Steve M

Member since April 17, 2020

Work in finance and uniquely positioned within the Bermuda economy

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Steve M10 months ago Thank you for the providing the first step in modernizing the housing landscape in Bermuda and starting this long-needed work. I am submitting these points of feedback to support the discussion and to also based on my experience, which is also as a researcher and facilitator of the recent Chamber of Commerce Housing Presentation.I also note that this is a rather wholesale change with the acts and this process should not be rushed, as it has been on the radar for discussion for years, and having less than 1 month of public consultation, and one round at that from the schedule in the brief, feels that this is potentially will miss over some key aspects. These points do not represent all my final comments, but represent the more material points.I would strongly recommend to not rush this process and ensure there is adequate time for all considerations to be thought through, so this legislation achieves the correct outcomes. Steven M · Can you provide more details around the types of landlord tenant complaints received? In the brief, it said that on average, consumer affairs receive on average 2,230 complaints a year, which would represent 15% of all rental units (per 2016 census) each year filing a complaint, be it landlord or tenant, which feels high. Of the 2,230, how many are considered a serious complaint requiring some form of intervention? Based on the Judiciary Annual Report, there were an average of 39 evictions by the court per year over the past 5 years, which indicates a fairly low complaint to eviction rate. · To avoid confusion that exists today, the term Annual Rental Value should be amended, as this ARV currently does not reflect market values, and has not reflected market values for some time, especially given the time frame for amendments to the ARV can delayed, as they currently are. The ARV should be renamed to something like Property Assessment Rate or Property Tax Valuation to avoid confusion that arises from this, which allows the land tax base to be amended more readily without it being viewed as a rental amount. Should the concept of Rent Control be amended?· Part 1 - Was there any thought to amend the Rent Control level? Currently at $22,800, there are pro’s and con’s with this, however, given the commentary in the consultation brief, I was looking for an amendment to this level, potentially downward or focused on a narrow scope of properties, not c50% of all properties as it is today..· Part 2 – Given the Chamber of Commerce presentation that showed that there was a concentration of Rent Control properties to certain locations and also by the type of property (as per the Land Valuation categorization), is there any thought that Apartments & Condos are treated separately than Houses and Cottages, or some other form of ensuring rent control is targeted correctly? · Clause 14(1) highlights that “No landlord shall impose on a tenant a daily late rental fee that exceeds 5% of the monthly rentals payable in the case where the annual rental value of the house or apartment does not exceed $60,000.”o the language used makes this a point of confusion. If the monthly rent is $6,000 but the ARV is $4,500, is this out of scope?o Additionally, if the rent is $5,000 a month, is this stating that the late fee, each day is $250 ($5,000 x 5%) and after 30 days, the late fee’s total $7,500 ($250 x 30), in addition to the $5,000 in rent, so total amount owing is $12,500 for the 1 month of rent that is late?o Would the late fee be assess on the full amount of rent due or on the portion of rent not paid? · Clause 15(2) that permits the security deposit to be up to 3 months rent. Given the modernization of this act is to support affordability, this clause seems to be quiet heavy and potentially non affordable for most people. Can you explain the thought process of having up to 3 months of rent as a deposit? Most other countries seem to have a standard of 1 month. · Clause 21 does not permit a Landlord from entering the premises in the event of an emergency. In the section on interfering with reasonable enjoyment, there is a reference to “except in cases of emergency”, but there is no language in Clause 21 that permits entry for emergency causes (ie, gas leak, electrical faults, water leaks). · Clause 53 does not provide details under what conditions rental amounts for Rent Control can be permitted to be changed. It would make sense, as well as being less bureaucratic, to have a standard allowance for rent increases for units that under rent control, that the Rent Advisory board can outline, such as a standard permitted increase that is viewed amongst insurance, maintenance and other property related costs, and not necessarily just the CPI rate (as the price of beef or foreign travel should not directly impact the cost of a rental unit). Should a landlord wish to apply for a higher rate of increase, then it requires the advisory panel review. · Clauses 56-59 outline that issues with matters pertaining to the Rent Control Act are managed through the Rent Commissioner and the Courts. Is there a reason why the proposed Tribunal would not oversee initial disagreements with matters relating to Rent Control disputes (ie, landlord and tenant or landlord and rent commissioner)? · Is the notion of month to month leases, in the absence of a written agreement (ie, a verbal agreement only), not an option per the act going forth? Does this align with contract law? Should there remain a provision that defaults to this in the event of a lapsed rental agreement? · If all rental agreements are to be in writing, should there be a provision that rent agreements must be filed with the Rent Commissioner with 30 days? This can be a requirement, for any matters brought to the Tribunal, so there is a clear agreement that is in place, duly stamped and also provides a data source for viable information on rental amounts and variations being charged. · Further to above point, would there be scope to consider a secured deposit agreement where the Office of the Rent Commissioner is the custodian of the security deposit? This would provide a safe escrow arrangement with the ability for the deposit to be released to the landlord or tenant in the event of a dispute through the Tribunal? Funds could be kept in an interest bearing account that potentially helps partially offset some cost of the Tribunal and staff. · The draft legislation did not include a sample lease agreement, that given the view is to have a standard lease available, would be an important part of this consultation. When will this be available? · There is no clause within the Tribunal section that states the Landlord or Tenant are not permitted to retaliate against one another should one party refer their rental agreement to the Tribunal. This should be included in the Act. · Include a pet friendly clause that requires the landlord to offer reasonable consideration for pets. In return for this consideration, there would be an option for one or more of the following: an increased security deposit, an increase monthly rent to account for a “pet rent” and, if available (not currently) the requirement for pet property insurance, for any damages or excessive cleaning required. · Whilst the Rent Increases (Domestic Premises) Control Act 1978 is included in this new legislation, the Rent Increases (Domestic Premises) Control Rules 1972 (which applied to clause 35 in the current act and 58 in the proposed) and Rent Increases (Scientific Research Institutions) Order 1975 are not mentioned. Should these also be included (with prior laws rescinded) as part of this exercise? · Relating to enforcement power by the Tribunal, how would any financial compensation be redressed for the tenant or landlord? The Tribunal can order certain actions to be taken, but if the tenant incurs arrears and is deemed to be in fault, how can this arrears be addressed? Should the Tribunal have powers to enforce or refer to court for examination of means or garnishment or other punitive actions for repayment? · How do you view the Tribunal working? A practical walkthrough would be advantageous. How often would they meet, would there be full time roles to consider for this? Who will dictate the cadence and agenda for each meeting? If there are 2,230 valid complaints each year, how would the Tribunal clear 185cases a month? Would the tribunal have the power to refer matters to supreme court? Would any court powers be passed onto the Tribunal, such as being able to instruct the Chief Bailiff? · For the employment tribunal, the chairperson is to be a practicing lawyer with at least 8 years of service and Bermudian, whereas the requirement here is just for a practicing lawyer with 7 years experience – should these 2 tribunals be aligned from a concept of structure and chair experience? · What are the support programs that are being thought of to help ensure there is a social safety net for those tenants that truly fall on hard times and fall behind on rent? At times, the landlord is expected to be part social service whilst having to carry on normal cost incurring measures. Will Bermuda Housing Corporation look to have sufficient emergency housing on hand? Is there a form of short term rental assistance program through Financial Assistance or BHC that can step in for a 3 month period to support whilst a long term plan is identified?

