Recently in Housing Category

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If I were a Bermudian married to a not yet Bermudian - which I'm not - and government was jerking me around with a license costing over $1,000 to own property, while allowing corporations to buy hotel residential units - with tax breaks, I'd be incorporating myself a little company, taking the savings from my tax concession and calling room service from my hotel residence.

Bermudian families get penalised while big business gets special treatment.

Yet another crazy example of compartmentalisation and cognitive dissonance from the party that demonises anyone who dare add branches to the Bermuda family tree and own property in Bermuda. Remember that? The whole we're protecting land from nasty foreign spouses shtick.

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Just so we're all clear here:

Everyday Bermudians have to license their foreign spouses if they want to own property, can't own more than one property with their foreign spouse and can't sell previously qualified properties to non-Bermudians, but a PLP benefactor at Coco Reef gets the sweetheart lease of the century and a green light to sell off Bermuda Government land for 120 years.

OK then.

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I'm convinced that if you sprained your ankle the PLP would propose amputating both your legs as a long term solution to ankle sprains.

This land license legislation is completely over the top, offensive, and unnecessary. Vexed is absolutely correct. Marginalising families because their spouses are non-Bermudian is only going to further drive wedges through this community. And what exactly does all this achieve?

Properties owned by Bermudian families with one not-yet Bermudian spouse should not be classified as foreign owned. Those are Bermudian owned. This claim of 37% foreign ownership of land is nonsense, because it's inflated by classifying mixed status couples as foreign.

What problem are we solving here? Fronting? This will do nothing to prevent fronting, because if you're going to front you sure as hell aren't going to register the front with the Government. And Vexed makes another good point that this same Government is happy to sell off tourism zoned land as fractionals with massive tax concessions to foreign owners, yet discriminates against Bermudian mixed status couple who buy property.

This is all compounded by the fact that it's impossible to make any sort of a nuanced argument when the Minister foams at the mouth if anyone dare suggest there's an easier more sensible way to go about things.

Right now the Minister and the PLP are creating huge legal uncertainties and expense without actually remedying a supposed problem.

This is the identical sledgehammer approach that we're seeing on term limits which is undermining Bermuda's viability as a financial domicile.

Contrary to Kath Bell's Letter to the Editor an autocracy is not a good thing, not even temporarily. In fact, Mr. Burch is a huge liability to Bermuda as a legislator. His skills lie elsewhere.

A friend recently said to me that there are thinkers and doers and that Mr. Burch is a doer. Give him a policy to implement and he'll get that done quickly and as intended, but ask him to think about the solution to a problem? Yikes. His trail of devastation is testament to this.

At its core, both of these issues boil down to the PLP's view of Bermuda being far too insular and inwards looking. Their dogma doesn't reflect the reality of life and the real world of interdependence that Bermuda has thrived in, and in many cases led the way.

Instead we've seen a shift in already restrictive but realistic immigration policies from the UBP era to ones that make no practical sense and end up alienating huge segments of the community, both local and foreign who have close social and economic ties.

Bermuda is a cosmopolitan place. We can't continue to thrive if we're at the mercy of an outdated mentality built on a fantasy about what Bermuda is and should be implemented by a guy who clearly has anger issues.

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I said in my Gazette column that there was going to be the need for a big fact checking exercise in this campaign, well the UBP sent me a press release dismantling the rather sparse content of what appears to be a rather hastily put together and misleading PLP housing insert in today's paper.

PLP “Progress Report” shows no real progress

By Jon Brunson, United Bermuda Party Shadow Minister for Housing

Most people know the PLP Government has done a poor job meeting the housing needs of people during its nine years in power.

And we believe most people have seen the frantic photo-op “activities” over the past few months – of groundbreakings and ministers touring half-completed projects – as nothing more than a last-minute pre-election scramble to portray successes where there have been none.

Today, the PLP itself has shown how empty its record on housing has been.

The glossy, multi-coloured “Progress Report” on housing inserted into The Royal Gazette is a sham. There is no other word for it.

We begin with the front cover. The photograph shows a blue cottage with a caption reading Rockaway Senior Housing Project.

But the cottage is not part of the Rockaway project. It is in fact a cottage located at Southside, St. David’s – a cottage that was designated for first-time homebuyers under a plan created with the United Bermuda Party in the mid 1990s.

Page 2. Here we see the image of what appears to be a pleasant family home under the headline: “Geared-to-income Housing a Success.” Well, it’s no home. It’s the Dame Marjorie Bean Hope Academy, a government school that provides educational and therapeutic services to students, ages 4 through 19.

It is, in our view, an extreme example of misleading advertising.

Page 3. Here we see the Rockaway Senior Housing Project in “various stages of completion.” Where to begin?

