ST. THOMAS, VI — The Committee of the Whole, led by Senate President Milton E. Potter met in the Earle B. Ottley Legislative Hall. Lawmakers received testimony concerning rezonings on the island of St. Thomas. Additionally, testimony was received concerning the cost of living in the territory. Lawmakers cannot vote on measures in the Committee of the Whole; however, action will be taken at the next scheduled Legislative Session.  

Lawmakers first considered Bill No. 36-0033, An Act amending official Zoning Map STZ-9, St. Thomas, Virgin Islands, to rezone Remainder Parcel No. 19-1-2, Parcel No. 19-1-2-7 (Eastern portion), and Parcel No. 19-1-2-7 (Western portion), Estate Smith Bay, Nos. 1, 2, and 3 East End Quarter, St. Thomas, Virgin Islands from A-2 (Agricultural Zone) to B-3 (Business Scattered).  Leia Laplace-Matthew, Territorial Planner at the Department of Planning and Natural Resources delivered testimony. The applicant, Candace Lindqvist-Wallace intends to develop offices, which is in line with the trend of rezonings for mixed development in the area.  A single, one-story building is planned which would be strictly for commercial use. Currently, there is no timeline for construction. There was no opposition to the proposal at the DPNR-CCZP public hearing held on November 18, 2024.  The area has grown into a mixed area corridor heading towards the Red Hook Ferry Dock, shifting from agriculture. 

Lawmakers also considered Bill No. 36-0034, An Act amending official Zoning Map STZ-9, St. Thomas, Virgin Islands, to rezone Parcel No. 19-1-2-4 Estate Smith Bay, St. Thomas, Virgin Islands from R-1 (Residential-Low Density) to B-3 (Business Scattered).   Keshoy Samuel, Planning Technician delivered testimony.  The property owners, Najocki Boyd and Kit-Alia Freeman intend to develop a mixed-use development consisting of 28 residential units, mainly long-term rentals, and some short-term rentals, and nine commercial units. Six buildings of up to three stories are proposed. Each building would be a phase, and would take approximately 18 months to complete, with the entire development taking six years to be completed. There was no opposition to the proposed development at the DPNR-CCZP hearing held December 16, 2024.  One letter of support was received.  Both rezonings, which were sponsored by Senator Milton E. Potter by request of the Governor, were recommended by the Department. Senate President Potter asked how the recently approved Comprehensive Land and Water Use Plan helped with the proposed rezonings. Laplace-Matthew stated that one of the visions that the Department sought out was for more mixed-used areas because there is limited land.  

Furthermore, lawmakers received testimony concerning the cost of living in the United States Virgin Islands.  Wayne Biggs, Jr., Chief Executive Officer of the Virgin Islands Economic Development Authority delivered testimony. The USVIEDA has not done any studies on the cost of living in the territory, nor has it done any study on the pricing structure of consumer goods in the territory. Biggs’ testimony stated that in his opinion, several factors contribute to the high cost of living in territory, including the fact that we live on islands, and we produce and manufacture very little, causing us to import most items, the cost of shipping and freight, the cost of fuel and electricity, tax structure, small market size, lack of economies of scale, and online competitors. Imports can directly affect consumer goods by directly influencing the cost of goods in a country. The cost of shipping and freight directly impacts consumer goods pricing by being factored into the overall cost of a product, often leading to higher prices for consumers. The cost of fuel is often factored into the products, which increases transportation costs. The cost of electricity increases the production cost of manufactured goods.  Taxes add an additional cost to the production and distribution of goods, which is usually passed on to customers. The small market size also contributes to less competition, which allows them to charge higher prices. Online shopping also can make it easier for customers to compare prices and purchase from online competitors.  

Scott Barber, President and General Manager of Universal Business Supplies and a member of the St. Thomas-St. John Chamber of Commerce delivered additional testimony. Barber shared similar statements, highlighting numerous factors that affect the cost of doing business in the Virgin Islands. Barber mentioned business rent, stating that the high cost of purchasing land and buildings in the US Virgin Islands has a major impact on businesses.  The Virgin Islands also overall has a higher cost of living, and employees require higher salaries to afford living in the Territory. High living expenses often lead to frequent employee turnover. Residents spend a high amount of their income on necessities, they spend less on non-essential items.  Barber also voiced concern over high insurance premiums, limited market size, government hiring, which often entice candidates to apply for higher paying jobs, that smaller businesses cannot afford to pay.  

