Editorials

Offer developers incentives to build affordable houses

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Majority Leader Amos Kimunya. PHOTO | NMG

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Summary

  • The government-backed Landlord and Tenant Bill of 2021 demands that rent increase should not exceed the annual average inflation rate for the preceding year.
  • This is a good move because some landlords have been charging high rents in dwellings that lack proper toilets, sewerage, and drainage systems, roads, and boreholes especially in areas with scarce piped water.
  • Others have unreasonably hiked rents after tenants move out, overpricing some upmarket estates.

Kenya’s rents are too high, and the fact that most are artificially inflated compounds the problem. That the government is seeking to regulate both commercial and residential rents, however, raises the question whether this is a case of overregulation and interference with private agreements between landlords and tenants or a move to correct unfair pricing.

The government-backed Landlord and Tenant Bill of 2021 demands that rent increase should not exceed the annual average inflation rate for the preceding year.

This is a good move because some landlords have been charging high rents in dwellings that lack proper toilets, sewerage, and drainage systems, roads, and boreholes especially in areas with scarce piped water.

Others have unreasonably hiked rents after tenants move out, overpricing some upmarket estates.

Rent regulation will be a boon to the economy. If rents are too high, small businesses cannot make enough profit to survive, and most spaces will remain empty for years, hence a loss on the part of the developer or landlord.

But if rents are too low, landlords will not have the incentive to lease out or develop properties.

A rent increase capped at a 5.2 percent average inflation rate seems ideal in reversing decades of rampant landlord abuse and protecting tenants who have seen rents surge nearly threefold from 2007.

Part of the reason for the sharp rent increase is a high demand against a low supply of quality, affordable housing.

Therefore, alongside the rent law, the government must start offering incentives to property developers constructing decent homes made from cheaper raw materials.

More housing units need to be brought to the market to alleviate the current shortage and high rents. Lowering rental income without incentives to build more houses or to renovate existing ones could lead to worse housing conditions.

Land in towns contributes a significant portion of the unit cost of a house and offering developers incentives and opening up far-flung areas with faster, reliable rail transport, for instance, will likely push down rents.