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Divisive oversimplification

Jason Hayward, the Minister of Economy and Labour (Photograph by Blaire Simmons)

“Your experience is actually a common experience that persons are having and so we are going to reform the Landlord Tenant Act to ensure that there is an increase in the rights from both ends — there needs to be rights for the tenant as well as the landlord.”

— Jason Hayward (Minister of Economy and Labour)

Jason Hayward’s comment above also comes from The Royal Gazette’s April 24 story about a Progressive Labour Party town hall event. To fully appreciate his words, we need to consider the Government’s housing policies over the past few years — but, this time, after the pandemic.

During 2020, the first year of the pandemic, jobs filled fell even further to 32,427. Not to be forgotten, this is down from 40,000 filled jobs in 2008. Unsurprisingly, unemployment in 2020 rose to 7.9 per cent for the general population. It was even higher for Bermudians at 9.6 per cent, and it was a staggering 32.1 per cent for youth unemployment — those aged 16 to 24.

For additional context, the Labour Force Survey’s definition of unemployed is “all persons 16 years and older who during the reference period were without work but were willing and able to work for pay and who were actively seeking work”. This definition is directly relevant to another segment of the population called “economically inactive”. This segment “includes all persons 16 years and over in the population who during the reference period were neither employed nor unemployed”. The number of people defined as economically inactive was 14,405 in 2013. By 2021, the number of economically inactive persons rose to 17,864.

There is a great deal to unpack from these bleak labour statistics. Although I have no statistical proof, it is pretty safe to assume that the deteriorating labour market exacerbated landlord/tenant problems. To what specific degree, it is impossible to tell because the Government doesn’t track the housing market. Nevertheless, the key point here is that trends such as an increase in rental delinquencies, evictions, antisocial behaviour, insufficient housing supply, etc are very difficult to factor into the Government’s housing policy if the Government is not monitoring the trends in the first place.

Consider the launch of the Work From Bermuda initiative in August 2020, for example. This is more commonly known as the digital nomad programme. The initiative was intended to help our fragile economy during the pandemic. The basic idea was that if professionals around the world were being forced to work remotely, they could do so from here. Bermuda could in turn reap much needed foreign capital. The downside of the programme is that it had the potential to create additional pressure on the housing market, especially if rent-controlled units could now participate in the holiday rental property market.

In March 2021, seemingly without conducting any analysis of the housing market, the Government also passed the Rent Increases (Domestic Premises) Control Temporary Amendment Act. This additional Act increased the maximum holiday rental property term from six months to 12 months. The change was intended to make it easier for a digital nomad to work from Bermuda for a year without having to worry about their holiday property lease coming to an end within six months.

The Temporary Amendment Act made a great deal of sense for the Work From Bermuda initiative. However, while the Government was making it easier for digital nomads to rent properties for longer periods, filled jobs were dropping further to 31,316. Although we do not have unemployment statistics for 2021, you don’t need to be a rocket scientist to figure out how increasing the holiday rental term to 12 months would play out in an increasingly distressed rental market.

In March 2022, more than two years before Mr Hayward spoke at the town hall, the Department of Consumer Affairs issued its annual report to the Government. The report expressed concern that landlords were using the holiday rental programme to address problem tenants:

“At this stage it is worthwhile noting that since the enactment of section 6 of the Rent Increases (Domestic Premises) Control Act 1978, and the Temporary Amendment, the CA has observed a continuous uptake of residential landlords seeking to have their residential units certified as vacation rental units; 2019 – 283 certificates issued, 2020 – 307 certificates issued, and 2021 – 337 certificates issued.

“Following discussions with various landlords, the CA is of the understanding that landlords are not confident in their ability to obtain adequate legal recourse through Bermuda’s courts in the event they are faced with a tenant acting in contravention of their signed tenancy agreements [ie, timely payment of overdue rent, damage to property, ability to pursue eviction and possession of the residential unit].”

Despite these landlord/tenant issues being flagged, the next year the Government introduced the Vacation Rentals (Application and Registration) Fees Act 2023. There was no mention in the Act’s explanatory memorandum about the landlord/tenant issues raised in the Consumer Affairs Annual Report. There was no mention of the impact of holiday rentals on affordable housing. The Government did not even provide any research on the potential impact of the new holiday rental fee on the industry. Seemingly without regard to the significant socioeconomic issues at play, it simply introduced a regressive tax.

It is now May 2024, at least ten years after Bermudians began renting homes on Airbnb. It is six years after rent-controlled properties were permitted to participate in the holiday property market. It is four years after the Work From Bermuda initiative was commenced. And it is more than two years after the Consumer Affairs report warned the Government of landlord/tenant issues.

With all the time that has passed, and given the information we do have, it is painful to see Mr Hayward say that the Government is going to reform the Landlord Tenant Act in some unknown way, at some unknown point in the future. It is equally painful to see him insinuate that the housing crisis is simply a matter of Bermudians discriminating against Bermudians with comments such as:

“If the mindset is that Bermudians will not rent to Bermudians, there is going to be more reliance on the Government.”

The “mindset”?

I find that incredibly insulting. Our housing situation, both pre and post-pandemic is far more complex than Mr Hayward’s divisive oversimplification. Are there bad landlords out there? Of course. But what about the Government’s responsibility in the housing crisis? What about the self-inflicted wounds caused by their mismanagement of well-intentioned housing initiatives?

I won’t be holding my breath for answers. The one thing I do know is that the Government is not going to even begin to fix the housing crisis by taking cheap shots at landlords.

Bryant Trew can be contacted via e-mail at bryanttrew@mac.com

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Published May 23, 2024 at 8:00 am (Updated May 23, 2024 at 7:25 am)

Divisive oversimplification

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