Increased demand for three bedroom houses has forced Housing Corporation officials to rethink their approach.

Edwin Cowen, general manager of the Bermuda Housing Corporation said the BHC is now focusing on acquiring three-bedroom units.

"We have been focusing on three bedrooms for the last year and a half,'' Mr.

Cowen said. "There's a need for three bedrooms units so we're going to convert some of our present homes to three bedrooms.'' And he said the problem laid in the increasing growth of international business and the resulting effects on housing demands.

The BHC's April 1997 Quarterly Information Bulletin on Housing -- released to The Royal Gazette yesterday -- said: "With only 1,828 units with three or more bedrooms in the rental stock at the time of the 1991 Census, even a small increase in demand for that type of housing has a major impact on the market.'' And the report said it was likely that international companies subsidised at least a portion of many of their employees' rents.

"This increase in demand for executive housing has had a trickle down effect on the overall market and is causing the rents at the lowest levels to be raised as well,'' the bulletin said.

But the report said financial assistance and housing subsidies was a small price to pay for having international business contribute some $442.7 million in foreign currency to the local economy.

While the BHC works on revamping homes to three bedroom units, the most comprehensive work on the local housing market, `Housing in Bermuda' by Dr.

Anthony Stukel based on the 1991 Census, had predicted an increase in demand for smaller houses.

The Canadian economist advised Government to concentrate on upgrading and repairing existing homes in light of the anticipated decrease in housing demand over the next 30 years.

Home shortage Dr. Stukel wrote that an ageing local population meant demand for housing will have virtually dried up by the year 2010, and even warned there may be a glut of surplus houses.

Responding to Dr. Stukel's report, Mr. Cowen said: "Currently there's a need for three-bedroom houses. We have no choice but to focus on that. In the long run there is going to be a change in needs.'' Mr. Cowen also said that despite the first of many scheduled rent increases -- the maximum increase was 12 and a half percent -- the BHC was still in the business of promoting accessibility to adequate and affordable housing.

"We are still trying to promote accessibility, we're not trying to get out of the business,'' he said. "We're trying to get everyone to play from an even playing field.

"We're trying to do away with double subsidies and make the assessment policy standard. Some people were getting a subsidy from us in the form of lower prices and another from financial assistance for housing needs.'' Mr. Cowen also said the BHC had not noticed a significant change in the number of people seeking assistance.

"The numbers haven't changed significantly,'' he said. "But there are still a lot of people out there who need help.''