It is perhaps symbolic that 3 of the 4 photographs show incomplete buildings, but that’s not the story. The Rockaway development is a project of the Bermuda Housing Trust, a charitable organization to provide affordable housing for seniors. Yes, the government donated the land, but for the PLP to now take credit and score political points for housing built by an outside agency, without acknowledging the Trust, is not exactly being upfront.

On page 4 the brochure takes us back to the Dame Marjorie Bean Hope Academy.

On page 5, we’re back at Southside. Again, all the houses pictured were designed for sale to first-time homebuyers under the United Bermuda Party Government in the late 1990s, a huge success at the time. The plan broke new ground commercially by enabling purchases with a five per cent down payment – making it possible for many people to own their first home.

On page 6, we see photographs of ‘new housing’ at Anchorage Road in St. George’s. We celebrate the end result – 16 families living in 16 units, but one must remember that the project, from start to finish, took eight years to complete; eight years to build and renovate 16 housing units. Perhaps nothing better typifies PLP Government’s casual, disengaged approach to this basic issue than the eight-year Anchorage Road project.

Finally on page 7, we return for the third time to the Dame Marjorie Bean Hope Academy.

The glossy brochure finishes on the last page with the PLP slogan “Solid! As The Rock”, but the photographic claims in the preceding pages are anything but solid.

Finally, as a footnote, we must call people’s attention to the fact that two years ago when the Bermuda Housing Trust tried to impose huge rent increases on seniors in 82 units, the government sought to distance itself from the controversy and declined to intervene.

The United Bermuda Party Opposition led by John Barritt took up the cause of the seniors and launched a court action. The Government said at the time that we were playing politics with the issue. The court action was eventually settled on behalf of the protesting seniors, with the rent increases phased in over two years.

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A reader writes:

Question: If I do want to buy property and I have a non-Bermudian wife, I have to get her licensed..... Now does she have to wear that license around her neck or is the Government gonna just tattoo that right on her arm or something???

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A recurring theme in Housing Minister David Burch's complaints about delivering affordable housing is "greedy landlords". On September 27th he held a press conference where he eviscerated "greedy" landlords who are "wreaking havoc in the housing market."

"You have people around here extorting money from other people for accommodation that's up for rent and they're able to get away with it because the demand is so great," Sen. Burch added.

Ignoring the Minister's inability to grasp basic supply and demand economics and market forces, I thought it only appropriate to provide a very illuminating example of arguably Bermuda's greediest landlord: Senator Burch's Government.

You'll recall that Government spent 1.5M to renovate Clifton as the "Official Premier's Residence", which Alex Scott lived in for a few short months.

Subsequently, on acceding to the Premiership, Dr. Brown opted not to move in to the mandatory "Official Residence" and we were told that Government would be renting this property out to provide some revenue and recoup the renovation cost (seems reasonable).

Clifton was put on the rental market in April, with a target rent of $25,000 - $35,000 / month, easily qualifying as among the absolute highest rents in Bermuda.

How has that worked out?

Six months later it remains empty, the rent slashed almost in half and seemingly continues to generate little interest.

That's a greedy landlord indeed.

So let's work this out:

By pitching the rent so high the property has been empty for 6 months, which, if we assume it could ultimately be rented for say $15,000 per month (questionable at best as it has no pool) has lost the greedy landlord $90,000 - half of the annual rent they could have got if they put a more realistic asking price on it.

Now who's greedy?

Sure, it's greedy, but it's also just the Government asking above market for an inferior property, and the market correcting it. Welcome to Bermuda and the real world of capitalism.

That's what goes on every day in Bermuda's rental market. People want to get the most rent/sale price for their properties...including the PLP Government.

Another egregious example of greed was the Premier strong-arming the Bermuda Housing Corporation into buying his Flatts house, after it was rejected several times, for over the appraised value. The non-Ministerial home sellers wouldn't have been able to swing that kind of a deal. Membership has its privileges.

So let's drop the greedy landlord nonsense can we. Bermuda is a free market and the Government is playing the game just like everyone else.

The alternative (Government fixing rental prices) is far worse.

(All of this is in addition to the question of why a $1.5M renovation of a centrally located historic 4 bedroom property with extensive grounds has produced a home that can't command the rent that one would expect.)

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Newspaper headlines are important, because they are all that some people remember about an article and they set the tone for the reader before they read the first sentence.

So, the headline in yesterday's Bermuda Sun is both incorrect and irresponsible.

Is the "Average family home now $1.8m"? No. The article explicitly says so.

The "Average price of a home sold this year is $1.8M". Big difference. That's the average of transactions. To know what the average market value of a home is you'd have to do some sort of an appraisal on every property.

I know headlines are designed to grab a reader, the more sensational the better in a lot of cases, but this a) sets some sellers expectations to high, and b) further alienates those trying to get into an expensive market.

It's much like the headline recently where the Gazette said: "UBP is doomed to lose next election" - in quotes - from an interview with a former UBP party worker. First problem, he never said that. Those were the reporter's words, not Mr. Sullivan's. Since when does a paper quote its own reporters?

