June 14, 2016

Why Repealing the Maharashtra Rent Control Act is Good Politics

Senior Associate Vaidehi Tandel, in this First Post article argues that "In January this year, the Maharashtra government announced a proposal to amend the Rent Control Act that would free residential properties above 847 square feet and commercial properties above 540 square feet from protection under rent control. This move came under heavy criticism from leaders belonging to opposition parties and tenants who would have been affected. The government blinked and the proposal was withdrawn. What has been a victory for tenants and those in the opposition has come as a blow for the poor in Mumbai...

 

Contrary to popular belief, rent control has been anti-poor rather than pro-poor. The Maharashtra Rent Control Act is draconian in nature. It is one of key reasons why investment in new rental housing in Mumbai has all but disappeared and why several existing properties enjoying protection are dilapidated...

 

Reviving rental housing therefore needs drastic changes to the existing rent control regime to make it more responsive to the market while continuing to protect tenants against unfair rent increases and evictions. International experience supports this. Cities like New York and Zurich, which have a more relaxed form of rent control have a flourishing rental market. Attracting investment in new rental housing will require assuring that all new construction will be exempt from rent control for all time to come. Low-income households who wish to rent could be supported through housing vouchers that subsidise rents..."

 

Read the full article here.

Topic : Transitions / In : OP-EDS
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