Cabinet gains power to waive permit fees on development

Cabinet will be able to waive building permit fees on development applications under amended planning legislation.

Housing Minister Jay Ebanks walked back on a wider plan to put the power to change planning regulations entirely under Cabinet’s purview.

Ebanks, speaking during the debate on the legislation, said he had been persuaded to drop that proposal after public feedback and advice from former politicians. Regulations, which include coastal setbacks and maximum building heights, will still have to be changed by Parliament.

Ebanks said the government’s intention is to help make the planning process more efficient and stimulate affordable housing development. The changes that were ultimately approved by Parliament give Cabinet the power to amend building code regulations and waive fees.

The Opposition supported the legislation but highlighted concerns around the lack of guardrails and suggested clear regulations would be needed over who qualifies for fee waivers.

“On first glance, it just looks like a free for all,” Opposition leader Joey Hew said during the debate.

Ebanks insisted the changes, which give Cabinet wider powers to forego fees, were aimed at ordinary people. “This is not for the next person that’s looking to build a bank,” he insisted.

Ebanks said the policy was designed for young Caymanians who own land but must find “that first $3,000, $4,000, $5,000 out of his pocket” before they can start building. He noted waivers would not be automatic and that “the discretion must be exercised carefully, and in accordance with the law and the circumstances of the case.”

He acknowledged there was no eligibility criteria presented to Parliament with the amendments to the Development and Planning Law but said that would be crafted later. He added, “I’ll leave that part for the Minister of Finance.”

Fee waivers could be substantial

Opposition Leader Hew questioned the logic of the approach, saying more needed to be done to specify who would qualify.

“When we don’t even have a definition of an affordable home, how can we waive fees to help people build it?” he said.

He noted a recent Auditor General report had shown that the government’s affordable housing programme was “no longer affordable.”

Hew said developers already pitch homes priced around $900,000 as affordable, and that the legal changes, could potentially be used to justify fee waivers for large condo developments.

Speaking to the Compass after the debate, Hew said the ‘Schedule 2’ fees covered by the amendment and now within Cabinet’s power to waive could be substantial. He projected those fees could be as much as $300,000 for a large commercial development and $700,000 for a hotel project.

“On a sufficiently large development, a waiver could exceed $1 million,” he said.

Hew acknowledged the current Cabinet was not proposing to grant waivers of that size and said he accepted that the intention was, as stated, to try to provide support for those that need it. But he said the legislation “should protect the public interest beyond the intentions of the people presently exercising the power.”

He added, “If waivers were granted across a number of substantial developments, the cumulative amount of foregone government revenue could run into millions of dollars,” he said.

“That is why I believe the guardrails should accompany the power, not follow it.”

He also warned that homes built with waived fees could be flipped and “resold at a massive profit because of the discount they had in building it.”

He called for minimum ownership periods, repayment of waived fees on early sale, and liens requiring homes to be resold through the same housing programme.

During the committee stage, the government formally backed away from the earlier proposal to give Cabinet greater authority over broader land-use rules.

“To be entirely frank with the House, the intention was to pull the planning regulation out of Parliament oversight so that Cabinet could deal with them directly and more swiftly,” Ebanks said, acknowledging public concerns and advice from former politicians had influenced the shift.