Steve M10 months ago This submission is further to my prior one.I note that a few of the points in the proposed draft legislation appear originated from the Ontario Residential Tenancies Act 2006 (https://www.ontario.ca/laws/statute/06r17) and would just urge caution on the lessons learned that are faced by the current Ontario rent tribunals, which face significant delays and have actually hampered the ability to rent efficiently. There is also much debate on how this act should look and feel today with various articles available on debates that are ongoing now.However, using this Act as a catalyst for change is fine. One item that the Ontario Act does is offer tiering from based on types of units and when it relates to Rent Control in Bermuda, these items should be taken into account to modernize how Rent Control is structured and managed. One part that stood from recent presentations on housing is that new units being constructed are less likely to be under rent control, which shows the lack of interest from developers/landlords to focus on these units. This can be a combination of construction costs, investment returns, planning regulations and space limitations. However, in order to support affordable housing, there has to be some incentive for rent control units to be built and rented out.Could there be some form of land tax break for the main units if they construct a new rent control unit? May not make a huge change in the investment decision, but some concessions are likely required to support the construction of "bolt on" apartments.The way we treat rent control units can also be differentiated, with different concessions based on the actual location of the units - such as a unit in Tucker's Town can be treated differently than that of one in Middletown. This was a point raised in the Chamber presentation that should be reviewed as part of the merging of the Rent Control Act. This can be structured in a way that the Rent Commissioner can have the power to reclassify properties and areas that require additional concessions. Concessions in areas that need more support can be items such as reduced land tax for the whole property (ie, the main unit and the 2 small apartments), access to a preferential renovation fund (similar to the BHC program) and some form of tenant insurance to ensure the landlords are protected from damages to an extent. A stat that stood out: "About 12.5% of Houses and 29% of Condos fall under rent control. This is comparable against 76% of Apartments and 75% of Cottages"Rent Control should move beyond just simply classing every property based on ARV (which should also have the name changed as in my first post), with a somewhat straight forward matrix of locations (like how the EEZs have been viewed) and types of properties (apartments/condos at 1 tier and houses/cottages at a 2nd tier) that are in focus.Rent Control Units should have a set amount that is a permitted increase each year, and should the landlord wish to exceed that increase, they can apply to the Rent Commissioner with their application to do so. This will help keep up with the various expenses of property - interest rates, maintenance costs, insurance, utilities and general upkeep.Look forward to the next iterations.https://bbc.bm/housing-not-being-built-in-low-income-high-rent-control-areashttps://www.royalgazette.com/general/news/article/20250715/residential-development-orders-among-housing-proposals/https://rgb-prod-public-pdfs.s3.us-east-2.amazonaws.com/VQpHWSmPB3bVU6ev0FaVFxdYQMw.pdf

