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Housing solutions

adding new homes to the rent control system may bring joy to tenants hoping to find affordable homes.

But it is poor policy which will do little to alleviate the Island's housing problems in the long run.

One year after it was rejected by the Senate, Housing Minister Nelson Bascome tabled the Rent Increases (Domestic Premises) Control Amendment Act, which would widen the range of homes eligible for rent control and remove the moratorium on homes built after 1983 being placed under rent control.

Under the Constitution, the Senate cannot reject legislation if it has been sent back to the House of Assembly and is returned unchanged to the Senate one year later.

So it has to be assumed that the bill will now become law sometime after Cup Match.

On the surface, rent control appears to be an easy solution to the shortage of affordable housing on the Island.

By fixing prices at affordable levels, it prevents landlords from gouging tenants with high rents.

But in the long run, it acts as a disincentive to landlords to either build more homes or to maintain those they already own. That means it does nothing to increase supply, except at the top end of the market, and that is not where the problem is.

Indeed, it may decrease the supply of family homes and small apartments, because landlords cannot be compelled to rent their homes and may choose to withdraw them from the market if they do not feel they can get an adequate return on their investment.

Mr. Bascome has already stated that there are landlords who choose not to rent their properties if they cannot get the rents they are seeking; rent control could exacerbate that problem, not improve it.

But Mr. Bascome has pointed out that there are houses available for purchase.

He criticised consumers who go for style -- the expensive and flashy car -- instead of substance -- the home which costs more but appreciates in value over the years unlike cars which depreciate in value from the minute they leave the showroom.

Rent control will not solve that problem.

Instead, the market will have to solve it, in part through building new homes.

Former Premier Sir John Swan's plans to build apartments on Victoria Street are the kind of solution that is needed because it fills a gap and, by building in Hamilton, ensures that no more open space is lost.

It is that kind of innovative thinking that is needed; not the recycling of programmes like rent control which have been tried and have failed before.