NHC rent arrears: A historical note

The question of rent arears on NHC properties has a long history. When I was researching the development of the City of Dar es Salaam, for my Phd thesis, I found myself delving into the creation and performance of the NHC, since this had a huge impacts on the evolution of the land use structure of Dar es Salaam, especially in the early years.

Several issues hit my mind. Among these were the questions of low rents and rent arrears. Thus, while the Corporation has been tasked with designing approaches that will reduce rent arrears, it may want to look into history and appreciate that this is not a new problem, but it has dogged the Corporation’s performance since its early days. In the rest of this article we look at the issue of rent arrears, till the 1990s.

It will be recalled that in the 1960s, the NHC was involved in a slum clearance exercise in areas of Magomeni, Kinondoni, Mwananyamala, Ilala, and Temeke in Dar es Salaam, whereby Swahili houses, constructed of mud, poles and thatch were demolished, reconstructed using modern building materials, and were given back to the owners, who were expected to use some of the rooms, and rent out others so as to repay cost of rebuilding these houses to the NHC.

Arrears on the slum clearance scheme stood at Sh2.15 million as of 30/6/1970, the NHC pointing out that, it had become: “a baffling problem for us to collect these arrears. As the matter involves some socio-political problems, we have brought the problem to the notice of higher authorities and sought their help in its solution”.

Many landlords (i.e. beneficiaries of the slum clearance scheme) soon fell into arrears presumably because they consumed all the money they got as rent. Up to the 1990s, many beneficiaries of the slum clearance scheme still owed the NHC, although all should have cleared their loans during the 1980s. According to NHC officials, however, such arrears are so low in value that they are not worthy following up. Worse still, even the collection of rents from its own estate-managed houses, had become a major problem. In 1968/69 the NHC started complaining of large rent arrears.

In 1970, total arrears stood at Sh5.86 million. Despite the NHC's issuing prompt demand notes and opening their offices late at month ends, rent arrears continued to grow.

The NHC tried to work through the ruling party (TANU)'s branches to explain the importance of rent payments but: "it is unfortunate that these discussions were endless and did not bear any fruits". In 1971/72, arrears stood at Sh7.26 millio. The NHC was complaining of political interference and was appealing to top National Leaders and Members of Parliament to find a solution.

Major rent defaulters included Government Ministries, Parastatal Organisations and the Ruling Party, making NHC's financial position most precarious. As of December 1977, public bodies owed the NHC, 90 percent of rent arrears.

The question of rent arrears went hand in hand with low rents charged on NHC properties, given the existence of Rent Control legislation which gave tenants water tight security and was used by sitting tenants to resist any attempts to raise rents or evict defaulters. Given the low rents, the NHC found it difficult to maintain its properties, which in turn strengthened the case against upwards rent reviews.

While, in the past, the question of rent arrears was highly politically charged, the situation is different now. We now see the Parliamentary Committee encouraging NHC to deal with rent arrears. This is a positive development.

Continuous dialogue with tenants (including public education), property maintenance, debt restructuring, and preventing the accumulation of rent arrears can go a long way to encourage rent payment compliance.

Nevertheless, despite the fact that forced eviction of a tenant was the last wish for any landlord, it may have to be resorted to in the case of recalcitrant defaulters.