Given the obscene rental prices that urban dwellers have had to contend with in recent decades there are very few people who will disagree with the need to re-introduce Rental Boards to regulate the out-of-control rental prices in urban and rural areas.
Thre are many questions though that surround the setting up of such Rental Boards, not the least of which is whether the Rent Ordinance of 1977 is still valid, given that it is based on defunct legislation and the authority of offices – such as the Secretary for South West Africa – that no longer exist.
Following Namibian independence in 1990, as neoliberal policies set in, all Rent Boards ceased to function in 1991. Subsequently the 1977 Ordinance lost its power and – although it still exists – was only applicable to business premises.
Nevertheless, the need to regulate the rental market is imperative and a matter of high priority, as the exorbitant cost of rent in urban areas is one of the major contributory factors to mass poverty, deprivation and the exclusion of historically disadvantaged people from access to basic household services.
At last glance, no less than 116 000 people have resorted to living in tin-shacks on the outskirts of Windhoek. Except for the scale, the situation is no different around the country, with so-called ‘informal settlements’ (shantytowns) springing up everywhere, as a result.
Many urban dwellers will testify that they could simply not afford to rent standard accommodation anymore, which compelled them to improvise by building shelter made of cardboard boxes, corrugated iron and any other useful debris they can find.
Rental prices in the urban areas do not in any way correspond to the reality of people’s earnings – and that is a fact. To illustrate the ridiculousness of the situation: in one instance a garage in Khomasdal (with outside toilet) was last year advertised for N$3 000 per month.
The reality is that workers at the bottom of the food chain, for example construction workers with an average monthly income of N$4 140 and domestic workers with an average wage of N$2 762 (as per 2014 Labour Force Survey) would barely be able to afford to rent a garage to live in at current prices.
It needs be said that we cannot seriously reduce poverty – as is the stated aim of the government – without reducing/moderating the costs of housing, in particular rent, which takes up a major portion of most households’ income.
In one incident the council at Oshakati has been struggling to evict people from a local cemetery where destitute people had built some shelter – for sheer lack of alternatives.
Many people on the brink of destitution have been driven by the dictates of the rental market to the margins of society and a hellish existence without access to basic services, such as decent shelter, running water and basic sanitation.
The benefits of a tenancy deposit programme
In addition to the principle that the nomination of candidates for the mooted Rent Control Boards should be open to the general public and not only to a few select groups, my main proposal is that our lawmakers should consider establishing a Tenancy Deposit Protection (TDP) programme.
Rental deposits typically amount to one month’s rent, but the fact is once a tenancy ends, there often tends to be a dispute between landlord and tenant over who should get the deposit.
Ideally, all tenancy deposits throughout the country should by law be lodged with a central Tenancy Deposit Protection Fund, which could be administered through the structures of the Rent Board. This would provide security to both tenant and landlord, as the deposit will be returned to the party it is due to.
Such a TDP Scheme would also provide rapid dispute resolution mechanisms through the Rent Boards to reduce the need for conflict and court litigation over rental deposits.
The TDP regulations would also enable the new Rent Control Boards to develop a precise database of rental statistics, detailing how many people are renting in each area, how much they pay in rent, and to whom. The TDP scheme would thus enable Rent Boards to gather accurate data on the numbers, location and cost of rentals in every area.
Secondly, rental deposits currently tend to be transferred to the landlords’ account, where it accrues a little interest, which is generally not paid out at the end of the tenancy.
If the regulations compelled all landlords to transfer all rental deposits to the TDP fund (no more than 14 days after receiving it) such interest would accrue to the TDP programme, thus making it available to finance the monitoring and implementation of the regulations by the Rent Boards.
Further, such a TDP fund, administered by the Rent Boards – or as the Ministry of Finance sees appropriate – would also be available as a bulk source of financing/loans for local authorities to service land and to set up social housing projects, which could in turn alleviate the housing shortage and help bring down house prices by boosting supply.
Thus, a tenancy deposit scheme – as is already implemented in several countries in Europe – would protect both landlord and tenant from unfair practices, would reduce the need for litigation over rental deposits, and would provide the evidential base on which the Rent Boards can implement a fair rental policy.
Above all, the interest accrued from such a massive fund of all tenants’ deposits, could then be used to finance the activities of the Rent Boards, instead of making these new bodies an additional burden on the backs of already over-strained taxpayers and hard-pressed tenants.
* Jade McClune is a sub-editor at New Era Publication Corporation.