EDITORIAL
Rezoning to Suit Renters
Tuesday, May 11, 2004
Three weeks ago, in a Cayman Net News editorial, we spoke of the difficulty
for some residents of this country, because of their circumstances, of finding
affordable housing in the Cayman Islands.
Since the time of that editorial, several people have commented to us that
the housing situation here is an issue that does indeed need to be addressed
because of the social economic imbalance it is creating.
With those not owning homes having to spend inordinate amounts of their
earnings on housing to the benefit of the landlords, the social-economic chasm
between the haves and have-nots in the Cayman Islands is becoming increasingly
wider.
The landlords should not be accused, however, of doing anything wrong, for
they are just taking advantage of the opportunities availed to them by the
general system here, and by the particular circumstances of the housing
situation. We are, after all, a capitalistic society, and landlords do have to
take risks when investing in properties, and they have a right to earn a
profit.
In attempting to change the situation of high housing costs here, then, it
is the system and circumstances that first must be addressed.
While there are many factors that affect the housing situation here,
including the economic principles of supply and demand, the difficulty for
most non-Caymanian residents to secure attractive bank financing, and the high
number of young workers in the hospitality/tourism/watersports industries that
must be imported here.
Complicating matters is the fact that banks, in order to facilitate loans,
have financed housing projects with relatively low down payments, which as a
result has left landowners with high mortgage payments, and renters often must
foot the bill.
But probably the most significant factor affecting the cost of housing here
is the high building costs. Land is expensive, building costs per square foot
are high, fixtures and furnishings cost more here than elsewhere because of
import duties, and maintenance fees continue to rise.
While the Government cannot, and should not, interfere with real estate
values, by simply changing planning density limits and zonings, it can do
something to lower the square foot construction costs of housing, and thus
bring residential rental rates down.
Through the 1980’s, when there were fewer than 20,000 people living in
Grand Cayman, it was fine to have most of the residential land on the island
zoned low-density. However, changing times and fortunes should bring a change
in zonings. With nearly 45,000 residents here now, higher density properties
are now needed.
With higher densities, more units could be built per acre, lowering the
land cost per unit accordingly.
Another solution of rising land costs that has been allowed on Seven Mile
Beach is allowing building to go higher. Developments like The Residences at
the Ritz-Carlton, Grand Cayman have been allowed to build to seven stories and
other developments are now going to five stories to allow builders to lower
the land cost per unit, and to keep condominiums prices lower for investors.
If such a policy makes sense for the mostly foreign purchased properties on
Seven Mile Beach, why should the other residents of Grand Cayman also not
enjoy this easing of planning restrictions?
We are not advocating Miami Beach-style high-rise complexes, but certainly
allowing apartment complexes in certain residential areas to build to four or
five stories would not destroy the Cayman landscape.
Long-term economic growth for the Cayman Islands depends on a continual
increase in population, so housing will continue to be an issue into the
future. It is time to realise that certain planning changes must be made to
reflect the changes resulting from our growth.
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