By Mark Pettingill, Shadow Minister for Public Works, March 13, 2012
The OBA supports any sound arrangement that helps Bermudians own their own homes.
However, the Government-backed plan supporting 100% financing for first-time homebuyers treads a very fine line with people who, under normal circumstances, would not be able to afford a condo at Grand Atlantic development.
We are very concerned the people looking for affordable housing today will be hard put over the long term to meet the monthly mortgage demand a Grand Atlantic condo will require. 100% financing arrangements have already put a lot of mortgage holders today into difficulty.
We therefore put great stock in the Minister’s statement that 100% financing will be offered only to ‘qualified’ first-time homebuyers.
We are not happy with the fact that the financing scheme is backed by the Bermuda Housing Corporation, meaning taxpayers are on the hook for any failed mortgages.
It is another example of a desperate government relying on everyday Bermudians to rescue it from its self-inflicted policy bungles – pension diversions to cover its cash shortfalls being the most recent example.
The 100% financing arrangement puts these properties into direct competition with Bermudian homeowners and landlords, who do not have the luxury of being subsidized by government. It may cost them sales or rentals but that is the price they will have to pay for a government scrambling to save a housing project that proceeded without any realistic understanding of the market.
The Grand Atlantic project clearly missed the mark by building units too expensive for the people wanting to become homeowners.
The OBA would have done things differently, guided by careful planning to help Bermudians realize the dream of owning their own home.
Building for the sake of building – as this government has done at the Grand Atlantic site – is not good enough. Building housing that people can afford should have been the basis of this project, but it wasn’t. It is another example of the Government proceeding without clear thinking – once again putting politics before policy.
‘Affordable housing’ has to be affordable. We would have made sure of that.