A lawmaker from Myanmar’s commercial center Yangon on Wednesday called on the government to take stern measures to bring down soaring property costs in the former capital, where he said rents have shot up multifold in recent years despite an official cap on increases.
Thaung Kyaw, an MP from the ruling Union Solidarity and Development Party (USDP) representing Yankin township in Yangon, warned that a plan to control rental costs by amending the country’s 1960 Rent Law would not go far enough to rein in the runaway market.
He said that lax implementation of the law had led Yangon landlords to raise rents at will in recent years as the city opens its doors to foreign investment and international aid groups—leaving local residents unable to afford the increase—and called for better policing of the rules.
“According to the Rent Law, rent can only increase by a maximum of 25 percent per year. But in practice it has increased by much more on average,” he told RFA’s Myanmar Service.
“The [monthly] rental for an apartment was [around] 50,000 kyat (U.S. $51) two years ago, but now it is 500,000 kyat (U.S. $513).”
Thaung Kyaw said the huge increase was causing many local tenants to spend around 50 percent of their monthly income on rent and others to split their living areas with others to cut down on costs.
“Some people are forced to live in the basements of other people’s homes [to find cheaper rent], while some house owners are building additional structures on their property,” he said.
“There are also fewer students in schools in Yankin township because many families have been forced to move out to suburban areas [because of the city costs].”
Real estate experts echoed the MP’s concerns, telling RFA that hardly anyone in Yangon adheres to the 25 percent cap on rent increases, which they said was meant to be applied to both residential and commercial properties.
Instead, they said, rent has been increasing in line with market demands. One expert said that “every six months, rents are doubled across the board.”
Housing expert Than Oo said that before 2010, residential rents in Yangon increased by a maximum of 10 percent at either six-month or yearly intervals. From 2010 to 2012, rents had regularly increased by around 20-25 percent.
But beginning in 2013, rents were often raised by 40 percent—a figure that some observers consider to be conservative.
RFA has observed rent increases of more than 100 percent in Yangon, as well as in some remote areas outside the city where industrial zones and new towns have been planned.
Lawmaker Thaung Kyaw has put forth a proposal to the regional parliament urging the government to find a solution to surging rental prices.
He said landlords have been ignoring existing legislation, calling for government subsidized construction of low-cost housing.
“Only amending the law won’t work—the rental prices will only come down if people operate according to the amended law,” he told RFA.
“It would be better if the government could arrange to build lower priced housing. It is part of its responsibility to do so.”
Thaung Kyaw said that his proposal at Yangon Parliament had been met with support from other regional MPs, including Nyo Nyo Thin from the Democratic Party (Myanmar) and San San Myint from the New National Democracy Party.
He said Tin Win, the minister of Yangon region border affairs, told the session that the government would “try to amend” the Rent Law after discussing the proposal with legal experts, and that he and other MPs had accepted the decision.
He noted that another proposal to amend the Rent Law had been made at Myanmar’s Union Parliament, and that parliament speaker Shwe Mann had added the law to a list of legislation that should be amended.
There has been a shortage of apartments and office space in Yangon amid an influx of foreign investors and other groups since President Thein Sein launched reforms in 2011 after decades of harsh military rule.
Reported by Wai Mar Tun for RFA’s Myanmar Service. Translated by Khet Mar. Written in English by Joshua Lipes.