Land policy comes under fire
National Security Minister Wayne Perinchief
yesterday defended Government’s handling of a controversial land policy in Parliament yesterday.
Mr Perinchief faced robust questioning from Opposition figures shortly after announcing the key changes.
But in a novel twist, a question from his own Cabinet colleague, Deputy Premier Derrick Burgess, forced Mr Perinchief to admit that the amount of land owned by non-Bermudians has already exceeded the statutory limit.
And Government came under fire from the One Bermuda Alliance for “doing more to harm the Bermuda economy than any other single entity” through policies like the land licence policy.
Mr Perinchief had announced that Government would allow land above a certain annual rental value to be sold to non-Bermudians, reversing the policy which prevented Bermudians from selling to non-Bermudians.
He also revealed that Bermudians married to non-Bermudians would no longer be required to obtain a licence to buy land, provided it is for their first home.
Mr Perinchief was asked by Kim Swan, who was elected as a United Bermuda Party MP, how much money Government had made from the land licences since that policy was implemented in 2007.
The Minister responded by saying the information was in the Budget book.
Mr Swan then asked whether the Minister had concluded that the original policy was “draconian”.
“It was brought into place to stop fronting. That has now been stopped. And to preserve land for Bermudians.”
Ruling party backbencher Dale Butler then asked: “Can the Minister, Mr Speaker, in light of an alleged leak of his statement indicate if he is going to resign, cross the floor or open an investigation as to how this happened and tell us what will be done to prevent this in the future?”
Mr Butler was referring to this newspaper’s story about the Minister’s statement.
Mr Perinchief told the House that no leak had occurred but that he had authorised release of a “small, abbreviated teaser to the press”.
He said: “There was no expectation of pre-empting the House and if there’s an apology to be given, I now give it.”
One Bermuda Alliance Shawn Crockwell put it to the Minister that he had in fact reversed policy because the policy was wrong.
“There’s no culpability here. Any prudent Government, using principles of good governance, changes policies according to the financial situation, and that’s what we have done,” the Minister replied.
“It’s an adjustment to a policy which became dated and we now find that it had to be amended.”
Mr Crockwell then asked whether the Minister agreed that the policy restricting land sales to non-Bermudians by Bermudians, had “suppressed the real estate market and hurt the economy”.
Mr Perinchief said the new policy allowed Bermudians to sell to foreigners if their property was in the $177,000 ARV band and that “stimulates the real estate market”.
Mr Crockwell asked whether the policy requiring licences for mixed couples had suppressed the market. The Minister agreed that changing the policy had stimulated the market.
“Lenders were confused as to who was allowed to buy property and who was not. And that did cause a problem,“ Minister Perinchief said. “So it has removed the barrier and it has satisfied a need to restimulate the market. So you can interpret that any way you wish.”
Pat Gordon-Pamplin of the OBA referring to the Minister’s statement that illegal fronting had been “prevalent” asked the Minister how many prosecutions had been brought against fronting.
He said he was not aware of any prosecutions but one property was forfeited to the Government.
A question from Deputy Premier Derrick Burgess, revealed that the limit on land holdings to foreigners had already been exceeded.
“Minister Perinchief, is it a fact that 37 percent of our 6,000 residential acres are owned by non-Bermudians and the main objective of this Government was to preserve land for Bermudians?” asked Mr Burgess.
“That is correct. I believe the figure is 2,300 and some acres,” he said.
“We’ve actually exceeded the allocation to be sold to foreigners. We are really moving close to the mark now in even expanding it further but we’re loath to do that.”
Shadow Education Minister Grant Gibbons, referred to the Minister’s comment that local lending institutions should reduce downpayments, and asked whether the Minister had discussed the matter with the Bermuda Monetary Authority.
The Minister said that a discussion had been had with one lending institution which had indicated that 100 percent mortgages had resulted in some mortgages being considered sub-prime.
“We have not put any pressure on the lending institutions at all,” he said.
Dr Gibbons then suggested that the Minister was not aware that the BMA had tightened up capital requirements and required banks to take a “more conservative lending position”.
Mr Perinchief said he was aware of the BMA policy.
The OBA later issued a statement which criticised the Government’s handling of land policy.
The party said that it welcomed the reversal of policy, but said: “The damage from its flawed policies has caused untold stress on Bermudian families, in the form of lost jobs for thousands, reduced paycheques and shrinking business earnings.
“The Government has been in damage control for most of the past year, scrambling to reverse policies that have not worked. Today’s rollbacks on land policy are the latest step in this process.”
The land policy “was bad policy from the start,” according to the OBA statement. “It discriminated against Bermudians who happened to fall in love with and marry non- Bermudians, instantly making them second class citizens in their own country.
“It undermined the value of real estate owned by hundreds of families.
“And it gave international business people one more reason to consider moving their businesses elsewhere. The outflow of international businesses to other jurisdictions cannot be separated from the 2007 legislation, and every Bermudian who saw their rental income go down or disappear since should consider the cause.
“The Minister, by stating that today’s policy reversal is intended to ‘stimulate’ the economy, is admitting the 2007 policy helped depress it.
“The Minister, by stating the 2007 policy ‘unduly and adversely’ affected Bermudians married to non-Bermudians, is admitting the discrimination at the heart of the policy.
“We sympathise with the people who had to pay for a licence during this period. For many, it severely strained family budgets and was fundamentally unfair. Perhaps the Government can address their concerns directly.
“The reversal of the 2007 land policy a policy that went too far - is welcome.”