jr. on 03.02.06 at 09:18]

sal monilla,

The only way you will se a correction in the Bermuda property market is if IB begins to exit. As long as the Bermuda Market continues to expand the property market will be bouyed.

The market may reach a point where it flattens but I very much doubt if there will be any reduction in property values anytime soon. I'm not saying it will never happen, it just won't happen anytime soon and it would take some catastrophic situation to cause it to happen.

There was speculation by some that the government imposed ban on sale of Bermudian owned property to foreigners would put downward pressure on property values, this has not happened. In fact the value of property transactions has continued to increase, with Bermudians paying the higher prices.

[Njegos on 03.02.06 at 09:21]

I have watched Bermuda slowly but surely lose its soul from the happy days when I lived in St Davids with little money but great friends great fresh food and fish and a great community spirit that todays youth will never experience regrettably and all our computers fancy cars and even those with big homes cannot compensate for.

St. Davids is the spirit of Bermuda. Great people. And the Black Horse Tavern is my favourite restaurant.

[Njegos on 03.02.06 at 09:27]

"There was speculation by some that the government imposed ban on sale of Bermudian owned property to foreigners would put downward pressure on property values, this has not happened. In fact the value of property transactions has continued to increase, with Bermudians paying the higher prices."

Guilden:

Not good news.

This is speculation (note to Reardon - I am now referring to RHETORICAL speculation) but is it fair to suppose that prices would have increased even more without the moratorium?

Or are you saying that impact is neutral?

[H Reardon on 03.02.06 at 09:34]

"Also, would a big insurance company underwrite a basic return to soothe home owner investors?"

Posted by Njegos on 03.02.06 at 09:09

No. Insurance companies exist to make money.

"I repeat that there is NO TAX being applied in my proposal."

Posted by NoVote on 02.02.06 at 14:17

Anytime a government forceably takes income, it is a tax. You are taking the income from the renter and investing it in your scheme, whereby the forced investor may eventually get a return of his money. This is no different than Social Security in the US--it is a tax.

If you are going to tax a population, I would rather you tax the full population than a certain segment--property owners who rent, in your example. Taxing one group and not another should only be used to attempt to modify (discourage) behavior--tax cigarettes, booze, driving to work at rush hour, ect.. I don't think most of us (read: excluding Njegos) want to discourage property ownership.

"HReardon is right"

Posted by silencedogood on 02.02.06 at 18:54

Sorry, just wanted to see that again.

[H Reardon on 03.02.06 at 09:44]

":There was speculation by some that the government imposed ban on sale of Bermudian owned property to foreigners would put downward pressure on property values, this has not happened. In fact the value of property transactions has continued to increase, with Bermudians paying the higher prices."

Posted by Guilden M. Gilbert, Jr. on 03.02.06 at 09:18

Guilden,

There has been downward pressure on housing prices at certain price points. I am surprised that the effects didn't trickle down more, but what I'm told by real estate agents is that the average price of houses sold has gone down--meaning there is still activity, but on the houses in the lower half of the price points.

[Guilden M. Gilbert, Jr. on 03.02.06 at 09:53]

Njegos,

The reason that the government applied the moratorium was because under the Immigration Act only 2,000 acres can be held by foreigners. At the time of the moratorium that number stood at 1,900 acres.

If the moratorium had not been imposed property values may have increased further as there would have potentially been more persons on the buy side. Nevertheless, the property value increases were still significant.

When the moratrium was imposed it was stated that it would cause developers to halt any further development and it would have reduced the value on homes held by Bermudians. It was further stated that the depreciation caused by this moratorium would cause concern to banks because the values of the properties would fall below the level of the mortgages outstanding. I guess those that claim to be economic experts really do not understand the uniqueness of Bermudan economics, especially when it come to real property.

[Guilden M. Gilbert, Jr. on 03.02.06 at 09:57]

Reardon,

I would dispute that there has been downward pressure on house prices. The values may not have appreciated as they would have but downward pressure? I very much doubt it.

Does your real estate friend have an example of a house that was on the market at $x which is now on the market at $x - $y? Even if this were the case and it was on the market at $x - $y the prospective seller would still be looking at a double digit return on his investment.

[Njegos on 03.02.06 at 10:05]

"No. Insurance companies exist to make money."

Are you sure you work in the insurance industry Reardon? Because you don't appear to have heard of "underwriting fees".

"Anytime a government forceably takes income, it is a tax."

Tax! Witch! Burn him at the stake!

"You are taking the income from the renter and investing it in your scheme."

