The Tribune

By Neil Hartnell

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian developer yesterday warned “there’s no silver bullet that cures all” housing shortage ills while asserting that persons would be “shocked” by how much land prices have increased since 2000.

Franon Wilson, Arawak Homes president, told Tribune Business he and his executives had found “a huge gap” when they recently obtained back issues of this newspaper and the Nassau Guardian to compare 2024’s vacant New Providence land prices with those from as far back as 2010 and the turn of the century.

While the exercise did not involve like-for-like comparisons of the same property, it did show that the price for a 10,000 square foot parcel in Sea Breeze Estates had jumped from $115,000 in 2010 to $150,000 in 2024. While these are different vacant lots, the $35,000 increase represents a 30.4 percent increase in 14 years.

And the cost of a near-10,000 square foot lot “off Carmichael Road” had near-tripled during the first 24 years of the 21st century. While one such property was advertised in the newspapers for $50,000 in 2000, another - slightly smaller at 9,600 square feet but in the same location - was listed in the newspapers for $147,000 last year.

“When you look at it, it helps to show what is happening,” Mr Wilson told this newspaper of the raw data assembled by Arawak Homes. “I can tell you it’s significant,” he added of the vacant land price appreciation over the past two-and-a-half decades. “If you did that exercise you would be shocked.

“When you look at how much property has increased in value from 2010 to 2020, if you continued that exercise today, I think there would be an even higher jump, especially in western New Providence; especially there. So it really highlights that when we speak about the challenges of home ownership, a lot of factors have to be considered.

“One of the factors is what someone has to pay for a piece of property. That went up to 2020 and 2024, and I’m sure that if you did this for 2025 those figures would be significantly more. A lot has changed since COVID. Someone looking to buy and develop a property, they have to pay so much more but the reality is salaries have not kept pace with how much properties have appreciated in value. That is one of the challenges we have.”

Mr Wilson added that, while “people throw that word out” when describing The Bahamas’ affordable housing shortage as a “crisis”, there “is definitely something going on” and “an issue for sure”. Keith Bell, minister of housing and urban renewal, last year said there was a 12,000-unit affordable housing shortage, and the Government has recently signalled it is looking at further reforms to address complaints by tenants that landlords are imposing massive rent increases without warning.

However, both Mr Wilson and Matt Sweeting, managing broker at REMAX Bahamas, cautioned that implementing stricter rent control or price-cap measures threaten to “stifle development” by preventing landlords from earning the necessary investment returns required to make their financial models viable.

Overly-aggressive regulation, they signalled, could drive landlords into a loss-making position and out of the market as they, too, have their own costs to cover. Such a scenario would threaten to further reduce the availability of affordable rental accommodation - exacerbating a housing and achieving the very opposite of the Government’s policy intent at a time when many landlords are shifting from long-term to shorter Airbnb-type vacation rentals that are perceived as higher-yielding and more lucrative.

Both Mr Wilson and Mr Sweeting argued that, instead, the Government should examine relaxing zoning regulations and other restrictive covenants in single-family residential areas to allow landlords to construct an efficiency apartment or additional unit to their properties.

This, they added, would represent low-hanging fruit that increases the affordable housing supply without needing to develop additional land. Property owners could also generate extra income, but Mr Wilson said such initiatives would have to be co-ordinated with Bahamas Power & Light (BPL) and Water & Sewerage Corporation given that the utilities’ infrastructure may have been designed to only accommodate a certain number of connections in a particular area.

“There’s no silver bullet that will cure all,” Mr Wilson told Tribune Business of the affordable housing woes, “but one possibility to address home ownership is create more inventory by allowing people in single family-zoned communities to add an efficiency on to their homes. We can get more inventory on the market without developing more property to do so.”

He was backed by Mr Sweeting, who told this newspaper he often felt “almost like a food server that doesn’t have enough food to serve the public” because of a lack of sufficient available inventory to show how clients.

“What the powers that be may consider is some kind of allowance for people to build an additional unit on to their existing property, provided they meet some setbacks and so forth,” Mr Sweeting explained. “While we don’t have much land left on New Providence, it would address the housing concerns. It would give owners a source of rental income and address the housing shortage.”

As for any possible government move to impose tighter rent control and other price cap-type measures, Mr Sweeting acknowledged that “it’s a very challenging balance to meet” given the competing interests of landlords and tenants.

“These are property owners’ financial investments that have been made in construction, electricity and maintenance, and they are increasing their [rent] prices because of the high cost of living,” the REMAX Bahamas chief said. “It’s a difficult balance to meet. This relaxation of zoning is a way for the Government to alleviate this housing concern.

“It will grow the rental market, and create work for people right away. People ask why an Elizabeth Estate efficiency is being marketed for $1,000 per month. It’s because there’s not enough inventory. If there’s a lot more inventory, then the correction the public desperately wants and the Government is working to obtain, will be achieved.”

Mr Wilson, too, signalled that the Government needs to be cautious about imposing price control-type restrictions in the housing and rental markets because interfering with market forces will likely provoke unintended consequences such as landlords withdrawing from the market.

“I think that this issue is truly multi-faceted, and I’m not quite sure one thing, while it may be necessary, will solve it,” he added. “If we say a key part is rent control, we don’t want to stifle development. We want people to develop duplexes, triplexes, efficiencies added on to their homes, whatever it may be.

“We want to see them getting their desired rate of return so more persons do it and help to address this. There’s definitely a role for the Government to try and help, but I’m not sure one single thing can be done to solve such a significant problem. We need to look at various different things,” he added.

“Rent control may be one for a particular market or price range, but if it’s taken there has to be a conversation given that people have to pay real property tax, insurance etc so that people can make it.” Mr Wilson, acknowledging the need for more supply, said Bahamians will also have to become accustomed to building and living in condo and apartment-style developments especially given the finite availability of land on New Providence.

He also expressed scepticism that the 25,000 “vacant” residential units identified in the Bahamas National Statistical Institute’s (BNSI) recently-published housing census are all available and not in use.

While market forces of supply and demand have driven Bahamian real estate prices higher, financial factors are also an impediment to Bahamian home ownership dreams. The International Monetary Fund (IMF) earlier this year said property prices and rental rates outpaced growth in Bahamian wages seven-fold during the decade to 2022 to deepen the housing affordability crisis.

The Washington D.C. based Fund, in a paper accompanying its full Article IV report on this nation’s economy, said the “most vulnerable” persons in Bahamian society will have suffered most from real estate-related costs outstripping earnings and incomes. While property and rental prices were said to have increased by 14 percent between 2012 and 2022, in contrast per capita wages in this country rose by just 2 percent.

The challenges many Bahamians have in obtaining mortgage financing, with banks only willing to lend to the most qualified buyers, have also contributed to the housing shortage. Too many persons are living pay cheque to pay cheque, snd enjoy little to no savings, meaning they cannot qualify for financing let alone cover closing costs.