Canvassing for a better community

It was with utmost surprise that I heard a woman call out earlier this evening to a neighbor next door, “Good evening, it’s Mrs. Foggo”.  A Member of Parliament, the representative of my constituency canvassing when there was no vote to win?  Indeed you can imagine my surprise when Mrs. Foggo, neighboring constituency candidate Mr. Perinchief and Mr. Thomas, a representative of the local housing assistance center, turned up at my door canvassing for a better community.

This serves as the first opportunity I have had to meet Ms. Foggo in person.  While she had canvassed my home a couple of times prior to the election, I unfortunately was never home at the time to meet her in person.  As it goes, neither was I home for the occasions that Ms. Roberts-Holzhouser, canvassing for the opposition, stopped by.

Regular readers of my blog likely recall that I refused to support Ms. Foggo in the last election given the remarks she made at a PLP rally.  The reasons at the time were that I refused to have as my representative someone who used historically biased racial motivation as a means to get elected as opposed to focusing on a forward looking view of what she could do for our community.   While I remain entirely disappointed by and opposed to such remarks, they were reminiscent of the past election and shall not stop me from welcoming Ms. Foggo’s attempts to be a worthy representative of our community.

Ms. Foggo’s recent visit scores as admirable.  Not only was she canvassing at a time when there was no election to win but she also expressed concern about the issues facing St. David’s islanders.  With the assistance of her colleagues, she was ready to take note of and propose to follow up on my concerns and I duly hope she does so.  Beyond this she offered me her correct email address (as you might also recall, I had some difficulty getting a hold of her via her official PLP email prior to the election) and invited me to attend the bi-weekly meetings she hosts each week for constituents to come out and express their concerns.

During this brief encounter I took the opportunity to express some concerns I have voiced regarding the lack of adequate evening bussing to St. David’s as well as the lack of an adequate source for up to date schedules, especially via the government web site.  My suggestion that more express evening busses would be a suitable solution to the problem was mentioned and Ms. Foggo suggested that she has a meeting coming up soon where she shall pass along the recommendation and I certainly hope she shall.

Ultimately I remain pleasantly surprised that Ms. Foggo took the time to stop by.  I can certainly appreciate the time and dedication it takes to canvass the constituency on a regular basis outside of the election period.  This along with the unfortunate circumstance of being at the beck and call of every constituent that believes their candidate can and should solve their every problem.  As well as the time and involvement it takes to be a contributing member to the betterment of our community, the formation of legislation and the contributions to discussions of future policy on our island.  It is my hope that Ms. Foggo continues to live up to the precedent she has now set and focuses her attention on the things she can do to better St. David’s as well as our island.

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Encouraging discussion on proposed legislative changes

As has been lamented many times by various bloggers, Vexed Bermoothes especially, the lack of published agendas, amendments and hansard minutes of parliamentary sessions are of considerable disappointment.

A number of proposed amendments have been passed on to me which I’ve posted here.  It is my hope that despite the short notice (the amendments are due to be debated on Wednesday the 9th) that considerable discussion can be garnered that could provide valuable feedback to our legislators to help strengthen the proposed legislation. 

It would be desireable if the opportunity for public viewing and discussion of proposed legislation could occur prior to every parliamentary debate as a part of the official process.  Common members of the public should have the opportunity and be encouraged to become more involved in ensuring that legislation crafted for our island gains adequate feedback to ensure a strong and prosperous Bermuda that best fits the needs of its people.

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Contributory Pensions Amendment Act 2008

The following has been passed on to me as a copy of the proposed amendments to the Contributory Pensions Act.  This amendment will be discussed in a special session of Parliament on Wednesday July 9th 2008.  I have posted a copy of it here in hopes of encouraging feedback from the public prior to the debate in parliament in hopes that some of our legislators shall read such feedback and gain an idea of the benefits of introducing a more open and transparent process for the creation and modification of our legislation.

See the amendment act in full after the jump.   Please note it was OCR’d so there may be inadvertant mistakes in the character recognition.

Continue reading

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The high cost of the Music Fest

Premier Brown has attempted to justify the money losing expense of the Bermuda music festival as necessary for putting Bermuda on the map.

“This is branding. It’s already known around the world that Bermuda’s festival is sold out and the entertainers we were fortunate to get this year we cannot get for peanuts.”

My argument?  Bermuda would achieve far better branding if the likes of Beyonce and Alicia Keys chose Bermuda as their destination of choice for a vacation rather than us paying top dollar to get them to come here.  Even better, if *cough* big name celebrities *cough* chose to make Bermuda their second home…  Like *cough* Oprah *cough*.  But that’s a whole different article, isn’t it?

So how could you build our brand and encourage big name personalities to want to visit the island without buying them off?  We’ve covered it before and it involves three magic ingredients:  exclusivity, exclusivity, and exclusivity.

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What’s ahead for Bermudian real estate?

