Rent control and residential rental housing investment: A Case study of Meru town

Abstract

This dissertation begins by pointing out that rent control has to be seen in the context of housing problems especially for the urban poor. Faced by a mass of poor families, most governments adopt rent control policies as a measure to protect tenants~ exploitation by landlords when there is undue housing shortage. ~. The effects of rent control o~'the housing market have been seen to vary depending on the nature of the rent control regime. Weak controls clause relatively minor distortions in the housing rparket. This study mainly focuses on the influence of rent control on investment decisions, rental property values and the quality of housing in Meru town which is a rural town in Kenya. It-has been shown that rent control has, had minimal influence on investors' decisions and rental property values. It has however adversely affected the quality of controlled dwelling units. (7 P-ublic awareness on the existence of rent control legisla-tion has been~ seen as a major reason for .the-minim-al -influe-nce of rent con-tro-l. The enforcement ofrent control by the rent tribunal has been very weak such that market forces seem to have suppressed rent control. \. Arising from this, the study suggests the .ways in which the effectiveness of rent control may be widened. It also recommends measures that can address the general housing problem. The provisions of rent control legislation must take account of the prevailing social economic conditions. The enforcement of the Rent Restriction Act should also be efficient if rent control is to achieve its objectives. The go.verriment response to high rents should,.. however be to attack the cause of high rents rather than rents themselves. Housing problem is essentially ~economic problem and not a legal problem and as such, legal solutions can only, be a complementafy to act alongside the economic solutions.. t • v