The Independent Uganda: You get the Truth we Pay the Price
“Low rent could lead to increase in business activities, competitiveness and economies of scale and high profitability,” he told The Independent in a phone interview.
“What investors need to do is to look for long term sources of funding than looking for short term loans for long term investments that are charging high rent on tenants,” he said.
However, Fred Muhumuza, another economist and researcher says controlling rent could reduce supply of rental property on the market.
“The proposed law will simply ‘kill’ the real estate industry,” he said, adding, “People have invested in these properties using dollar denominated loans and you cannot expect them to charge tenants in shillings that is consistently weakening and thus make them make losses.”
He said in case the proposal becomes a law, then, no landlord will give tenants contracts of more than three months to ensure that the rent matches up with the cost of foreign currencies.
Will the proposed measures work?
He, however, said the government will fail in executing the proposed law, if at all, it becomes law or will make the property market very turbulent as investors shun the industry.
Hamis Kiggundu, the proprietor of Ham Shopping Centre at Nakivubo, told Daily Monitor that “It is not possible for that Bill to be implemented.”
“We don’t even need to discuss this because the determinant factor for rent is automatic from the prevailing circumstances,” he said.
Going forward, Rugasira said there is need to separate the proposed bill from that meant to regulate residential and commercial properties.
“Best practice and empirical evidence from other countries have shown that commercial and residential uses are legislated under separate Acts since residential and commercial Tenants and Landlords have different requirements which cannot be addressed within the same law,” she said, citing neighbouring Kenya that has Rent Restriction Act for residential housing, and Landlord and Tenant Act for commercial premises.
She added that there’s urgent need for regulation of the property market downtown, because “this is where the malpractice and unethical conduct of landlords and tenants is rife.”
Ironically, she said, the “uptown properties” which are paying rent in US dollars, and have clear and detailed lease agreements are not experiencing such issues because there is binding regulation and mutual respect between the landlords and tenants.
Mukembo says there is need for the government to consider the recommendations of the experts in the industry such as the Association of Real Estate Agents of Uganda (AREA-U) and landlords, in order to arrive at a balanced Bill that is consistent with international best practice.
Do these cabinet ministers own any properties in this country? Why would they seem to only favour the tenants as if landlords are not supposed to benefit from their sweat. There is really nothing much one can do if they cannot build their own houses. Once not happy with one landlord move on to the next with hope of forging relationship. Otherwise as the bill is it will deter people from construction residential and commercial properties for fear of marginalisation hence keep the housing deficit as high as 8m as it stands now.