The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The growing “crisis” sparked by a lack of affordable employee housing is threatening to impose a “stranglehold” on Family Island growth prospects, business and tourism leaders are warning.

Multiple Chamber of Commerce presidents and senior officials told Tribune Business that the numerous investment projects targeted at their islands, as well as the post-COVID surge in stopover visitor numbers, are threatening to outstrip the capacity of the local workforce as well as existing physical infrastructure to properly support and service them.

And tourism executives warned that staff shortages, with workers unable to relocate to the Family Islands due to high costs and a lack of housing, threatens to cause poor and slow service that will exacerbate visitor complaints that these locations are too “expensive and pricey”. That was identified as the leading concern, attracting 29 percent of complaints, by a recent Ministry of Tourism exit survey of visitors to Eleuthera.

Thomas Sands, the Eleuthera Chamber of Commerce president, told this newspaper that most Family Islands were unprepared to handle the level of development they now face despite being aware that it was coming. The shortage of staff housing, which has become “very acute” on that island as well as Exuma, has been worsened by many landlords converting their properties into Airbnbs to target what they see as the more lucrative foreign vacation rental market.

“We have multiple challenges with long-term and short-term accommodation to grow all aspects of our economy,” Mr Sands explained. “The level of growth taking place has essentially meant there’s little to no inventory available at either level. It is something that is going to have to be resolved as quickly as possible if people want to move back as businesses and investors go to operations.

“What we’ve seen with major developers like Disney is that they’ve had to put in man camps and expand those camps. They started their own man camp at 300. I believe they’ve increased it to 500, and I believe they’re increasing it again. In addition, their general contractor [American Bridge] has exhausted rental housing in the community/

“It’s across the board. We’re getting calls from people on a regular basis over persons who want to move here or are moving to work for someone here. You’re a small business looking to expand, and you have to look for persons who can move to the island. What do you do about accommodation for them? There is a major challenge, and some creative solutions have to come into play.”

While no assessments have been done to quantify the affordable housing shortage on an island-by-island basis, Mr Sands and others said the problem is very real and only getting worse. The Eleuthera Chamber chief added, though, that the situation represents “an investment opportunity - if the pieces can be consolidated” - for Bahamian developers to invest in affordable housing solutions and subdivisions.

Mr Sands said it was vital that the Government offer tax relief, via VAT rebates and other “creative formulas”, to incentivise Bahamians to construct homes or short-term rentals on Eleuthera and other islands by reducing construction costs. “The cost of construction has increased so drastically, but we import everything into the Family Islands again, so it adds 40-50 percent in increased costs,” he added.

“We almost need to pull out all the stops to incentivise people to invest in the Family Islands. There’s also a challenge with access to real estate. There’s very few subdivisions where you can go in and purchase a lot to build. The next thing is the cost of infrastructure that’s required for those subdivisions.

“A group of us looked at the expansion of a subdivision, and by the time we made sure we had complied with the regulations, it set the cost of development at least three-four times what you spent to purchase the lot. It went to $30,000 to $40,000, and those lots used to sell for $11,000 to $15,000. Some costs, some inventory has to align.”

As to the consequences if the housing shortage is not remedied, Mr Sands replied: “Let’s take it from a Bahamian perspective. You want to grow your business, and that means looking for employees. You’ve exhausted available staff locally, and are looking for employees who are going to migrate back or move over for the first time. They have to find some accommodation in order for you to employ them.

“It’s an added factor of cost, and an added factor you have to overcome. If that housing doesn’t exist, people won’t move, and if the price points are too high because of lack of availability the economy is not going to grow at all levels. It’s a hindrance to growth. 

“It’s another of these challenges with infrastructure not being prepared for growth to take place. It’s another prime example. The good thing is we’re seeing growth that we’ve not seen in a very long time. But we were not prepared for it. Although we spoke about it multiple times, we did not prepare in advance for it. This thing goes to airlift, healthcare, police, roads, power and water.”

Juan Fernandez, Carnival Cruise Lines’ vice-president of operations strategy, voiced concern about the lack of available employee staff housing at the recent Eleuthera Business Outlook along with others. The topic was also discussed at last week’s Bahamas Hotel and Tourism Association (BHTA) board of directors meeting, where it was viewed as an impediment to spreading economic and tourism growth throughout the Family Islands.

Kerry Fountain, the Bahamas Out Island Promotion Board’s executive director, told Tribune Business that the investment of an estimated $263m in collectively upgrading 14 Family Island airports to facilitate increased tourist arrivals will be undermined if there are insufficient resort staff and others to properly cater to their needs.

Acknowledging that vacation rental growth has reduced the supply of long-term housing on popular Family Island destinations, Mr Fountain said he was not criticising landlords who have switched to this segment from renting to Bahamians. “Smart home owners, and it’s no fault of theirs, the houses they had rented at $1,500-$2,000 a month to a staff member or two, they’re able to rent that same house on Airbnb or VRBO for $200-$250 a day.

“The choice for them is a no-brainer. They’re now not in the monthly rental business; they’re in the daily rental business. I’m glad to see every Bahamian benefiting from the golden tourism goose; I’m not knocking that, but we can see in 18-24 months, when those new airports open up, we will need more staff to work on those islands because more people are visiting. Yet we don’t have affordable housing.”

Mr Fountain said that, of the top five visitor complaints, being a too “expensive and/or pricey” destination led the way with “slow service” and “restaurants and amenities closing to early” being among the other two. With The Bahamas unlikely to significantly reduce the cost of doing business in the short-term, he added it was vital that the quality of the visitor experience and guest service exceed expectations - something that will not happen if there are too few tourism industry staff.

“What we cannot be is expensive and pricey, but also provide slow service,” the Promotion Board chief warned. “Where are we going to get the staff to operate if they cannot move to the island because it is too expensive to live. Again, if you do not have the staff you will have to close early because they’re not going to want to work at 11pm or whatever it is.

“If we’re going to get more people to work on these islands we now have to start addressing the cost of living on these islands. No one will want to go to Abaco, Andros, Exuma, Eleuthera if what they are making they are also paying in rent. We don’t realise it, but it’s a serious crisis.

“The crisis is not just to replace homes lost in Dorian. This shortage of affordable housing on Abaco quite frankly opened our eyes to issues we are having not just on Abaco but which we have been having on Exuma for quite some time and on Eleuthera. We have a crisis but don’t realise it.”

Daphne Degregory-Miaoulis, the Abaco Chamber of Commerce president, said the island’s post-Dorian housing shortage remains “extremely acute”. She added: “I would say it’s definitely having an impact on economic and social development. We still have teachers, doctors and civil servants that don’t have affordable housing...

“We also have a shortage of skilled labour because there’s no place to live. It’s hard to recover if you don’t have the staffing. We’re still basically in a stranglehold on skilled labour.”