Letter: Restrictions on non-Bermudian property owners will thwart hotel development

A significant number of wealthy non-Bermudian homeowners have purchased condominiums and villas that were built (or are being built) by hotel properties in critical need of cash flow. (It is important to note, here, that every hotel that has proposed development in Bermuda for the past 20 years has absolutely required such a source of funds to make its plans viable. We will see no hotel development without associated high-end real estate sales.)

Now Government has said to the prospective buyers of such homes — wealthy people with an infinity of choices about where to spend their time and money — that, even if they elect NOT to put their homes into a hotel rental pool (that is, choose not to allow strangers to use their homes when they are not here — the prevalent choice among those who can afford these high end homes), the owners, themselves, will not be permitted to use their homes for three-quarters of the year. 

They CANNOT come here and spend their money. They cannot come here and host scores of friends to spend their money and support our economy.  Their houses must sit empty for three-quarters of the year. And we may only expect to see these owners in our shops and bars and restaurants and attractions and taxis for 90 days out of each year... no matter how often they might want to be here (... if they choose to buy at all under such a constraint. Most will not.)

This limitation, in turn, makes the value of these properties lower, as they will be less desirable to people who don’t want to be told that they may not use their own homes for such a large portion of every year, despite having paid millions of dollars for them including substantial payments to the Bermuda Government. So hotel developers that might have been able to build here partly on the strength of the cash to be generated by proposed real estate sales will see less potential benefit from doing so.

Personally, I am at a loss to understand how we, as a country, benefit from this policy in any way at all. 

The only possibility I can even guess at is that someone expects that the value of resort homes will, as a result, be low enough for a wider spectrum of Bermudians to be able to purchase them... but in that case, the value to the developers will be too low to make them useful in funding new development, so they — and the hotels — are unlikely to be built at all.

I remain mystified and would welcome an explanation of the rationale for such a restriction.

Cris Valdes-Dapena