Benefits (and Losses) From Rent Control in the Philippines: An Empirical Study of Metro Manila

Source: RePEc


This study examines benefits of rent control law in Metro Manila. The results show that rent control benefits are conditional to occupying a rent-controlled unit and on tenure. The benefits of rent control are found positive. Many poor and low-income households are benefited but the distributional effects are minimal since nonpoor families have equal access to rent-controlled units. Evidence of losses or income transfers from landlords to tenants is not substantiated. The most probable income transfers are those from short-stayers to long-stayers. Rent control is a poor mechanism for income transfer. However, the rental housing market tend to be monopolistic and rent control maybe necessary to prevent economic eviction and abuses on payment of key monies. In this case, government has to provide better monitoring mechanism and ensure enforcement of lease contracts.

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    • "Different stages of the lifecycle can generate different sets of residential needs. For instance, married-headed households where household head is at least 50 years old and household size of three or greater tend toward ownership (Ballesteros 2002). "
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    ABSTRACT: The objective of this paper is to examine the rental housing market in the Philippines and provide possible policy options for a viable rental scheme for low income households. Rental housing is now seen as a vital component in accommodating large number of families in developing countries. In the Philippines, specifically Metro Manila, the increase in urban population through both migration and natural increase, has been absorbed to a large extent by the rental market. There is thus a need for the government to reexamine its policy on rental housing. In particular, it has to review problematic issues in the rental market such as: (1) affordability and rent control measures; (2) quality of rental housing stock; (3) legal and ejectment issues; and (4) management of public rental housing. The existing rent control law is unable to protect the low income households since most low income renters dwell in self-help rental accommodations, where informal, verbal contracts are not uncommon. Affordability and quality issues can only be addressed by policies that will encourage small scale landlords to provide more and better low cost rental accommodation. Instead of a rent control the paper suggests the following schemes: (1) building rental incentives into upgrading programs; (2) provide micro credit for small scale landlords; (3) create appropriate planning and rental regulations in informal settlements; and (4) direct government subsidies to public rental housing for the urban poor to be undertaken as a joint venture with the local government.
    Preview · Article · Feb 2004
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    ABSTRACT: The paper investigates the characteristics of house price dynamics and the role of institutional features in nine Asia-Pacific economies. On average, house prices tend to be more volatile in markets with lower supply elasticity and more flexible business environment. At the national level, the current run-up in house prices mainly reflects adjustment to improved fundamentals rather than speculative housing bubbles. It, however, does not preclude the existence of bubbles in some market segments.
    Preview · Article · Jan 2008