Steve M3 years ago I have provided a detailed paper on a number of challenges that we face from a cost of living perspective, which whilst can not be solved from the budget, the impacts can be softened. I have also provided excerpts of my own private research which provides additional context to some of the true cost of living that has been experienced over time.There are a number of challenges with the current CPI that result in this showing an impact that may not accurately reflect the cost of living. This includes: The inclusion of overseas hotel, airfare and rental car costs, that whilst might be part of a basket of goods that we spend money on, this does not impact the cost of living in Bermuda in a direct manner. As I have outlined in the attached paper, a number of Food staples that are shown in the Digest of Statistics on an annual basis have seen their costs increase at a higher rate than the respective Food CPI. Additionally, within the Retail Sales Index, a separate inflation rate is used, and this has been trending higher than the Food CPI for some time. Rents comprises 26.7% of the CPI weighting, does not appear to be reflective of market rents being experienced. This is demonstrated by the Non-Rent Control rental index showing that these rents for the top half of the market are down 3.6% from March 2020 through to July 2023, which does not align with general public sentiment or public statements related to affordable housing, or lack thereof. Within the paper, I have outlined 3 items that should be considered to support a softening of cost of living, which is also taking in account potential impacts from global events, as there remains a risk of sustained inflation due to shipping limitations. Review Customs duties on BELCO Imported Heavy Oil and Diesel. The current duty rates were set in 2016 at $0.20 per litre ($31.80 per barrel), which was increased from the 2015 rate of $0.145 per litre ($23.05 per barrel). Pre 2015, the rate had been fixed at $0.095 per litre ($15.10 per barrel) for over 20+years. The increased rates in 2015 and 2016 were attributed to the oil prices globally being a low levels, which allowed for an increased duty revenue without a significant hardship, given oil prices had been high for last several years. In today’s climate, this increased duty is adding around $0.05 per KwH of the FAR rate, which since the updated FAR methodology in Jan 2020, has accounted for 30% of total FAR payments. This can amount to around $400 for a normal household per year. Review All Food Duties further. Whilst a number of items are at 0-5% duty rate, all items, including the sugar tax, should be reviewed further given the spike of food costs and to assist in managing overall costs. The volume of food items has not increased materially, yet the value of these imports has increased significantly and leads the customs duties to be benefiting from the inflationary impacts, and compounding that issue further onto the customer budget. Review customs duties for verified Retail operations. The Retail Sales Index shows how store fronts (specifically apparel) have struggled for years, and there was a downward trend already evident pre-covid. Some of the sluggish recovery since which can be attributed to A S Coopers closure, however, the long term trend shows the sector needs support. Providing targeted duty relief to this sector will allow them to import goods cheaper and compete against individual importers (via Amazon, etc) and ensure employment levels remain in this sector. Value of the imported goods has risen significantly post Covid. Funding for these initiatives can be via the approx. $30m of new payroll tax from the expiry of the new hire relief and by making use of the $50m excess cash on the sinking fund (above the $100m base amount to be retained).