Mark Wenner, Assistant Professor of Economics at the University of the Virgin Islands, voiced additional thoughts on the matter. Wenner stated that there were many reasons that contributed to the high cost of living in the Territory. Reasons included the insularity of the Virgin Islands, with it being over 1,000 miles away from the continental United States, its main trade partner. Bulk and containerized cargo must come by sea, and only two major maritime shippers serve the territory. This high reliance on imports results in higher prices. Electricity costs in the territory are the highest among the 56 US jurisdictions, with frequent service interruptions. Real estate prices also inflated due to limited land availability, a strong demand for second homes, and short-term vacation rentals. A large amount of the population is transient, primarily consisting of hospitality and construction workers. The high costs of construction, low density zoning regulations, and the inability to refurbish dilapidated and distressed housing cause high prices.  

Wenner suggested numerous ways to reduce the cost of living, including enhancing energy efficiency and investing in renewable energy, improving the business climate by improving infrastructure, supporting local agriculture, creating affordable housing initiatives, revising the tax structure, suggesting that a sales tax should be adopted and eliminate the gross tax receipts, as well as promoting more business competition. Per Wenner’s testimony, the cost of living in the Virgin Islands could be compared to that of other insular territories and states of the United States of America, including Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and Hawaii.  

H. Natalie Hodge, Commissioner of the Department of Licensing and Consumer Affairs delivered further testimony. The department does provide a monthly Shopping basket to inform consumers of pricing trends, it should not be considered a formal economic analysis. The Department is working to address issues of the high cost of consumer goods by encouraging supplier diversification, streamlining business licensing to attract new wholesalers, and promoting transparency through comparison reports.  The Department has recommended expanding price monitoring efforts by developing a Consumer Price Monitoring Dashboard, in collaboration with the Bureau of Economic Research.  Hodge stated that consumer protection is a shared responsibility, asking legislative collaboration to strengthen enforcements mechanisms and secure additional funding. 

Geraldine Pitt, CEO of VIYA, gave additional testimony. Pitt stated that even though the telecommunication market in the Virgin Islands was competitive, the small size of the economy limits profitability. The presence of multiple providers has created a competitive environment that has reduced profit margins. The high cost of electricity in the territory, which is three times the mainland average, has produced a financial burden. Frequent power outages in the territory require significant investment in backup power and restoration efforts.  Hurricane preparedness and recovery is also another major cost factor in doing business in the territory, which necessitates yearly preparation and costly insurance. Without this insurance, VIYA would not have been able to recover from destructive hurricanes. The region is also reliant on subsea connections to major internet hubs, and leasing space on cell phone towers, which has become very expensive. Pitt urged that federal funds be used to make telecommunications more affordable, such as the $25 Million available from the Broadband Equity, Access, and Deployment (BEAD) program to support consumer subsidies.  

Rick Grant, Strategic Advisor at the Virgin Islands Housing Finance Authority delivered testimony. Grant stated that the US Virgin Islands has experienced a significant rise in construction costs, making it very difficult to build homes in the territory. Many other items have been affecting the affordability of housing, such as the cost of purchasing property. Additionally, there is a shortage of contractors, which is now causing homes to take longer to complete.  Other factors affecting the high cost of housing include the low inventory of single-family homes and plots that fall below the sales price limits of VIHFA and the HUD home Program.  Homeowners insurance remains expensive, as well as the cost of construction materials.  Salaries are not increasing at the same pace as the cost of living, potential clients are burdened by financial obligations such as student loans, credits cards, auto loans, medicals bills, and having little to no savings for down payment or closing costs. The meeting then stood in recess until Tuesday, March 4, 2025 to receive further testimony concerning the cost of living in the territory. 

Senators present at today’s Committee meeting included Milton E. Potter, Kenneth L. Gittens, Marvin A. Blyden, Angel L. Bolques, Jr, Dwayne M. DeGraff, Ray Fonseca, Novelle E. Francis, Jr., Alma Francis Heyliger, Hubert L. Frederick, Marise C. James, Franklin D. Johnson, Carla J. Joseph, Clifford A. Joseph, Sr., Avery L. Lewis, Milton E. Potter, and Kurt A. Vialet.  

The Division of Public Affairs is committed to providing the community with accurate information on legislative proceedings and other events at the Legislature of the Virgin Islands. Visit legvi.org.  

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