MDP against rent control, in favor of increasing housing

Speaker of Parliament, former President Mohamed Nasheed has warned that imposing rent control in Male’ City could have a detrimental effect on the local economy.

Nasheed, the leader of ruling MDP, made the comment in an appearance on the Ask Speaker program, a collaboration between the Parliament and Public Service Media (PSM), last Saturday.

Housing shortage is one of the key issues facing the congested capital, Male’ City. Many of the questions submitted by the public on Saturday had been directed towards MDP’s policies regarding remedying the issue.

One person asked Nasheed if MDP planned on drafting legislature on rent control given the expensiveness of apartments in Male’ City.

In response to the question, Nasheed noted that MDP was a center right party and favored free market policies over interfering in price mechanisms and markets.

He said that rent prices depended on demand and supply. He said that the reason for the skyrocketing rent prices in Male’ City was due to the excess in demand over the actual supply of apartments available for rent.

He said that rent control was not the solution, and that the better solution was to increase the supply of apartments to meet the demand, or reduce the demand and allow rent prices to fall, without imposing any controls.

“Like I said, rent prices can be reduced by increasing the supply or reducing the demand,” said Nasheed.

He warned that rent control would have a detrimental effect on the economy and resultant effects on the daily life of citizens.

He said that history showed all countries which had imposed rent control to have suffered economic repercussions.

“If rent control is imposed, it will lead to irregular activities popping up elsewhere in the economy. It will therefore result in a huge loss to the economy, and a huge adverse effect on daily life. We haven’t seen any nation which has attempted to control rent or other such things have their economies run properly,” said Nasheed.

The government has announced plans to build an additional 20,000 housing units by 2023. However, Nasheed opinioned that the number is insufficient to meet the housing need in the Male’ City and its suburbs.

Responding to another question, Nasheed said that he was in favor of providing social housing to singles as well as married couples.

He stressed that each citizen should have the freedom to choose the island from which they want housing as long as it’s in line within the laws and regulations.