rents at the top of the housing scale. If local chatter is to be believed, rents as high as $25,000 a month are being paid for a rather non-descript house which is not on the water. Stories about people leaving their homes in order to collect high rents are legion and sometimes the rents being "reported'' are exaggerated. However it does appear that so-called "executive'' rents have taken a large jump in recent months in response to the demands of a few incoming companies.

There have been warnings from serious people that companies will not come to Bermuda if housing costs are so high. The warnings may well be true but the problem is not one-way. Rents in Bermuda have been low for a long time in comparison to the costs of construction and purchase of housing. Then too, some responsibility must fall on the companies which, to get what their executives want, are offering to pay rents owners never thought they would see. There may only be a few very high rents but the problem is that once a few pay these rents then the rents will become the standard to which rents will rise or be increased when leases expire. We may be in a period of intense rent adjustment.

For a long time there was a shortage of low and middle income rental housing.

That is no longer true for a number of reasons, one of them the fact that there are fewer guest workers in Bermuda. But, despite the recession, there appears to have been continuing sales and rentals of the limited number of higher priced properties.

Some of the problem today arises because rents lagged behind the cost of building and may now be catching up. It is also fair to say that rents were not high in Bermuda when compared to similar locations. It must also be said that today the United States is inexpensive compared to the realities of the rest of the developed world. It is not fair to compare costs in an island like Bermuda which imports everything, to costs in an industrialised country which uses what it produces and manufactures. In Bermuda rents have been surprisingly low given the price of land and the cost of building and repairs.

Rents have, of course, been low because much of the privately owned housing stock was built at a time when costs were a fraction of today's costs. But as houses change hands new owners have a reasonable expectation of rents of about ten percent a year of the cost of the house. As a simplified example, a $500,000 house should produce $50,000 a year or over $4,000 a month. There is therefore an inequity with $25,000 a month rents but there is not a problem with many rents.

The housing problem really arises with Bermudians who have a long history of owning homes and a reasonable expectation of owning their own home. That is becoming increasingly out of the reach of young Bermudians. That could become harder if rents follow the lead at the top and escalate across the scale.