Steve M6 years ago Plan would need to be a combination of how to shift taxes (such as aligned to luxury taxes), along with expenditure elements and provide some baselines for economic stimulus. Government Expense Management- Review of salaries required, and potentially long term amendments. Union support is needed, and either have a combination of the reduction of staff or salaries.- Engage with corporate Bermuda on how to mitigate the impacts of reduction in income, as Government are largest employer. Deferred payments, discounts, sidecar arrangements on outstanding amounts would have to be considered, and what would be given in return (as it has to be a commercial arrangement still).Unemployment Fund (after 3 month)- The current fund to remain in place at this time for up to $5/600 week (60%) if unemployed – however, controls in place to confirm that they remain unemployed- Discounts for Grocery, Utilities. Existing Bank loans on a reduced rate/repayment whilst on fund.- Portion of the benefit to be allocated directly to landlord/utilities if long term planTaxes to make up Government Revenue- Larger car purchases, cell phone purchase (above $200 or so)- Increase Petrol tax, Incremental Belco tax (ie, if you use over 800/1000 KWH a month- Domestic Travel tax for residents leaving the island for vacation- Corporation of Hamilton and St Georges to be brought into Government fully – share resources and staffing- International Business with minimum presence on island/minimum economic substance (such as less than 5 staff) should be taxed at a higher amount. Will cause a number to leave Bermuda, however, they would have limited wide spread economic value. It should be either you are hiring in Bermuda or you have to pay a sizeable annual fee to benefit from our jurisdictional framework. This would also assist with some elements of corporate real estate.Domestic Tax Credit Scheme- For next 12/24 months, for money spent in the local economy, specifically at restaurants, hotels, retail, obtain credit to offset their tax obligation, such as land tax or the employee portion of payroll tax- Just as an example, Such as for every $100 spent receive 0.1% up to max of 10/15% off – encourage spending rather than saving- Either track through spending on debit/credit card activity or through receipt systemEquity Investment Fund for Domestic Bermuda Business- Say for $50-$100m to support local and hospitality businesses- Government support for guarantee for minimum return of 4/5% ($4-5m a year) of issued funds for first 3-5yrs. No principal guarantee, or something up to 50% for limited time.- Equity agreement for the share of business, up to 49%- Run as an independent organization, potentially with a small team in support with BEDC officers- Close management leveraging existing resources:o Leverage Banks for AML/KYC/CDD requirements – ie, Banks provide confirmation of compliance.o Work closely with BEDC to leverage the business support network and access to resources- Profits based on equity portion feed up to the Fund. Some businesses would fail, however, with a large enough base, it should provide a stable platform.- Businesses involved in the fund obtain payroll tax benefits, with taxes paid on the profits up to the Fund- Commitment for at least 3-5yr buy in, can be tiered penalties for early closure- Equity value will fluctuate, but would not be active to start- Engage the Banks to have their experts involved, to leverage lending experience on this fund- After 3-5yrs, be based primarily on dividend yieldTourism jump start- Waive payroll tax for 2yrs on all hotels- Allow domestic travelers- Government to continue commit of letters of credit to support the airlines to secure airlift- BTA launch a pre-pay scheme for 2021 to encourage early bookings, with clear deferral or cancellation terms, that would not result in 100% refund, but credits for future trips. Packages to built with this to support taxi, retail, charter boats, restaurants and hotel – an all-inclusive option available for early bookings.- BTA advertising campaign to offer teaser campaign – “we look forward to showing you a Bermudaful time you next year” campaign- Reduce red tape for new excursions and activities.Restaurants/Retail Assistance- Plan for social distancing table service for rest of 2020 – limit number of people in restaurant and controls around serving- Tax introduced on delivery service of 5%- Allow for liquor sales of wine and beer as part of the delivery, along with specialty cocktails- Work with BTA for leveraging ideas, such as hosting dinner party service, with appropriate health controls in place, to substitute dining experience- Use the Parking Lots in evenings for social distancing dining experience- Customs duty for Retailers to be relieved for select months, in the immediate easing of bring in products- Work with shippers and BEDC to maximize economies of scale – bulk orders/shipping for

