Minister says social housing rents set without guidelines
Muththalib said he was not in office when the earlier rates were determined and could not specify the method used.
Minister of Housing, Land and Urban Development Dr Abdulla Muththalib on Wednesday said rents for social housing units were set without guidelines in connection with presidential elections.
He made the statement during a parliamentary sitting in response to questions raised by Member of Parliament for Galolhu North Mohamed Ibrahim.
The current administration has revised rents for 4,000 housing units developed in Hulhumalé Phase 2. Under the previous arrangement, rents were set at MVR 6,000 for two-bedroom apartments and MVR 8,000 for three-bedroom apartments, including maintenance fees.
Under the current tenancy agreements, the rates have been set at MVR 7,000 for two-bedroom apartments and MVR 10,000 for three-bedroom apartments.
Responding to questions on the increase, Muththalib said he was not in office when the earlier rates were determined and could not specify the method used.
He referred to changes in rent for Hiyaa flats. “In 2018, based on the cost of the 7,000 housing units and other expenditures, the government at the time announced a monthly rent of MVR 5,300,” he said.
He said the subsequent administration set the rent at MVR 7,500, with a maintenance fee of MVR 1,000, bringing the total monthly payment to MVR 8,500 for a 570 square foot apartment.
Muththalib said the earlier decision to set rent at MVR 5,000 without guidelines was not based on calculations. He said current rents are set based on loan repayment requirements, with payments directed to an escrow account.
“The funds collected must be sufficient to repay the loans. Therefore, the current prices were determined based on structured calculations within that framework,” he said.
The minister did not respond to a question on why the tenancy agreements do not allow residents to register as permanent residents.
The Malé City Council has informed residents of the Gedhoruveriya flats that tenancy agreements do not permit registration of permanent residency for occupants or their families.
Fahi Union, representing residents of the 4,000 flats, has called for the agreements to be converted to sale agreements to address the issue.
The government has also reduced rents for Hiyaa flats in recent years. In December 2023, MVR 100,000 was deducted from the total price of units, with the remaining amount to be offset through a reduced monthly rent of MVR 3,984.21 over seven years.
The Housing Development Corporation (HDC) later announced a further rent waiver for two years, linked to the implementation of a presidential pledge.
