Rent control could lead to urban decay


With rent control one of the options on the table by government to solve the high rental prices in the country, experts are of the opinion that it may actually exacerbate the situation. Housing gurus weighing in on the matter are of the opinion that rent control could lead to urban decay and even a decline in housing investment.

According to Namene Kalili, Senior Manager for Research and Development at FNB Namibia, rent control is not a viable solution because the housing crisis is a supply side problem while rent control is a demand side intervention.

“Namibia finds itself in this position because municipalities have failed to service sufficient land over the past 10 years. Rent control usually leads to urban decay, in that the landlords can no longer afford to maintain their properties at these lower rental prices – pretty much the same as government housing. As the properties deteriorate so too does the quality of tenants and before you know it the rental stock will be overrun with criminals and illegal immigrants. Many countries tried rental control after the Second World War, such as the USA, Britain and even South Africa. These all resulted in urban decay and slums. I am yet to find an example of successful rental controls,” said Kalili.