Steve M3 years ago This is a worthy initiative and one that requires a long term view and support from multiple stakeholders. I also applaud the efforts to step into the realm of finding a path to a solution. My comments below are for assisting in the constructive development of a long term sustainable plan.Plan StructureI did have the opportunity to attend the first session, and I think the core challenge that is presented, is the vast amount of layers and issues that can result in homelessness, and usually there are multiple of these layers. My initial concern is that the plan can be too broad and too ambitious in the early stages and spread too thin around many different initiatives, which can make it difficult to demonstrate progress/success and have the appearance of not making an impact, which will then have a challenge for maintaining the support and momentum from those that are impacted by homelessness along with the key stakeholders/funders/providers of the programs.The mission outlined of “ending Homelessness” may be too broad as an initial stance given all the caused and issues outlined, and in reality, there will be very little that can be done to prevent some of the items from occurring, it is more about helping to manage that issues. Given that the number of touch points on the plan is so broad, it may be appropriate to tweak the long term purpose, as if there is even one person that is homeless, it implies that the plan has not worked, which would not be a desired outcomes from this.InitiativesHOME should initially focus in on a limited number of key programs that can provide the most support to most vulnerable populations, as it will be challenging to providing meaningful support across the 23 different types of homelessness or shelter security outlined. One of the issues that has become clear over the past period is that cost to construct new or renovate units is only commercially viable on higher end market units and there has also been a very limited number of new construction units over the years. The only plans on building, is around the Recommendation of “People experiencing homelessness or low-income families face barriers to renting”, and Insufficient housing stock is available for rough sleepers transitioning from outside andemergency accommodation”. Given the current economics at play in the property market, with limited new builds/units coming to market and high demand at the higher end (part from the growth of International Business from 2019), there is likely to be continued cost pressure of the housing market. There should be a Recommendation of how units for the most at risk can be supported further, supplementing the current Salvation Army shelter and offering options for daytime/poor weather accommodation, which is not likely to be done on normal commercial terms, which likely means either subsidies or other benefits are required to support private enterprise on any plans.Whilst the current government budget is allocating funds of close to $25million to affordable housing, there is no breakdown available as yet of how this will be deployed. As most appears to be directed to Bermuda Housing Corporation, they are generally on rental agreements, but there should be an allocation of the $25m that is set aside to support homelessness, such as expanding the current Salvation Army shelter or supplementing with another unit. I agree with the other contributor Stefan around using some of the old schools as potential shelter support, given there is the current plans to consolidate the public schools, this should leave some excess space. There would be a number of investments and measures required to make this work successful and have public buy-in, but that could be a near term opportunity to support those most at risk.Some of the other recommendations on the property market could be addressed by the real estate market, but there is no central MLS system for even listing property rentals, let alone a tracking tool. However, this is something that teaming up with real estate agents should assist with.The current landlord/tenant act is viewed as one challenge for the property market, as it effectively creates a social safety net by being more favourable towards a tenant for key parts. Whilst this can support a tenant on hard times, it will likely result in the owner being less willing to support future tenants that are viewed as having challenges. So, whilst it offers support in the near term, it may be punitive in the long term. The key part that is needed to support landlords and tenants alike is to have a clear social safety net that prevents tenants from being on the street, whilst keeping the owner able to generate a sufficient return on their property. This would be having established policies and laws that make it clear on timing, supported by a shelter or resource available to support those most in need, which is likely some expansion of the current Financial Assistance framework.The recommendations would also benefit from having inclusion of who/which party is responsible for delivery, as some of them appear to be more policy matters whereas other are more around social awareness, and a ranking system of priorities/timelines to achieve success.Best of luck with the delivery of the initiatives and look forward to seeing the success of the programs.

Steve M

All input submitted by this participant

Landlord Tenant Act Feedback and Consultation

Landlord Tenant Act Feedback and Consultation Part 2

Cost of Living support from the Budget

Detailed Economic Jump Start and Sustainability Plan

Feedback on Draft Plan