In today’s Bermuda Sun, Susan Thompson, agency manager for Coldwell Banker Bermuda Realty, was quoted as suggesting

“… in the case of the coveted single-family dwelling, [prices have] levelled (sic) off. They are not decreasing, but we’re not seeing the growth we’ve seen in the years past.

Ms. Thompson’s recent review of Bermudas market from Coldwell Banker’s newsletter is also quoted

In the review, [Ms. Thompson] addressed fears that Bermuda’s real estate bubble would follow the lead of the U.S. and burst. She wrote that it is important “to point out the obvious.”
“Bermuda is not the United States,” she said. “In addition to its sensible lending practices, other factors ensure the continuing demand that keeps prices stable.”

Ms. Thompson is absolutely correct in that Bermuda is not the United States.  However, one may wonder why housing demand has dropped from recent highs.  In order to answer such a rumination, let us consider the potential causes of a recent boom in Bermuda’s housing market.

Bermuda has seen a boom in housing likely due to a number of factors.  As this writer has suggested in the past, it likely began with a shortage of housing for ex-pats.  This when combined with a lack of new housing development and a dearth of changes to planning policy caused much of the beginning of the boom period.

So what happens when a housing market booms and prices get less affordable?  Well, banks begin to run out of customers to lend to.  What do banks do under such circumstances?  They begin to change their lending practices.  In the US, this led to an increase in sub-prime lending.  Yet sub-prime didn’t happen in Bermuda, right?  Perhaps not, instead we witnessed first 5% down, then zero-down and finally interest only loans as local banks attempted to keep their sales up despite rapidly escalating housing prices. 

So banks changed their lending practices, why does it matter?  It matters because it inflated demand at the same time that prices were inflated.  When prices rose due to the housing shortage, banks compensated with 5% down loans, giving access to home ownership to those who couldn’t afford larger down-payments.  When those people ran out, they gave 100% financing loans, giving access to those who couldn’t afford to save down-payments (along with capitalizing on higher rates for having no down-payment).  When those people ran out?  Well, they started giving out interest only loans to those who couldn’t actually afford the mortgages but wanted to believe they were doing something different by renting the home via the bank rather than a traditional owner.

Not really a big deal, right?  Well, actually these lending practices likely have had a similar effect on Bermuda’s market as the predatory lending practices of mortgage brokers in the United States.  Effects which caused a upwards price spiral in housing as a shortage of supply met the artificial inflation of demand.  These effects were likely only further compounded as increasing rental returns and rapidly rising home values caused speculators to jump on board and buy up homes for renting and flipping and for sellers to start thinking they could ask for far more.

This may help explain how in a short few years the price of the average home spiraled up to $1.6 million dollars.  Let us look back at the spiral shall we?

March 2003 ($1 million) – The average price of a piece of the rock? How about a cool $1m

Sept 2005 ($1.15 million) – Real estate prices still going up   

Jan 2007 ($1.6 million) – $1.6m average house price? It’s a distortion says Sir John

and now?

July 2008 (apparently $1 million) – ‘Nows a great time to buy a home’

So, now the question to ask yourself is how did we go from an average home price of $1.6 million down to $1 million in just over a year?  Let us examine potential factors, shall we? 

First off we have likely hit a ceiling in the inflation of home buyers in the market due to local mortgage lending practices.  Likely the banks have run out of people to lend to and thus the once inflated demand is suddenly deflating.

Then we have the 524 or so ‘affordable’ homes either built or in the process of being built under government initiatives.

This of course is followed by the Bermuda Immigration and Protection Amendment Act of 2007 which discriminated against Bermudians married to non-Bermudians, causing them to be unable to purchase second homes and also requiring them to acquire licenses to purchase homes, delaying and disabling their ability to get the homes they want without hassle.

Then we have the term limits policy, which when combined with the difficulties at immigration and various other factors have made doing business in Bermuda less attractive causing many firms to begin moving back office jobs off island.  Of course, with those jobs goes demand for the rental market as well as capable middle class Bermudians who want to keep their jobs and may well sell their homes as they leave.

Ok, so now the half million dollar question:  are these likely contributing factors to the decline in housing prices and softening of the housing market?  Before you answer such a question, consider this:  What happens if you combine a weakening global economy with off-shoring of local jobs and a rapidly softening local housing market?

A weakening global economy means global spending is getting tighter.  While Bermuda is typically quite shielded by such events is there a guarantee that Bermuda will feel no side effects?  Further, will the off-shoring of local jobs mean a decrease in overall employment levels, subsequently decreasing local spending?  Spending that keeps many supplementary industries afloat?  Finally, what happens if the housing market continues to soften and a large number of mortgage holders (especially those with interest only loans) wake up to realize that the value of their home has dropped and they now are in a state of negative equity if they try to sell?

What happens if any or all of these scenarios are true?  Would that mean rocky roads ahead for Bermudians?  What does it mean for the future of our housing market?

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What happened to the June 2008 employment brief from the Statistics department?

While we’re at it, when will the May version of the Consumer Price Index be released and is it possible for government to embrace RSS feeds for their e-government portal?

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