The present Housing Crisis (yes, it is a crisis with a capital letters) needs bold actions to address the plight of the landless. No citizen can truly feel the rewards of independence without being able to state, “there is my home – it belongs to me.”
Let us look at some bold measures that could be enacted to help the Namibian consumer achieve that dream.
Create a National Mortgage Association: The National Mortgage Association should provide banks with state money to finance home mortgages. This would raise levels of home ownership and the availability of affordable housing. The state should also regulate that at least 55 percent of these mortgages be allocated to low- and moderate-income housing.
Rental income should be taxed: In many countries rental income is taxed on a progressive basis and helps to cap the greed of landlords. In Tanzania for example, rental income is taxed at 31.45 percent, which is definitely a barrier to capitalistic tendencies in the market.
Have higher property taxes for homeowners with more than one property: This should also put a dampener on the view that individuals can become rich through renting out properties at exorbitant prices.
The land register should be investigated and all companies should be taxed at a higher rate on residential properties if this is not their place of business. In other words, companies that own property for the purpose of residential leasing should be taxed higher to reduce the undue pressure on house prices.
Introduce a Capital Gains Tax (CGT) that will tax non-residents when they sell a property: This will help to reduce the number of foreign investors who see the ‘Housing Crisis’ as an opportunity to make money through speculation of property. This can also be expanded to include companies owning property to reduce speculation by businesses in the home market. Namibia has the lowest rate of zero percent compared with 25 percent in Botswana and 40 percent in South Africa.
Remove price increasing legislative effects in the housing market: At present too many industries receive “infant protection” and other measures to allow them to increase their selling price without meeting competitiveness in the market. If, on the one hand we argue for a free market economy in housing, why do we introduce statutory false selling prices by giving infant protection to industries such as cement manufacturing? The prices in Namibia for many of the materials used in housing are high because of legislation within Namibia and the Southern African Customs Union (SACU). Creating jobs that do not allow the working population to own property will only continue the history of an indentured labour.
The bottom line issue of the Housing Crisis remains: Without home ownership, citizens would continue to feel like foreigners in their own country.
• Milton Shaanika-Louw is a consumer activist and prolific blogger on consumer protection issues (http://milton-louw.blogspot.com). He serves as the voluntary director at Namibia Consumer Protection Group.