One of the mysteries of the Bermuda economy is why there is a rental housing shortage.

It is generally accepted that the island’s population has shrunk in the past decade or more, while the number of homes has, if anything, increased. Yet, affordable rental housing is harder than ever to find. Prices have risen when the law of supply and demand dictates they should have fallen.

The reasons are multiple and complex, and the Chamber of Commerce’s analysis that household sizes have shrunk, driving demand, is a striking insight.

But one of the other frequently cited causes is that many landlords have simply withdrawn their rental properties from the market. This seems to be especially true of older landlords who may have built or bought a home with one or more apartments attached decades ago.

The house or apartment was rented and helped to pay the mortgage. Once the mortgage was paid, that additional apartment was intended to become the owners’ financial support for old age, given Bermuda’s often inadequate pensions.

But in some cases, the bitter experience of non-payment of rent, or severe damage to rental properties, exacerbated by the tortuous experience of trying to get tenants out or arrears paid in Magistrates’ Court, has driven those landlords either out of the market or into the short-term rental sector.

There are also plenty of examples of scurrilous landlords who charge exorbitant rents or fail to maintain their properties.

These are the problems that the recent consultation of the Landlords and Tenants Act and rent control laws attempt to remedy. The goals are to ensure that tenants are treated fairly and that landlords are willing to stay in the market.

The Government and Alexa Lightbourne, the home affairs minister, deserve credit for taking on the reform, which is long overdue.

Politicians have avoided stepping into this minefield, and the draft of the new legislation that was circulated shows why. Getting the legislation right is difficult.

In fairness, the draft Bill does not appear to tilt too far towards either the landlord or the tenant.

Instead, it is flawed in both directions. It can be argued that many of these problems will have been identified in the consultation, which has been wide.

Two of the more egregious mistakes are, first, allowing landlords to demand a maximum deposit of three months’ rent, which will be unaffordable for many tenants, and, second, an overly laborious process for the disposal by landlords of tenants’ property once they have vacated a property.

Another section seems to allow landlords to charge 5 per cent a day for rents in arrears, meaning that a tenant who fell one month behind on their rent would have to pay an additional 150 per cent in arrears, as well as the original rent. This cannot have been the intention.

The thorniest issue concerns the establishment of a tribunal which would adjudicate landlord-tenant disputes.

The need for such a tribunal is clear. Magistrates’ Court, where most of these disputes end up, has proved inadequate to the task. Disputes take months or more to be heard and decided, and neither tenants nor landlords are left satisfied at the end. While a cynic may argue that this means the result is fair, the degree of dissatisfaction shows the system is in fact broken.

But the tribunal as drafted does not seem to be fit for purpose. Under the draft law, the chair and deputy chair will be lawyers, but it is not clear how many other members it will have or what their duties are, beyond hearing cases.

While it is important to have found legal knowledge available, that is not all that is required. People from the real estate industry who have day-to-day knowledge of the problems that arise would bring much to the table, as would consumer advocates.

Worryingly, the tribunal does not seem to anticipate any attempts to resolve disputes before they come to hearing for adjudication. Other commissions, notably the Human Rights Commission, are required to seek resolutions through mediation before being referred to tribunals.

While the tribunal may well be more efficient and focused than Magistrates’ Court, a mediation process would seem to be an obvious avenue to take before the parties end up in a quasi-judicial process, which will be lengthy and potentially expensive. A neutral mediator who can either quickly find a compromise or advise the parties of the strength or weakness of their case would solve a lot of problems before a hearing takes place.

To some degree with rent control issues, this happens now as the Consumer Affairs Department deals with tenants and landlords while wearing its Rent Commissioner hat. But there seems to be no role for the department in the new legislation.

There are other problems with the legislation as it stands, and it is to be hoped that they will be resolved through the consultation.

Again, Ms Lightbourne deserves credit for taking on a difficult issue, but if she was being marked for this in a classroom, the examiner’s comment would be:

“Good effort. Could do better.”

Fortunately, there is still time to get it right.