The other example was the Gazette's headline which read "Expert: Island is still a 'white supremacist society'".

What he said was:

"Is Bermuda a white-supremacist society? That's obviously a more complex question in a country with a black majority and a black-led government, the distribution of wealth remains racialised, however. And the attitudes of at least some white Bermudians reflect a commitment to white supremacy.

"As an outsider, I don't think my job is to answer that question but to raise questions that can help Bermudians understand their own society."

Mr. Jensen came close to saying what the headline said, but he didn't (although that is the sole reason he was get that headline.)

Headlines are important, perhaps more so, than the content of the article oftentimes. Many people don't pick up the nuances, they just take a superficial skim of the paper and take away little more than the headline and the first paragraph.

The papers (and this is more a fault of the editorial staff than the reporters who don't have much input into headlines) have a responsibility to be more accurate.

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Business Week has an interesting look at how the land crunch in and around Tokyo has inspired some architects to come up with some innovative designs.

Make sure to view the slide show.

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Get a load of this Bermudian sensationalism in Barbados:

[Opposition MP David Estick] charged that Arthur was leading Barbados down a similar path that now afflicted Bermuda, when instead he should be learning from the Bermudan experience.

The St Philip West MP said the average price of a house in Bermuda was $3.5 million and that price could increase to as much as $37 million.

He said that similar to Barbados, average Bermudans found themselves in a position where they could not afford to buy land or house.

He added it had got so bad that real estate agents had taken the Bermudan government to court on the issue of land sales.

Estwick added the government there had subsequently put a law in place where Bermudans were not supposed to sell their land to foreigners.

I'll ignore the use of the term 'Bermudan' over 'Bermudian'...damn you Microsoft spell-checker but...

Real estate agents taking the Government to court? Well, a private individual did.

The Government 'subsequently put a law in place' to block land sales to foreigners? Well not quite. They were taken to court after they put the ban in place.

But why let the facts get in the way of a good rant.

[CORRECTION: Originally I'd said that the average home price was more like $1.2M not $3.5M, but as someone pointed out, I was forgetting about the conversion between USD and the BBD, which resolves the discrepancy of the average sale price.]

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The controversial Tuckers Town House GoldenEye is being offered for sale on Coldwell Banker Bermuda Realty's website this morning. [I can't do a direct link. It shows up as a new listing on the first page right now, but if you really want to find it easily just sort by price descending.]

Interestingly the price is pegged at $22M. The numbers during the court case were much more in the 40M plus range I thought.

According to the reporting of the legal battle, the Marshall's invested $37M.

It's a bargain!

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Today's Washington Post has a guest Op-Ed by Daniel Mitchell of The Heritage Foundation, calling for the repeal of the recent US expat tax enacted by Congress.

UPDATE: A point of clarification. The article was not just calling for a repeal of the recent reduction in tax exemptions (ie. a tax increase) for US expats, but ceasing to tax US expats on their non-US income at all.

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Parental duties prevented me attending the Open House today of the Premier's new residence at Clifton.

If anyone did go I'd be interested in your comments.

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What a bunch of idiots. And that's being kind.

After dropping some serious change on a foreign lawyer (I guess the guys who crow about being pro-Bermudian have no faith in their own lawyers) to handle their appeal in the GoldenEye case, the Minister realizes that he's about to get his ass kicked a second time and begs for mercy.

The Minister feigned concern that a precedent would be set (ie. he was going to lose his appeal) and called off the appeal, allowing his impotent policy to stand...for now:

The impact of events on other Bermudians who may wish to sell their top-of-the-market homes to foreigners remains unclear. Mr. Jowell told the Appeal judges that the declaration that the policy was unlawful related entirely to Mr. and Mrs. Marshall who, he found, had their legitimate expectation to sell GoldenEye breached. He said that while that did not technically set a precedent for other people there are others who would like Mr. Froomkin to establish that they, too, had a legitimate expectation to sell their homes on the international market.

"The Minister is concerned that we don't in any way endorse the notion of a legitimate expectation," he said, explaining that the Government wishes the policy to stay in place. Mr. Froomkin said "anyone can bring a case at any time. The declaration is personal".

So, to be clear, the only reason the policy stands is because the decision overturning it has been stayed, not because it has withstood a legal test. No matter how they dress it up, Government completely and unequivocally capitulated.

I hope someone has informed the hapless Minister that a precedent has already been set. The next person who wants to sell will make the exact same case of legitimate expectation, and win; the Government's own Solicitor General was unable to argue successfully against that case, and it's obvious the big-money foreign lawyer they hired was about to suffer the same fate.

The lawyers must be salivating over the easy money they're going to make bringing case after case against the Minister.

We'll be back in November presumably, to revisit the appeal if Goldeneye isn't sold by then. Why did they defer it? Bad press? Imminent election?


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