EDITORIAL
Lack of Affordable Rentals Persists
Tuesday, April 20, 2004
One difficult aspect of life in the Cayman Islands for a large segment of
the local and expatriate population – single, non-professional, working class
people – is that of finding affordable rental housing.
The problem is not only limited to expatriates. Many non-married labour
class and young Caymanians also face the same difficulties.
As our colleges and universities attract more and more overseas students,
and as construction projects like The Ritz-Carlton, Grand Cayman bring a great
number of temporary workers, the difficulties in finding housing will continue
to become more acute.
With a severe shortage of one-bedroom apartments on the Island, many single
people are forced to find roommates to share two bedroom or larger abodes,
something that is now much more prevalent here than years ago.
Even with sharing, many people find their rent cost high in Cayman,
expending more than the recommended 25-percent of their monthly earnings
budget.
It is quite common to hear single people living here complain that they
find it impossible to save any money because so much of their earnings go to
rent.
Although living in the Cayman Islands is a choice that they make, and there
are certainly other factors that make residing here attractive, as a moral
society, we should not be proud of the fact that so many people are basically
living from paycheque to paycheque without any change of improving their
financial positions.
Sharing housing is a fact of life for young people all over the world, but
for mature single people, who tend to be more set in their ways, it can be a
nuisance that affects the quality of their lives.
Unfortunately, because of a number of circumstances in Cayman, roommates
are an unavoidable necessity.
Expatriates in particular have few options. The cost of purchasing a house
or condominium is beyond the means of most people on work permits, especially
since borrowing guidelines at the banks for non-Caymanians are much less
attractive than for Caymanians. Regardless, with their less certain tenure and
seven-year term limits, it simply does not make sense for many foreign workers
to buy here.
There is more affordable housing available in the outer districts, but
given the traffic problems on the roads into the capital of George Town, the
travel times, and the rising price of owning and operating a car here, the
trade off is not worth it for some people.
The lack of one-bedroom apartments comes down to a matter of financial
return. Despite the great demand, developers say that because of Cayman’s high
land costs, one-bedroom apartments do not maximise their potential profits.
The cost per square foot for a one-bedroom apartment is higher than for a
larger apartment because of the expense of equipping the units and the
economies of scale. Also, the Central Planning Authority’s zoning requirements
currently encourage a higher percentage of multi-bedroom apartments to make
building the most cost effective.
Given the long-standing shortage of one-bedroom apartments, adjusting the
zoning densities is one proactive step the Government could take to help ease
the problem.
Another step could be offering cost concessions such as additional stamp
duty savings, import duty savings, or something of that nature to entice
developers to build more one-bedroom complexes.
Such concessions do not necessarily need to be permanent, and could be
adopted just until the shortage is addressed.
Of course, some savvy developer might come along and realise that it’s a
good investment to build a one-bedroom rental complex that will fill up with
renters immediately and stay virtually 100 percent occupied all the time. Even
without maximum returns, satisfying a niche market has always been a
profitable business formula.
Whatever the solution, the shortage of affordable housing for a significant
portion of residents of the Cayman Islands should be addressed so that
everyone among us has an opportunity to improve their economic and social
standing for the future.
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