No. You are taking the income from the renter and investing it in the renter's scheme. Now please point us to your piece of a F-14 or B-1.

"HReadron is right"
"Just wanted to see it again"
You de man! No, you de man! No, you de man!

High fives all around. Jesus, what a freakin' free market echo chamber!!

[Two Cents on 03.02.06 at 10:06]

Guilden,

18 Months ago We were told by a reputable Real Estate agent that we could sell our house for $1,000,000+. Recently we were told by the same agent that we could now get between $900,000 - $950,000 becuase more homes like ours are coming on the market alot more, so demand is dropping and as a consequence so are the prices.

[Njegos on 03.02.06 at 10:11]

Very interesting. Thanks Guilden. I think we have some of those "experts" on this thread.

[C Broadhurst on 03.02.06 at 10:32]

A well reputed real estate agent also recently proclaimed that opening up condo sales to PRC holders would not cause condo prices to rise.

Thinking of economics 101, I immediately disagreed and time has proven me correct. Indeed how could it be otherwise?

[Guilden M. Gilbert, JR. on 03.02.06 at 11:05]

Two Cents,

Did that reputable real estate agent provide you with a written proposal? Maybe your house was overvalued, that could happen. couldn't it.

If you sold today at $900,000 to $950,000 you would still make a sizeable profit even if you only bought a few years ago.

Besides if you are interested in selling I could probabaly find quite a few people to buy your house at $1 million plus. I wouldn't even take full commission on the sale. Whatdayasay?

Further, your reputable realestate agent would not give up very much in commission for selling your house at $900,000 versus $1 million. Hey a sale is a sale to a real estate agent, right. He does not get paid unless he get's a sale.

[loki on 03.02.06 at 11:19]

"Further, your reputable realestate agent would not give up very much in commission for selling your house at $900,000 versus $1 million. Hey a sale is a sale to a real estate agent, right. He does not get paid unless he get's a sale."

Indeed, Guilden. This was demonstrated recently in Steven Levitt's book, "Freakenomics", where he showed that Realtors selling there own properties typically kept those properties on the market for longer and achieved higher sales prices than they did when they sold comparible properties owned by clients. The commission difference between selling a house for $400,000.00 and selling one for $350,000.00 was too small for the realtors to care about keeping clients' properties on the market for longer.

[observor on 03.02.06 at 11:36]

Guilden

The reason that the government applied the moratorium was because under the Immigration Act only 2,000 acres can be held by foreigners. At the time of the moratorium that number stood at 1,900 acres.

Do you happen to know if the Act is specific about properties held for commercial and/or residential purposes?

[Guilden M. Gilbert, JR. on 03.02.06 at 11:42]

Observer,

I am speaking from memory here but I do not think the Act differentiates. A copy of the Act can be found on-line at www.bermudalaws.bm.

[jake on 03.02.06 at 11:49]

I figured I would get licks for what I wrote, but here it goes again.

Most people I know out in the field of construction own their own homes. Most folks I know that own their own trucks or businesses own their own homes and could afford $4,500 per month with their spouse.

Most buy a house with some income and rent out part to afford what they want.

If you work and can contribute $2,250 to your housing as an individual (which most can with sacrifice) then you can do it.

If you are going to leave the island because you cannot live in your dream house right away then it is your choice.

Personally I suggest an aggressive savings program, followed by a good chat with your spouse and your banker.

Your home is just a few sensible steps away.

The other option is the general griping. Most of those people will follow the route of C. Broadhurst's friend, have nice things in the present, and little in the future.

The Government and the Market do not owe them anything.

[observor on 03.02.06 at 12:19]

Guilden

I ask the question because a number of the larger commercial properties beneficially owned by non-Bermudian entities (with a Bermuda company noted as the registered owner - think Bank of Bermuda & HSBC) were originally acquired by way of a private members bill or some other form of legislative action.

Accordingly I wonder if the Minister and drafters of the relevant Immigration Act considered those land holdings in determining this maximum 2,000 acre figure?

[andrew on 03.02.06 at 12:48]

There is already an established method of providing affordable homes for the masses, controlling the amount paid in rent, controlling the amount of property that one can own, and controlling what businesses can pay employees.

It's called "communism".

The reality is, if you want affordable housing, you need to increase density. If you can't grow out, grow up. There are social ills associated with high-density housing, and these things need to be considered in a realistic sustainable development policy. Unfortunately, it seems that some have confused "idealistic utopia" with "sustainable develpoment."