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 an academic and educational initiative aiming to promote pluralism and multidisciplinarity in economics learning. Furthermore, CME aims to promote a better understanding of the driving forces of the market process, in order to realize the unintended consequences involved in policy making.