By NEIL HARTNELL
Tribune Business Editor
The Government has known for 15 years that land and construction costs would outpace salary/income levels, making home ownership increasingly unaffordable for a growing number of Bahamian households.
A newly-released Inter-American Development Bank (IDB) report on housing in the Bahamas and five other Caribbean countries reveals that 21.1 per cent of Bahamian households, more than one in five, cannot afford to purchase the lowest-priced house offered by the Department of Housing.
The report, entitled ‘The state of social housing in six Caribbean countries’, also highlights the “major concerns” over the access to, and availability of, land in the Bahamas given this nation’s antiquated title registration system.
It added that the current process employed by the Government for allocating Crown Land to private individuals, businesses and investors was neither efficient nor transparent.
Referring to a 2000 conducted for the Government, the IDB report said: “A housing needs study of the Bahamas concluded that a large proportion of low-income households were not able to purchase a home in 2000.
“The study also found that while their incomes would increase, this increase would be outpaced by increases in the cost of land, land development and construction.”
The IDB report, drawing on 2004 Department of Statistics data, said the poorest 4,475 Bahamian households, earning an average $2,500 per year, could only afford to purchase a single family unit costing $18,000, or a multi-family unit worth $16,500.
“The cost of units delivered to the market under the Department of Housing guaranteed loan programme ranged between $70,000 and $94,000 in 2005, which could only be afforded by households at income segment D and above,” the IDB study said.
“Thus, 21.1 per cent of households would not be able to purchase a new house at a price of $70,000.”
Based on the data employed, the total number of households in the A, B and C income segments, with average earnings of $12,500 or less, and unable to afford Department of Housing properties, was more than 20,000.
Apart from affordability and income, the IDB also identified the Bahamas’ current system for registering and recording titles as a major impediment to housing market development.
“Access to and availability of land are major concerns,” the study added. “On the Family Islands, individuals are holding land which has not been surveyed and for which they do not have registered titles.
“This has created a shortage of land for subdivisions and housing. To overcome this problem, a policy man- management function has been set up in the Office of the Prime Minister to develop a subdivision on Eleuthera, providing grants to individuals for surveying and conveyance. This pilot scheme will be replicated on other islands.”
Turning to Crown Land, and the Registry of Records, the IDB study added: “Current systems and procedures for allocating, administering and surveying Crown Lands do not allocate land to individuals to meet development and housing needs effectively and transparently.
“The complexity of the records in the Registry of Documents makes examination of titles time consuming and expensive, and inadequacies in the administration of land use records reduce land tenure security, resulting in increased cost of land market transactions and, sometimes, fraudulent transactions.
“Information on land is outdated, incomplete and scattered throughout various agencies, thus limiting its usefulness and causing duplication of effort and cost as well as inconsistencies. The country lacks a sound cadas-tre of Crown and private land holdings, and the current deed recording system does not require the registration of land transactions.”
None of this will surprise professionals in the real estate and legal professions, as the weaknesses highlighted by the IDB study have been known for years. Yet neither the Government nor the private sector have made any concerted reform effort.
A three-pronged legislative package to create a Land Registry, involving the Land Adjudication Bill, the Registered Land Bill and the Law of Property Bill, were developed under the former 2007-2012 Ingraham administration.
However, they were sent back to the Law Reform Committee and other government agencies for further review, and to account for feedback and consultation provided.
Nothing has been heard of them since, but the Christie government committed in its 2012 election manifesto to moving towards a Land Registry system in the Bahamas, describing this as “a must”.
Creating a Bahamas Land Registry, which is what the Registered Land Bill seeks to do, would move the Bahamian real estate and conveyancing market away from one based on “first to record” the title deeds.
A Land Registry would contain all information relating to a specific parcel of land in one database, including its location, dimensions, ownership interests and all encumbrances, such as mortgages and other liens/charges.
This, in turn, would boost efficiency and reduce issues associated with title problems.
The current system is creating economic problems, due to valuable land being tied up by title disputes, and a negative psychological impact on people who discover the land they own may have bad title.