Government has 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).
Minister of Industrialisation, Trade and SME Development Immanuel Ngatjizeko stated that his ministry will soon meet with nominated officials to discuss what is expected of their appointments.
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.
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.
“In the interim, the rent boards should be operationalised whilst MITSMED is in the process of drafting a comprehensive policy on rent of dwellings and business premises,” noted the Office of the Attorney General when approached for legal advice by the ministry.
However, in a recent interview Standard Bank manager of economic and market research Mally Likukela warned that the idea of implementing rent control to reel in out-of-control increases in rental prices creates market distortions.
“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,” said Likukela.
“Over and above this, the economic and social costs of rent control almost always outweigh any perceived short-term benefits they provide. Rent controls are both unfair to owners of rental units and damaging to some of the very low-income renters they are supposed to protect.
“Government should explore other options to address the housing crisis, because reliance on rent control as a solution to the problem of housing affordability cannot be justified at this point in time,” Likukela argued.