Rent control in middle income housing :a case study of Buru Buru housing estate, Nairobi

Abstract

In Kenya housing remains a persistent problem, especially in the low and middle income housing categories. In trying to solve the housing problem, more emphasis has been on how to provide sites and services to cater for the low income categories; mortgage, and tenant purchase schemes for the, middle income categories. What essentially is emphasized for these two housing categories is home ownership. Rental-housing as an alternative to owner-occupied has been neglected, and supply is left to individuals who buy from developers single units. The nature of rental housing market is that it allows exploitation of tenants by the landlords; and this has often prompted the legislators to control rents. Rent control as a tool of the housing policy has been in existence since 1919. It has been extended to cover more houses, but it has come under criticisms. It merely protects those already housed and cannot assist those who have no shelter at all. It has been seen as the cause of the fall in the supply of rental housing , and as a tool for encouraging home ownership. Property values are also affected. Rent control leads to a fall in prices of rental housing, thereby discouraging investors. The aim of this study is to find out whether rent conditions affects the distribution of tenure and property values in the middle income housing. This is done by means of a case study of Buru Buru - a typical middle income housing estate. Primary and secondary data gathered is analysed mainly using descriptive statistical techniques. It is shown that middle income housing investors are not profit motivated. Property ownership is influenced more by non-economic factors than economic ones. Rent control is price oriented and expected to influence the profitability of renting or buying a house. However, acquired property is rented irrespective of whether it earns some profit or not. Controlling profit therefore does not affect the owner's decision. Tenants are shown to be less perceptive to Government policies and more controlled by free market forces. Though aware of the operations of rent tribunals, they find the process of solving their disputes through regulations time wasting. They are more committed to the neighbourhood than the dwellings they occupy. So they rather move to other dwelling houses in case of a dispute. Existence or absence of rent control in middle income housing will not affect the participants' decisions. It is recommended that rent control can be removed from the middle income housing category on economic grounds. However, this study recognizes the social-political need of such regulations as the Rent Restriction Act; and in that case the rent control scope could be narrowed; and its administration could be decentralised to grass root level; to reflect the neighbourhood effects in the determination of standard rents.