Away with it!

Rent Restriction Act oppresses the poor

Franklin
Johnston

Friday, May 18, 2018

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Remember price controls? The Rent Restriction Act (RRA) of 1944, now under review, purports to help the masses, but does the opposite. It limits housing supply; creates artificially high rentals, house prices; and foments conflict with poor owners and tenants.

The 1940s were chaos. We got the vote; butter and houses scarce; Bustamante won our first election; and the RRA became law. Can restraint of trade grow an economy or prosper a nation? No! Yet disparaging investors, as rapacious landlords, rob us of new housing and hurt all.

Why take the RRA into the 21st century? We sent thousands to university, can't they write a better law?

We need a modern Act on residential and commercial tenancies ere 2018 ends. No “restriction”, as we are investor-friendly.

Decent housing — owned or rented — is the most important element in family life, but history, data show that most do not and will never own a house, but it is a hook baited for the gullible by politicians.

The RRA, gestated in the 19th century, crafted in the 20th, passed in 1940s, updated in 1983, is obsolete. It discourages investment in rental housing and cramps supply to inflate demand. For some time politicians whip-up “own a house” frenzy so many curtailed living to buy a house fast; extra work, lived cheap, saved, but soon the kids raised by semi-literate “Miss Inez” were off to university; no house as yet. Friend, you only get one shot at parenting! Who's sorry now?

The RRA makes as much grief as it solves and is a turn-off to big corporate investment in rental housing, which would grow and professionalise the sector. In a normal year the UK builds some 15,000 houses for every million people and our Diaspora. We, not even 3,000. Why?

We must allow supply and demand to moderate rentals and house prices. So, Prime Minister, we need a 21st century “Act to promote housing and business tenancies”; boost investment in rental housing, office, warehouse space for MSMEs; encourage jobs, consumption; then growth will follow.

All families must rent to get on a path to owning, but the RRA is a choke point that politicians use to create “buy a house” angst, drive demand through the roof, so those in real estate rip us off! One walked from the office with $100 million straight into politics! Collusion, corruption is massive! Check the number of lawyers disbarred because of real estate.

What must we do? In defiance of the UN declaration our leaders did not include housing in our Bill of Rights. Our leaders chose rights which gave them no material obligations to us. We are free to live, die or talk, but these cost Cabinet nothing — bhutto cheapskates!

Canada values its citizens, so housing, health, education are rights, though unaffordable at the time. We need a Fair Tenancy Act that appreciates market forces in moderating housing demand and supply; approves rental housing for investment by pension trustees to free-up billions; sets targets and incentivises investors to meet them; speaks to housing students, young workers, old people, and families saving to get on the housing ladder; uses housing to unite not divide by class or income; legitimises holding income property in lieu of pension as only, say, 10 per cent of us are in pension schemes.

The state must be “light touch”, but a swift, effective regulator. It must not be a landlord but be accountable for the indigent, young offenders, and disadvantaged, eg battered wives and the poor. The new agency must be a node of research, planning, and best practice. Canada, former British colony and Commonwealth member with housing deficits like us, fully embraced the Universal Declaration of Human Rights “and endorsed the view that housing is a human right” as “housing provides the foundation for interacting with the broader community and for general well-being and social inclusion. Adequate housing facilitates access to suitable employment, community resources and supports and educational opportunities” (Policy on Human Rights and Rental Housing). We should also study Ontario's Residential Tenancies Act. Cabinet must step up and do right!

Housing completions should be, say, 15,000, and if Cabinet helps the poor to pay rent and gives priority to first-time owners we can moderate rents and house prices. But be aware that some powerful people have interest in pressuring the poor by keeping rents and house prices high. The RRA narrative is, “We will make rents cheap so vote for us.”

Yet our experience of the 70s is market forces regulate better than law. So who benefits? The RRA controls supply at the bottom of the housing ladder, so pressure builds and inflates demand to keep house prices; diplomat rentals for rich owners high. Evilous!

Prime Minister, we want an uplifting, investment-friendly Act to remove despair and give hope. Life cannot just be for the “own a house” few, so let's incentivise business to deliver a quantum boost in the rental housing stock and entrench rent subsidy for Programme for Advancement Through Health and Education families. They are human too!

Let's start private housing associations to fund houses for dues-paying members. No ghettos after 2045; no gully-bank people after 2035; no street people after 2030; the path to owning must be unhurried and sober with decent housing for all by 2025!

Finally, how do we “restrict” rent? We ensure there is always a good supply of houses for rent on the market. Yes, we can! Stay conscious!

Franklin Johnston, D Phil (Oxon), is a strategist and project manager; Fellow of the Chartered Institute of Logistics and Transport (UK); and teaches logistics and supply chain management at the Mona School of Business and Management, The University of the West Indies. Send comments to the Observer or franklinjohnstontoo@gmail.com.

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