CME WELCOMES THE SHIFT TO RENT SOLUTIONS FOR THE HOUSING POLICY
Thursday, 6 August 2020: Housing and local government minister Zuraida Kamaruddin has announced that the new housing policy will shift toward renting solutions.
The Center for Market Education (CME), led by Dr Carmelo Ferlito, welcomes such a shift, inviting the government to a wider reflection on the potential measures and their consequences, intended and unintended.
Dr Carmelo Ferlito, CEO of CME, invites the minister to reconsider the possibility of some sort of rent control, which may produce negative outcomes such as limiting supply, lowering maintenance conditions and stimulating the black market.
On the other hand, Dr Ferlito welcomes the idea that government is going to develop affordable housing to be rented rather than for sales, but he suggests also to push further in this direction with a system of rent support: rather than having the government building specific houses for rent, it would be interesting to explore the possibility of a dialogue with developers in order to have rent-subsidized units within their projects. This solution, being market-driven, would have the advantage of more easily meeting customers’ expectations and to promote social mobility.
Finally, CME invites the ministry to work together for the development of a new affordability index, able to capture not only financial affordability but also social desirability and social mobility potential.
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About CME: The Center for Market Education (CME) is a boutique think-tank based in Kuala Lumpur, Malaysia. As an academic and educational institution, CME aims to promote a more pluralistic and multidisciplinary approach to economics and to spread the knowledge of a sounder economics, grounded in the understanding of market forces. In order to do so, CME is not only involved in academic initiatives, but it organizes seminars, webinars and tailor-made economics classes for students, journalists, businesspeople and professionals who wish to better understand the relevance of economics for their daily lives and activities. Economics matters and needs to be presented in a fashion in which the link with reality is clearly visible. In this sense, we look not only at theoretical economics but also at policy making, with an emphasis on the unintended consequences generated by political actions.