Tuesday 11 May 2021
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Rent market should not be lucrative-Lawyer

The imminent formation of rent control boards have been received with mixed feelings, but one of the local lawyers believes such boards are crucial ensure that the current lucrative nature of the rent market is brought under control. Kadhila Amoomo, during a recent presentation delivered at one of the Affirmative Repositioning Critical Conscious Dialogue sessions on Understanding Rent Control Boards, said landlords possess excessive power which he feels is disadvantaging tenants. The shortage of housing units in the country has led to rent prices skyrocketing over the years, especially in Windhoek, a situation evident from mushrooming of blocks of flats in the capital which have become a cash cow for the owners.  “Renting should not be lucrative. The same way it should not be lucrative to sell basic essentials such as water in a drought stricken country. For those who say rent control will not work, they must remember that scarcity of houses should not be a reason for landlords to exploit tenants. We have a high unemployment rate in the country but that does not give employers the right to exploit workers, housing should not be treated differently,” Amoomo lamented. Amoomo also allayed fears that the rent control boards will disadvantage landlords.

“The ordinance is not against landlords because it is not one-sided, all it seeks to do is to ensure that both the landlords and tenants are protected,” he said.  “As a lawyer when you walk into my office my fees, depending on the services I will provide, are known. The same should apply to the rent market,” he said. He called on lawmakers to ensure that the Rent Ordinance of 1977 is implemented immediately. “The taxi, petroleum and electricity are some of the many industries that are regulated in this country, so there should be no reason why the rent market should not be controlled,” he said. Amoomo urged those who will serve on the rent boards to have the interests of the public at heart and adopt a circumstantial approach instead of making blanket decisions. Government recently asked the Affirmative Repositioning group to nominate members to serve on the rent boards to be established in the Khomas Region in Windhoek, the Erongo Region (Swakopmund and Walvis Bay), the Kavango East Region (Rundu) and the Oshana Region (Oshakati).

Even though local economists have warned that rent control could create distortions in the local property market, a Special Cabinet Committee on Land and Related Matters (SCCLRM) has directed government to introduce measures aimed at regulating the rental market. Local economist Mally Likukela was recently quoted saying: “Rent control has proven elsewhere to be an ineffective and often counterproductive housing policy because of its ignorance towards the very basic laws of market economics. Not only that, but it also destroys the key functions of rent in the housing market that are essential to the efficient operation of housing markets in the economy. He noted that the key functions of rent in the housing market include compensating providers of existing housing units and developers of new units for the cost of providing shelter to consumers. A further function is providing economic incentives to attract new investment in rental housing, as well as to maintain existing housing stock. Such regulation, says the committee, will prevent the exploitation of tenants by landlords.

In pursuit of this mandate, the SCCLRM directed the Ministry of Industrialisation, Trade and SME Development (MITSMED) to review the Rent Ordinance of 1977 to establish whether it can affectively regulate the market. The Rent Ordinance is, inter alia, aimed at establishing rent boards within local authorities, controlling rent payable in respect of leased dwellings and prescribing punitive measures for non-compliance with the civil judgment of the rent board. “The Rent Ordinance of 1977 is the appropriate legislation to regulate the rental market through the appointment of rent boards, which will assist with controlling rent payable in respect of leased dwellings and business premises and receive complaints with respect to leased dwellings in areas of jurisdictions of such boards. “MITSMED would, however, be required to undertake a review of the Rent Ordinance of 1977 in order to allow the effected implementation of the ordinance.

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