“In my father’s house there are many mansions: if it were not so, I would have told you. I go to prepare a place for you.” John 14:2.Clearly the most difficult task of the ruling Progressive Labour Party is the provision of affordable housing. Nor was it any different when the UBP were the government.

Many times we have heard Ministers of Housing make promises about the delivery of housing that sounds surprisingly like that made by Christ to his doubting disciples. However, whereas the promises of Christ were certain to be delivered, his disciples were as doubtful as today’s households are likely to be when houses are promised by the government of the day.

In my view, a first step in developing an acceptable solution to the challenge of providing affordable housing should be to explain to the Bermudian public the complexities involved in determining a policy and implementing it.

The difficulty in resolving the issue of affordable housing arises out of the need to interfere with the market in order to supply housing for those who simply cannot compete on the open market.

As the discussion develops, I hope to demonstrate that meeting the objectives of all stakeholders in the provision of affordable housing is just about the most difficult task that a government must undertake once it decides that it will reduce the role of market forces in determining the supply of and demand for dwellings.

Perhaps the most successful attempts to date in supplying much needed housing has been the conversion of dwellings vacated by the armed forces as they withdrew from the island. Such conversions might have been sufficient except that they were offset by a new demand created by a steady influx of foreign workers.

The invasion of the foreign worker in addition to the desire of young Bermudians to leave the ‘nest’ in order to own a car resulted in another attack on the existing pool of houses. These twin forces had the immediate impact of causing large dwellings to be converted into small apartments to meet the demand created by the increase in the numbers of one and two person households. Bermudians in need of two and three bedroom family dwellings were lost in the struggle for adequate housing. This situation still persists.

In the mid seventies, the UBP attempted to create much needed housing by pursuing two strategies: the first was to upgrade houses in need of major repair and the second was to create housing for Bermudians desirous of home ownership.

The desire to upgrade houses in need of major repair arose out of the discovery that in preparing for the 1970 Census, The Department of Statistics had surveyed all the empty dwellings in Bermuda identifying their location, their owners and their state of disrepair.

When the survey results concerning empty dwellings were made available to the Minister responsible for the Census, he and his colleagues decided that the restoration of the large number of dwellings that were empty and in need of repair would be a useful start in providing two and three bedroom apartments that were desperately required by Bermudians.

However, when implementing the strategy, it was discovered that the legal issues involved in identifying the owners of the dwellings in need of repair, were considerable. Despite this obstacle, the project provided some housing although not nearly as much as was required.

The implementation of the policy to increase home ownership was met with the obvious criticism that creating housing for sale would not create dwellings for those Bermudians who simply wanted a dwelling place at a reasonable rent. The government response was that if the houses were created for sale, than those that were vacated by the buyers could be occupied by households seeking rental dwellings - “the so-called trickle down theory”.

Unfortunately, the trickle down theory did not take into account how dwellings were actually being supplied in Bermuda. Broadly, there were two types of suppliers of dwellings. Firstly, there were the landlords who provided dwellings for those households who were prepared to meet the going rent or price as well as the owner’s standards.

Secondly there were the landlords who supplied dwellings for family members and close friends. These restrictions meant that houses in the market for friends and relatives were not accessible to many households who were not friends or relatives but who were actually paying rents that were considerably higher than were required in the market for friends and relatives.

The dwellings that were on the so-called open market also placed restrictions on the renter which involved the existence of children, regulations about animals, a promise of acceptable behaviour and a requirement that was usually unstated which was the race of the would-be tenants and in some cases, owners.

In order to get the full picture facing government than and now, one needs to look also at the nature of the households requiring housing. The most clearly identifiable group were the newly formed households resulting from marriage and cohabitation. These households were expected to require additional dwellings. However this was not always the case since the newly married couples could choose to live with family, if the family had the space and no objections to an additional households in the dwelling.

But there was also a ‘hidden demand’ which was generated by those families who would like to upgrade their existing housing. This ‘hidden demand’ can arise from several factors. The most important cause is an increase in household earnings that is significant but is not thought to be sufficient to purchase a new dwelling. Other important factors are overcrowding as children enter the teenage category and want their own ‘space’; or the household may be responding to laws that forbid children of mixed sexes and over the age of ten to occupy the same bedroom. These demands are ‘hidden’ because the householders, as described, are not likely to be seeking housing overtly. However, should government place new dwellings on the market at reasonable rents, these households will certainly place their names on prospective renters or buyers lists.

When one considers the demand for dwellings created by the foreign worker who is in Bermuda to supplement the shrinking Bermudian work-force, the situation becomes even more complex. Permit workers must have a job in order to reside in Bermuda; in addition, they sometimes receive rent subsidies from their employers. When these workers occupy relatively unskilled lowly paid positions, they will be competing with Bermudian low income families for available housing.

Why does this situation continue, if the permits of such workers can easily be terminated and housing be made available for Bermudians. There are two main reasons. Firstly, landlords who are providing housing in the low income market are bedeviled by the twin difficulties of rent control and defaulting tenants. When landlords rent to permit workers, the rent is virtually guaranteed and a favourable deal may be struck with the supporting business that enables them to avoid rent control. Further, if the landlords operating in the low income market choose to allow occupancy rates to increase above those laid down by Bermuda law, they may now charge rent to each individual occupier and do very well for themselves.

In these circumstances, the government is between “a rock and a hard place” as the saying goes. To stop or slow down the expansion is likely to cause economic hardship to many of the landlords who form an important segment of the voter base. On the other hand, if the government does nothing or not enough for households looking for affordable housing, they run the risk of alienating another large segment of voters.

There is another option. By utilising the services of external construction firms who can put up housing in Bermuda at a cost per square foot that may be close to half that which local companies are demanding and getting. However, local companies would no doubt object strongly to the exercise of that option no matter the likelihood that it would very likely resolve the housing problem.

But there is an overriding issue that is related to the current demand for housing that is quietly ignored. What happens when the building boom subsides and the large numbers of workers who are here on short-term contract leave the island? Clearly, the result in both cases will be that a large number of dwellings will come on the market for the low income households.

A similar result should occur when the numerous apartment dwellings that are still being constructed are completed and also enter the market? Although a number of these will be required to house the staffs of the newly arriving staffs of international companies, others will no doubt be grabbed by foreign staffs who already exist and are desirous of upgrading their accommodation; or because the employers who are meeting the housing cost of their foreign workers simply want to reduce the expense of their housing subsidy. These decisions will all work towards reducing the cost of housing for locals in the lower income group.

Finally, supposing the boom in the arrival of International Companies does not materialize to the extent planned? This will also result in a surplus of housing on the open market which will seriously reduce the cost of dwellings both for rental and for sale. We cannot dwell on the likelihood of such an event occurring since it did happen between 1960 and 1970 at which time thousands of American families left Bermuda. This event ended a strong housing boom during which Bermudian landowners had built houses to accommodate the American service personnel and rented these at fabulous rents.

I trust this little discussion will encourage Bermudians to engage in open discussion on the complexities of Bermuda’s housing shortage and how to resolve it. I am strongly of the view that if more Bermudians begin to discuss the challenge, they will come to appreciate that understanding and resolving Bermuda’s housing problem is like “like trying to put socks on an octopus”. calvi>[AT]northrock.bm