EDITORIAL

Rent control needed now

Wednesday,  September 21, 2005

While the free market may be considered the best control over competitive pricing in a modern economy, as far as the housing rental market is concerned in the Cayman Islands at present, it is failing miserably.

No one would dispute that landlords have the right to increase their rental rates on an annual basis according to inflation and cost of living issues.

Their right to cover their increased costs is not in dispute.

However, since Hurricane Ivan took its toll on the accommodation stock across the Island many landlords are increasing their rates simply because they can without consideration for their tenants or the impact their action is having on society as a whole.

Stories of long standing good tenants being thrown our on their ears after landlords have doubled rents overnight because of the demand and better offers, are told over and over again by tenants bewildered by what has happened to them.

The recent plea from the Royal Cayman Islands Police Service, (RCIPS) to landlords to lower rents because they are seriously struggling to recruit officers, demonstrates just how serious the matter has become.

Landlords should not be able to arbitrarily increase rental rates by huge percentages simply because someone will be willing to pay whatever rate they come up with.

It is time for a rent control board that will allow for sensible rate rises that meet rising costs, but also that remain affordable.

The current situation is causing several undesirable situations from the makeshift additions to houses that are unsafe and do not have planning permission, to the overcrowding of many apartments and houses.

This country as we have noted on many occasions is dependent on overseas recruits for many of the professions and services here, from ambulance drivers and police officers to nurses and teachers. If these public sector workers whose salaries are notoriously low the world over, cannot come here and at least find relatively affordable accommodation, we will be in serious trouble.

As the high salaries in the offshore financial sector distort the average earnings here, it has always been relatively difficult for workers on lower salaries to find affordable and suitable accommodation, but now it is almost impossible.

While no one would wish to deter investors from purchasing real estate here, because so many property owners who have bought to rent have abused the current situation, it is clear the private sector can no longer be trusted to manage itself in terms of rental rates, so Government now needs to step in and regulate the sector.

With so many properties still unavailable, and demand continuing to be high, the free market will ensure prices continue to rise uncontrollably.

This distortion of true market rates caused by the shortage has to be controlled externally.

If we do not address the issue soon with legislation, we are likely to see the crisis over recruitment and retention in the RCIPS, education and health, as well as other public sector fields and service sectors worsen.

The increase in overcrowded accommodation and makeshift shelters as well as squatting and moreover the appearance of ghettos is something we should be doing everything we can to avoid.

It is sensible fair regulation of the rental market that will be the best weapon in its prevention. 

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