My Radical Reform Proposal to Solve the Housing Crisis: Rent Control, Land Redistribution, and Targeted Subsidies
Moving beyond election-cycle promises: Why we need a Rent Regulatory Authority, a 20% rental tax, and a cap on land ownership
I have always been a proponent of the free market. However, I also believe that when the market fails to provide essential goods and services at a fair price to the common people, it is the state’s duty to intervene. It is a classic case of market failure.
Nowhere is this failure more evident than in the housing crisis within the Greater Malé Region. The current situation is unsustainable. Here are my suggestions for radical, government-led interventions to ease the burden on citizens.
Establishment of a Rent Regulatory Authority & Immediate Rent Freeze
We need an autonomous body dedicated to oversight of the housing market in Malé. This authority would mandate that every rental unit is registered. To immediately stabilize the volatile market, this body should implement a temporary rent freeze (a moratorium on rent increases) for an initial period of 2–3 years. Following this stabilization period, the board would transition to a strict price ceiling mechanism, setting maximum rental prices based on specific criteria such as square footage, condition, and location. All tenancy agreements must be registered here. This body would act as a safeguard for tenants, ensuring compliance and penalizing predatory landlord practices.
A 20% Rental Income Tax
I propose the introduction of a specific 20% tax on rental income. Strict enforcement is non-negotiable; heavy fines must be levied on tax evasion. This revenue should not vanish into the general budget. Instead, it should be hypothecated (earmarked) for a “Housing Relief Fund.” This capital would be reinvested to build social and mid-range housing and to empower a robust public-private real estate model.
Means-Tested Housing Allowance
We need a dedicated portal for a new government welfare initiative: a Housing Allowance. My recommendation is a targeted direct cash subsidy for lower- and mid-income earners who are currently spending more than 40% of their monthly take-home pay on rent.
Based on my initial projections, the government needs to provide this subsidy immediately to approximately 15,000 beneficiaries at an average rate of MVR 5,000 per month. This amounts to an annual expenditure of MVR 75 million. I believe this cost is manageable; we can create the necessary fiscal space within the budget by curbing wasteful recurrent expenditures.
To ensure fiscal responsibility and prevent fraud, eligibility must be strictly means-tested by verifying bank statements and income documents.
Shifting Focus: Rent-to-Own and Mid-Range Housing
The current market is saturated with high-end luxury flats, while the average citizen is left behind. The government must pivot to incentivize business models that increase the supply of mid-range apartments within the next five years, specifically utilizing “rent-to-own” schemes.
This model should feature accessible entry points, such as low down payments capped at 5–10%, with monthly lease payments structured so that a portion (e.g., 15–20%) goes directly toward the principal equity of the home. This acts as a bridge, reducing the intense demand for social housing by empowering the middle class to build asset ownership gradually. I see the recent real estate initiative by BML as a model worth supporting and replicating to some extent.
Privatizing Efficiency: A Public-Private Partnership for Housing
For the above ideas to scale, I propose listing the Fahi Dhiriulhun Corporation (FDC) on the Maldives Stock Exchange. The government should divest, selling 55% of shares to major industry players (e.g., Rainbow, RCC, BML) and other interested parties. By incentivizing private sector efficiency within a state mandate, we can accelerate development. And also governement can consider raising capital to this company by listing in the Singapore and other Stock Exchanges.
Continuous Allocation: The Singapore Model
Housing policy cannot be a five-year election cycle gimmick. We need a continuous, non-stop effort. FDC should introduce a digital portal similar to Singapore’s HDB flat portal. This would be a “one-stop shop” where citizens can apply for social and mid-range housing at any time and track project progress. Allocation should be dynamic (e.g., first-come, first-served or needs-based) as soon as units are completed, rather than the government releasing a massive, politicized “list” once per presidential term.
Restricting Land Ownership and Redistribution
This is the most radical but necessary point. Wealth inequality in our economy is exacerbated by land concentration—specifically, a few individuals, families, and corporates holding vast swathes of land in Malé. We need a thorough land audit. I propose placing a cap on ownership (e.g., a maximum of 3 plots per single entity). Excess land held by monopolistic entities should be acquired or redistributed for public housing needs.
Lower Housing Loan Interest Rates
Using the Sovereign Development Fund (SDF) as a guarantee, the government should push banks to lower housing loan interest rates to 5%. I understand this affects banking profitability, but institutions like BML should not prioritize billions in profit over the national crisis. A moderate profit margin is acceptable if it yields a higher economic impact by making housing affordable.
Fiscal Prioritization
Finally, the government must make hard choices. We should halt non-essential PSIP (Public Sector Investment Program) projects nationwide for a period of 10 years and redirect that capital expenditure exclusively toward resolving the housing issue.
These policies are bold, and they need to be tested. Nothing is possible until we have the courage to implement it. The way we are currently addressing this crisis is disjointed; we cannot simply build a few towers and call it a solution. It requires systemic reform.