AR firebrand, Job Amupanda, is hot on the case of government for its failure to implement the apartheid era 1977 Rent Control Ordinance.
This is a part of his courageous long-standing call for lower rents in Windhoek as a way to address the legitimate concern that lower income working Namibians cannot afford to rent (or buy) decent housing.
We applaud Amupanda’s goal and tenacity, but question his strategy.
We caution about the meanness of standing on a platform promising a starving man bread for dinner tonight when you know well that the wheat to grind into the flour needed to bake the bread hasn’t even been planted yet.
The yet undefined term ‘rent control’ in Namibia, could be unattainable on any reasonable timeline.
There is no doubt that trade minister, Tjekero Tweya, and his predecessor in that portfolio, have danced around the land mine of rent control in Namibia.
Tweya will continue tap dancing using whatever ‘reasonable’ sounding excuse justifies delay. The minister knows well that getting a new law or even amendments to an existing law scripted, legally reviewed, affirmed by Cabinet, reviewed for public comment by affected communities and then onto the table for Parliament, passed and signed by the president can possibly take 10 years.
Look at how long NEEEF is taking and that is supposedly a priority.
Amupanda’s legal threats for a solution are laughable, when cases that are not urgent take years for a first hearing with legal manoeuvring delays from either side as the norm, let alone a final judgement.
The route the AR co-founder has chosen to take for his war in support of lower rents is ill-conceived.
That 1977 rent ordinance notwithstanding, we are baffled that Amupanda doesn’t ‘get it’ that money makes the world go around, here in Namibia and everywhere else.
Fact – there is no money to implement either the existing ordinance or begin the research necessary to write an enforceable new law. We can argue for months about why this is the case, but that doesn’t change where we are right now.
We believe that unilateral rent control in a capitalist economy is a huge inconsistency. Can government really intervene in the market and tell property owners what they can charge for their assets?
Supply and demand are realities that influence rental prices. If there are two rooms for rent and 20 people in line to rent them, the cost of those rooms will reflect that reality.
This is economics 101 for Amupanda and we wonder why his push for a solution to the high rent problem doesn’t embrace that reality. The strategy to achieve lower rental prices should be for many more low-income rental facilities to enter the market in order to increase the supply.
The screaming should not be so focused on the 1977 ordinance and should be on demanding that government land and any existing unoccupied buildings be converted (at the State’s expense) to minimal yet, safe, clean, low income housing units for rent.
Rent control faces several barriers in a profit-making, business focused, pocket-lining economy. First and foremost, a significant number of the lawmakers who would amend or re-write a Rent Control Act are likely owners of rental property.
Asking decision-makers to pass legislation that cuts their own income is politically naïve.
Another challenge faced by anyone wishing to regulate the rental industry is that many renting property don’t pay taxes on that income and may be reluctant to register as landlords.
“Informal” rentals are a large part of the rent exploitation scourge that urban Namibia faces and which AR is protesting. How then, can that be addressed by the existing ordinance or a new one?
In addition, rent control implemented across the board affects all those who have illegal shacks in their back gardens in Katutura, properties on communal land, struggling pensioners renting out their kids’ old bedrooms, as well as the big fish corporates who build and rent apartment blocks.
We doubt there is the political will to go house-to-house in areas of the ruling party’s voting base, to implement a rent control law.
Logistically, Namibia does not have the tools at hand to begin writing or enforcing any rent control law. Government does not have an updated list of properties available for rent in Namibia.
That product audit alone would take years and tens of millions of dollars that simply aren’t available. No law should be passed or enforced when its scope is unknown – it is a wasted exercise.
Alongside the product audit will be a necessary nation-wide property valuation, somehow done by government. The rental of a room in a house in Havana will be less than the rent for a full-serviced flat behind a property in Luxury Hill and yet, both properties would fall under the rental ordinance.
Calculations about cost per metres squared, number of bedrooms, access to ‘extras’ like swimming pools, garages, recreational space, nearby locations of necessary services, security, Wi-Fi available, laundry facilities, en suite bedrooms vs other rooms, and a host of items which real estate brokers can relate, affect rental prices.
What would be the rental price cap on a room with no running water and electricity put up behind one of the new houses built last February in Otjomuise? What about for a two bedroom flat with one half bath in Rocky Crest or a single bedroom in a mansion in Ludwigsdorf? How many people can occupy a two bedroom house and who will police any of this?
We submit that, even if there was money (and there isn’t), government is a dozen years away from enforcing unilateral rent control.
Those renting must share the risk alongside the property owner. That is the other side of the 1977 ordinance that Amupanda is demanding – is he aware of that?
Changes in insurance rates, property taxes or building/health regulations, as well as increases in prices for infrastructure repair (pipes, roofing, and walls around the house) are born by the property owner, not the renter.
Renters routinely destroy/damage property they do not own, pay rent late, illegally sublet rooms, claim that four people live in a house when there are 10, and other ordinance violations.
If rents are capped by law, will there also be easier evictions, fast-tracked civil cases against errant renters and negative credit agency reporting for those absconding?
From a business stand point, why would those who can invest in low income rental properties do this when government could cap rents charged and therefore, cut profit projections?
Those building rental properties, seek a return on investment that justifies the entire project, otherwise, why do it?
Should property leasers who lose money due to rent control head happily towards bankruptcy because they are helping the people pay less rent per month? No one opens a window and throws money out just to see how lovely it looks as it blows away.
Just as NEEEF’s former mandatory 25 percent ownership by previously disadvantaged Namibians died because it would reduce investment in Namibia, rent control may remove thousands of potential properties from the market just when the country needs more available.
Amupanda must consider spending more energy battling the cause of high rents. He should first fight to get more rental properties into the market - that will drive down the rental rates.
We need more loud voices to join Job’s, but a more practicable strategy that focuses on the causes of high rents, and not cloud the issue with distracting noises, like making idle threats to sue the government for not implementing unenforceable laws.