Up to 80 families in subsidised housing will be moved into the private rental sector or encouraged to buy their own home.

Housing Minister David Burch said ten percent of Bermuda Housing Corporation (BHC) tenants can now afford to move out, as they have savings but "either do not know how or have chosen not to buy a home".

Senator Burch announced the move as part of a raft of measures aimed at levelling the playing field when it comes to social housing. This includes adjustments to standardise rents on properties, but no tenant will face more than a ten percent increase.

The BHC meanwhile, has informed its tenants in a letter that they are now subject to a time limit and can only reside in its units "for a specific number of years". Government and BHC are to encourage tenants to save up for their own home instead, through the Rent Geared to Income programme.

The scheme, which began last month, calculates rent at 35 percent of a tenant's household income, ten percent of which is set aside in a compulsory savings plan. "One immediate benefit is that the Bermuda Housing Corporation can set a rent that is fair, based on the tenant's actual income and not on the market value of the property," said Sen. Burch.

But he said rents would also be standardised according to the size of property. "Historically the rents charged by the Corporation have not been consistent, so the first step was to establish a rental rate grid for each type of unit in the BHC inventory (studio, one-bedroom, two-bedroom, three-bedroom, etc.), to establish a benchmark across the portfolio of rental units."

As from January, all annual leases are subject to this review and to client assessments based on household income.

Sen. Burch said: "Rent increases will only apply to those households whose incomes support such an increase.

"For example there are households where the income is in excess of $10,000 per month but the rent is not only below the regular market rates, but at rates lower than the amounts in the BHC market rate chart.

"Conversely, we have a three-bedroom home currently renting for $429 to a family that has lived there for more than a decade. "Clearly, there is no fairness in these two examples and it is this type of anomaly that we are attempting to address."

The Minister said BHC will "develop a plan with clients to move them on to home ownership instead of becoming lifetime tenants of the BHC".

Those who have savings can expect to be moved on. He said BHC aims to "free up rental units by moving clients who can afford and should be in the regular rental market, or can afford to buy a home".

"There are a number of clients who have savings and either do not know how or have chosen not to buy a home," said Sen. Burch.

"Freeing up units increases our rental stock to provide homes for those on the waiting list, and is far more cost effective and timely than simply building additional units."

However, the housing corporation will also "create a system which fairly deals with tenants who have lived in BHC houses for years, but who have not saved any money or made any attempt to move on, and thus have developed a sense of entitlement to the properties".

The Minister said: "The vast majority of clients will not see a rent increase at all but this process is vital to the implementation of Rent Geared to Income housing, and affords the Corporation the opportunity to provide the hand up to families in need.

"Let me stress that the Bermuda Housing Corporation of today is not a punitive organisation but rather one committed to fairness. I would encourage any tenant who has concerns about the letter they will be receiving or any other matter, to make an appointment with the appropriate officer at the Corporation and receive the help we are anxious to provide."

The Corporation's letter to tenants says "all rents will be modified at the signing of your new lease agreements".

It states: "While maintaining our mandate to remain affordable, and considering that rents have not increased in many years, please be advised that we have recently streamlined and standardised all rents for this upcoming fiscal year."

It adds: "Tenants will find that rents will increase no more than ten percent at any one time."

The letter also says BHC is "implementing a policy of time limits on all lease agreements".

Said support services manager Desiree O'Connor: "This means that tenants are expected to follow a progress plan and be allowed to reside in BHC units for a specific number of years with the goal of home ownership (if feasible) as part of the plan."