BHC halts rental hike adjustments

Batswana battling with exorbitant rental prices in open market There is a need to re- enact Rental Control Act – experts

Botswana Housing Corporation ( BHC) has succumbed to pressure to halt the previously indicated rental adjustments that were to be effected 1 April 2021.

Instead, BHC will increase the rentals in phases over the next five years until they are at least 20 percent below the market price, Minister of Infrastructure and Housing Development Mmusi Kgafela told media on Tuesday.

He s ai d BHC and his ministry had held consultations on the impact of the blanket increase and concluded that the phasing of the increase would be better, adding that it is still a priority for them to ensure that they reach BHC’s objective of being at par with the current rental market rates.

Kgafela hastened to emphasise that the proposed increase would not in any way influence the private market to increase prices also because BHC makes up only 4 percent of the rental housing market.

Two weeks ago, Parliament had rejected a motion to defer the BHC rental increases, presented by UDC MP Taolo Lucas, who had called on BHC to postpone the adjustments, which were to be effective 1 April 2021, due to the economic struggles that Batswana were currently faced with.

“The economic distress that has been brought on by the COVID- 19 pandemic on citizens, will make it difficult for tenants to afford the increased rent,” Lucas had said in part.

In response, MP Kabo Morwaeng had presented arguments against the motion. He argued that to be able to build more houses for Batswana, BHC has to make a profit which would be enabled through the rental price hikes, adding that the fact that BHC rentals had not been increased in 16 years had meant foregoing rental revenue of P2.4 billion.

Morwaeng said that below market rental discourages people from buying BHC houses, and encourages illegal sub- letting. He also argued that the current gap between BHC rentals and the market is on average 193 percent. The unregulated private rental market makes it susceptible to both boom and crisis, and with inflation, tax increase and stagnant salaries, crisis might be looming in the housing rental market.

“Not only is there a dire shortage of affordable quality accommodation in most urban areas, but unscrupulous property owners and agents are randomly setting prices in response to high rental demand,” said real estate agent Monica Ketshabile.

She said it was imperative for Government to consider statutory interventions such as the establishment of a Rental Board and to improve and re- enact the idle Rent Control Act.

BHC, which had previously been a buffer between desperate homeseekers and unscrupulous property owners and agents who exploit the free market - has notably struggled to meet the housing needs of residents in recent years due to urban expansion and migration.

And with the open private market, it is important to avoid operating from a vacuum but formalising the sector to ensure its smoothrunning, said President of Real Institute of Botswana Isaac Molefinyane, who is also director of Matchmakers Properties.

“There are many fly- bynight agents who are messing up the property rental market by setting their own terms and regulations, which leads to overall inflation of house purchase and rental prices,” he said.

Low-income rental market has led to shortage of adequate housing in most urban and semi- urban areas. A 2018 report by Statistics Botswana indicates that more than 50 percent of Batswana live in one- room dwellings, and that of those who are allocated land, some end up selling it as they cannot afford it, or find themselves paying insanely high interests on property purchases.