Landlord-tenant relations essential to thriving rental real estate sector

News that Tanzania’s largest landlord, the National Housing Corporation (NHC), together with a number of joint partners, was embarking on an ambitious investment programme to put up modern properties, replacing the aged ones in the lucrative central area of Kariakoo, made front page news in key public media recently. In preparation of this process, the director general of the NHC was pictured with representatives of tenants in this area, who will be affected by the project. The aim of the meeting was to allay fears of the tenants that they will be displaced, by this project, but also to seek their cooperation, so that wrangles that face such projects, which sometimes result into costly delays and even frustration of the projects, are avoided.

The DG assured current tenants, who will be required to give way during the implementation of this project, that they be back in their properties. The tenants, who have their Committee, akin to a Tenant Association, promised maximum cooperation.

This is a good example of landlord-tenant relationships. If Tanzania had a National Housing Policy, the rental housing sector would appear prominently since the majority or urban dwellers are tenants.

For the City of Dar es Salaam for example, aged data gives the proportion of tenants to be 57 percent. The National Bureau of Statistics is yet to release the latest data, after undertaking the Population and Housing Census in 2022.

The proportion of households living as tenants is likely to be higher. It is certainly higher in the Kenya capital, Nairobi, where over 90 percent of the urban residents are tenants. The corresponding data for Kampala is 70 percent of the city residents being tenants.

In their paper published in 2021 and titled: “Making Room for Renters: Understanding and Supporting Rental Markets in the Global South – Evidence from Dar es Salaam, Tanzania”, researchers Alexandra Panman, Lecturer in Urban Economics and Public Policy, University College London, and Nancy Lozano Gracia, Senior Economist, World Bank, lament the invisibility of the rental housing sector in urban Tanzania.

Their paper aimed at adding to the literature on rental markets with insight from a new data set that provides unprecedented level of detail on the rental market in a case study city: Dar es Salaam, Tanzania. They point out that like many cities in the region, renting has long been thought to play an important role in urban housing strategies in Dar es Salaam, and yet rental housing remains ‘invisible’ in policy terms as it is unregulated and largely ignored in official policy.

This invisibility means that the interests of the investors in rental housing, who are in most cases small-scale landlords, but who are sometimes large landlords, like the NHC, as well as consumers of rental housing, that is the tenants, remain marginally addressed by public policy.

Occasional political statements seem to aim at restricting the actions that landlords can take, with their clients, the tenants; but, for a vibrant rental sector you need a national policy framework which ensures fair play, between landlords and tenants.

Such fair play would mean that landlords do not overcharge their tenants, or do not evict them at the least possible excuse; that they let tenants to enjoy their rented properties, within legal limits; and that they maintain their leased properties.

For their part, the tenants are expected to pay their rent on time, not making their landlords unwilling lenders, whenever tenants think they have a problem; not to misuse or illegally sublet the rented premises; not to be a nuisance to other residents; and to vacate the properties when they no longer want to rent, or are no longer able to afford a particular property.

A National Housing Policy would aim at encouraging cordial relationships between landlords and tenants; eschewing the long-held view that landlords, are bad people; and, Shylocks, at that. This should mean creating conditions that are conducive for the development of the sector, to create a win-win situation for both investors, the landlords, and consumers, the tenants.

The Policy would encourage the formation of Tenant Associations, as well as Landlord Associations, whose major focus would be negotiations between the two parties to ensure that each fulfils its duties. The Committee of Kariakoo Tenants referred to above, is a good example of how landlords and tenants can come together to support further development of the rental sector.

There used to be an active Tenant Association in the country in the late 1980s early 1990s. Sadly, it major achievement was to frustrate every effort made by the NHC to put up rents, even where they were ridiculously low; or, to evict long-term, recalcitrant defaulters; even where the latter had their own properties. The result was that literally, NHC properties fell into decay.

Without adequate rent, leased properties cannot be maintained. The situation improved when the law stopped giving tenants water-tight security.

The action of the NHC sitting together with its Kariakoo tenants to explain to them what the development project is all about and what their rights and responsibilities were, is highly commendable. Rapport between landlords and tenants is important for the development of a vibrant rental real estate sector in the Country.