Let me pose a question that makes some people uncomfortable. Can we have a housing crisis and a shrinking population at the same time? In most countries, you would be forgiven for assuming that fewer people means fewer housing pressures. In Bermuda, that assumption is dead wrong, and the evidence is damning. As I explained in my three-part series on housing last month, as of May 2025, Bermuda had 32,484 total residential dwelling units, representing a net increase of only 614 units since 2016, which is a growth rate of just 1.9 per cent over nine years.

In that same period, the average household size has declined to approximately 2.08 persons, driven by our ageing demographics, rising rates of single-person households, and a generation for whom a spare bedroom has become a home office. You can have a shrinking population and a worsening housing shortage simultaneously. Bermuda is living that contradiction right now.

The construction pipeline offers no comfort. Building permits are at historically low levels, equating to approximately five per month. New unit completions average approximately seven a month, or 84 a year. At that rate, it would take 30 years to build 2,500 units, and that assumes every completed unit is immediately available to Bermudians at an affordable price, which the evidence flatly contradicts. The median cost of a Bermuda home has reached $1 million. Buyers cannot buy, builders cannot build, and renters cannot find a unit. These statistics, again thanks to the Chamber of Commerce and Home, are worth repeating. Over and over.

So what do we do? The answer, in part, and as the One Bermuda Alliance has said repeatedly, is to build up. We all agree that Bermuda cannot sprawl outwards. Our 21 square miles of land are finite, and what is left of our green spaces and agricultural land should be treated like a national treasure. The only logical direction for growth is vertical.

The City of Hamilton Plan 2025 has taken a step, replacing rigid, citywide height limits with a more place-based, context-sensitive approach, but we must be honest that this is the beginning of a conversation, not the end of it. Designated zones where higher-density residential development is incentivised through planning reform and financial instruments are not a threat to Bermuda's character. They are a response to it. If we are seemingly prepared to accept expandable container homes, then surely we can accept higher buildings like in most other countries, whilst retaining our unique architecture.

Construction replacement costs now exceed market values by more than 20 per cent in many cases, which means private developers have almost no financial incentive to build new affordable stock. The solution cannot be to wait for the market to self-correct. We need the government to continue to lower the cost of building through customs duty reform on building materials, through streamlined planning approvals, and through sensible density bonuses for developers who include genuinely affordable units. If we want more homes, we have to make building them worth the risk. This could include a Tourism Incentive Act-style piece of legislation to encourage higher builds.

Housing and skilled immigration are often treated as separate conversations, but they are connected. More people in Bermuda means more demand for housing. More demand for housing means more construction. More construction means more Bermudian jobs. This is not a theory, it is arithmetic.

When Bermuda's population contracted after 2008, it was not just our tax base that shrank. It was our rental market, our retail sector, our hospitality industry, our professional services. Empty houses do not pay rent to Bermudian landlords. Empty restaurant tables do not keep Bermudian waitstaff employed. Every working resident who calls this island home is an economic multiplier.

The 2023 National Economic Report is instructive here. Jobs increased by 2.9 per cent in that year, driven primarily by growth in international business and the recovering accommodation and food services sector. The international business sector provided 4,909 jobs, a 4.6 per cent year-over-year growth. Gross Domestic Product per capita grew to $122,253 in 2022, driven by economic activity that depends, fundamentally, on a working population of sufficient size and skill.

The argument that skilled workers displace Bermudians has been empirically discredited. The Fiscal Responsibility Panel said it clearly: “Immigrants and returning Bermudians with the right skills will help to create jobs, not displace them.”

More underwriters, both foreign and Bermudian, means more Bermudian underwriting assistants. More international business professionals mean more Bermudian accountants, lawyers and service providers meeting their needs. More people on the island means more restaurants, more retail, more construction and more Bermudian livelihoods.

I want to say something to the Bermudian worker reading this, because this matters. Growing our population is not about pushing Bermudians aside. It is about rebuilding the conditions in which Bermudian talent thrives. The argument the OBA has made for years, which too many people dismissed and conveniently ignored due to political expedience, was precisely this. A larger, skilled, stable population makes Bermuda more prosperous for everyone. The opposite of what was feared happened when we chased people away. Bermudians did not step into the vacant jobs. They lost the jobs they already had.

Tourism is the other engine we have left idling. In 2024, Bermuda welcomed 139,546 leisure air visitors, a rise of approximately 15 per cent over 2023, with total visitor spending reaching $531 million, exceeding pre-pandemic 2019 figures. There is genuine momentum here. Yacht arrivals surged 41 per cent in 2024, with 79 superyachts visiting the island. Business visitor numbers also grew 6.7 per cent year-over-year.

However, 2025 showed how quickly the picture can change. Total air visitors fell 1.9 per cent, with leisure arrivals declining 3.4 per cent. The renovation and closure of major properties, Fairmont Southampton and Elbow Beach among them, temporarily constrained our hotel inventory.

Growing tourism will require tough choices. It will mean investing in airlift, in product quality, in the year-round offerings that make Bermuda compelling in January as well as July. It will mean developing our culture, our dining, our water sports and our natural beauty into a coherent proposition for the high-spend traveller we want. None of this is easy. None of this is cheap, and none of it is possible without a stable, growing workforce to deliver the visitor experience that justifies our premium positioning.

The economy, the housing market, and population are not three separate issues. They are one issue, looked at from three different angles. We cannot fix one without addressing the others. The Bermuda Chamber of Commerce said as much: the housing crisis and the population crisis “are joined at the hip”. They are right.

Tomorrow: Bermuda’s pension bomb

• Michael Fahy is the Shadow Minister of Economy and Labour, and Housing, and is the MP for Pembroke South West. He can be reached on mfahy@oba.bm or opedfahy@gmail.com