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Talking socialist

Talking socialist

We must find time to stop and thank the people who make a difference in our lives. President John F Kennedy.

One group of people who make a difference in the lives of others are landlords; people who invest their resources in residential property which they let out to others to occupy. Indeed, any critical evaluation of the expenditure on buildings must point to the fact that domestic residential property does not yield the best dividend. Where one is lucky to get corporate clients, or where one secures land in prime areas, that is where the rent could be good enough as a source of reliable income.

I have a building in my village and when I look at the cost, I am not sure that rent income will enable me recover the cost in my lifetime. The only consolation is that buildings appreciate in value over time if they are regularly and properly maintained. That means that at any time that you want to sell the property you are likely to gain more than you spent on the project.  That may be the reason why people should continue to invest in residential accommodation, but not because of rent income from domestic tenants. 

In the past, the government was involved in regulating all manner of services and products. We used to have what we called essential commodities. Indeed, even transport fares were determined by the government. The prices of newspapers were determined by the government. It was based on that policy of government involvement in all manner of things that we had a rent act in 1963. Today, we are in 2016, where even areas that were otherwise considered to be within the domain of government have been ceded to autonomous groups. Today, the government finds it irritable to determine the prices of utility services, including water and electricity. The mention of subsidy is an anathema. 

At a time that we have deregulated the petroleum sector, we hear of government deciding to come out with a new law to regulate rent.  There is a housing deficit and the government is unable to provide any support for the housing industry. What is needed is not a law that will tie the hands of landlords so that they cannot demand rent advance beyond one month. There is an existing Rent Control Law which we are unable to enforce because it is not functional. We have public agencies which have the capacity to put up their own structures but which have rather decided to rent private facilities and pay huge rents over long periods.

We should never assume that every landlord is a Shylock who demands his or her pound of flesh. There are tenants who gore at their landlords. Therefore, in whatever we do, we must think about the interest of both. For as long as the state is unable to provide affordable houses, we need to encourage and motivate individuals to invest in the housing sector. There is no law which compels a landlord to rent property to an individual for domestic use. If it comes to the limit, such houses could be turned into guest houses.  

We must allow tenants and landlords the freedom to negotiate terms and conditions of tenancy agreements. As much as we do not want landlords to fleece their tenants, we should not encourage tenants to mess their landlords around. There must be mutual respect.  Equally, it must be noted that in the situation where long-term rent advance is paid, when the tenant can afford it, some benefit will accrue to the tenant since the landlord cannot ordinarily increase the rent for as long as the advance is not exhausted.

There is also the other side. If tenants are to pay for only one month at a time, then landlords may not maintain the facilities regularly since the rent might not be enough to carry out such periodic maintenance works. We must allow the market forces and good sense to prevail so that the state does not appear to be more interested in the welfare of tenants than landlords. They both need the protection of the state.

The failures of the state in meeting the needs of the vulnerable in our society must not be pushed to individuals who invest their resources in housing and rental units. Landlords must be encouraged and motivated to invest more in rental units. They must not be seen as reaping more than they have sown but  they must get the just reward for their undertakings.  For as long as the state does not provide the land for such housing units and individuals have to struggle to acquire land, whose market is not regulated by the state, we should not tie the hands of landlords and tenants  to any fixed period of tenancy. 

 

 

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