Land prices in the Bahamas would have increased by at least 30 per cent if the Government had proceeded with the Planning and Subdivisions Bill as is, a developer telling Tribune Business yesterday that the increased bureaucracy and red tape could have made debt servicing costs for the sector far more onerous.
Tony Joudi, president of Fast Track Construction, who is currently seeking planning permission for a six-acre movie, retail and gas station complex near Coral Harbour, and developing the nearby Via Della Rosa subdivision, said developers who had already received planning permission were effectively "sitting on a gold mine" as a result of the potential legislative changes.
Adding that he anticipated a rush from Bahamian real estate purchasers to buy into existing developments in the New Year, ahead of the impending legislation and price increases, Mr Joudi said: "With this Planning and Subdivisions Bill, it's not going to be easy for developers to develop, because it's going to take time.
"Those who are sitting on approvals are sitting on a gold mine. Any developer putting in applications in the future is going to have to go through a lot of red tape, bureaucracy and Town Meetings.
"It's going to have an effect on the price of land, and increase it by 30 per cent. And to top it off, land is not available in abundance. Now, land is scarce, and people are going to be jumping, taking advantage of what exists in the marketplace. They are not going to wait for new developments. Land is going to be scarce and more expensive, up at least 30 per cent."
Mr Joudi said developers typically borrowed money from banks and other financial institutions to acquire and develop land, and lengthy delays in waiting for Town Planning approvals - as could happen under the timeframes specified by the Bill - might leave them unable to generate a return from the sale of lots. If the wait translated into one or two years, developers might find it "very costly to service the debt".
"We're going to see major interest on real estate properties in New Providence, starting in the New Year," Mr Joudi added. "One thing I can tell you about land in the Bahamas is that it's a great asset in a recession. That and gold."
He said his 25-acre Via Della Rosa subdivision was "coming along very well, and sales have recently picked up in the last couple of months. It's going well, all things considered".
The development, targeting the mid-market Bahamian professional, with multi-family lots priced at $120,000 and single family lots at $125,000, had sold about 40 per cent of the 160 Phase I lots. The second and final phase includes 200 lots.
Mr Joudi said he would start "full steam" on the remaining infrastructure for Via Della Rosa in January, and had already obtained approvals from the Bahamas Electricity Corporation (BEC), Bahamas Telecommunications Company (BTC) and Cable Bahamas.
The roads had already been put in, and the subdivision of the lots into land was proceeding at pace, he added.
Meanwhile, Dr Earl Deveaux, minister of the environment, told Tribune Business that the Government had decided to withdraw the Planning and Subdivisions Bill, and replace it with a substitute, early in the New Year to enable the recommendations and suggestions it had received after the Bill was supposed to have passed the House Committee stage to be taken into account.
Dr Deveaux said that both he and the Prime Minister were "interested in it achieving a greater good for the country", and wanted "to pass a Bill that is transparent, takes into account all the interests and, where their suggestions are capable of being accommodated, to do so".
Describing several of the recommendations received from the likes of the Bahamas Real Estate Association (BREA) and others, such as law firms, as "very useful", Dr Deveaux said the Government decided to withdraw the Bill so it could have a more complete piece of legislation.
William Wong, BREA's president, told Tribune Business that realtors were not against the Bill and that it had "meaningful benefits", but he was happy to see the Government had listened to advice and withdrawn it temporarily.
"It would certainly have discouraged a lot of developers from coming to this market," he added. "They want to go through the least bureaucracy and hurdles, and if they do not, they will take their money elsewhere.
"The Bahamas has to realise it's not the only country that has sun, sand and sea. We need to hold on to developers and be user friendly, not turn people away, especially in these times.
"I'm not saying break the rules or let people in to rape our environment. We're saying let's work together with the developers for the good of the country. Make it easier, more user friendly."