Labour leaders are optimistic about a bipartisan plan to introduce a new rent-control law aimed at protecting garment workers from the longstanding problem of housing price hikes.
The law will regulate rental prices, which have been undergoing drastic surges since the garment sector’s monthly minimum wage was raised to $128 in November, the prime minister told students at a graduation ceremony at the Royal University of Law and Economics yesterday.
“I and Sam Rainsy shared an idea and agreed about the need to draft a law to protect the interest of the renters, for rental house owners to share responsibilities, and also to not allow the homeowners to increase rent prices in accordance to their own decisions,” Hun Sen said, referring to an agreement with the opposition Cambodia National Rescue Party president.
A CNRP spokesman confirmed the party’s involvement.
The impending plan will also apply to impoverished students, he added, though little detail on carrying it out was provided, or on how price caps affecting hundreds of thousands of workers’ housing might impact the economy.
If the law comes to fruition, labour union officials said it will be a positive step on the government and opposition’s part to help garment workers reach a living wage.
“We’ve been raising this issue for the past 18 months . . . because when wages go up by $5 to $10, you will see rents around factories and other costs go up by around the same amount,” said Solidarity Center country director Dave Welsh. “So it’s absolutely crucial to attack pricing pressures to get them to a living wage – which is not the case right now.”
According to the Coalition of Cambodia Apparel Workers’ Democratic Union president Ath Thorn, most workers are paying $20 to $50 for substandard rooms shared between three to five people, while those living in urban areas like Phnom Penh are sometimes forced to shell out up to $100 monthly.
Most homeowners have set annual rent increases, but Thorn added that it’s possible that some might have even imposed an additional rent hike this month, which is when garment workers start receiving paychecks with the new minimum wage that took effect in January.
“The house owners increase the room prices every year, but the rooms are impossible to live in,” Thorn said. “They are so small, dark and with no proper ventilation.”
Hun Sen has requested that opposition leader Rainsy and Minister of Interior Sar Kheng create a working group and draft the currently unnamed law. CNRP spokesman Yim Sovann said the party is already preparing a team to commence talks with the ruling CPP.
So far, there are no further details on what the new law entails, but Thorn said he hopes it will include monthly rent caps of $20-$30, ample punishment for homeowners who break the law, and set standards on better living conditions for workers.
“We support this draft law, but we hope that it doesn’t just stop on controlling rent, because there’s more change that needs to be done for workers . . . like increasing the size of rooms and bettering the environment of the places they live in,” he said.
Welsh said that, ideally, full rent subsidies are needed, “but dramatic rent control is important to decrease workers’ major expenditures on a daily basis”.
Others, however, pointed out that while the move would no doubt benefit garment workers, the government had additional stakeholders to consider.
“If the rent control is not very well managed, it could harm landlords and affect property prices,” Nguon Chhayleang, CEO of Century 21 Regent Realty, said yesterday, arguing for a careful study of the scheme’s potential ripple effects before making a final decision.
This latest development comes almost a month after state energy provider Electricite du Cambodge (EdC), following a directive from Hun Sen, announced that it will grant energy discounts to garment workers in Phnom Penh, reducing prices to 610 riels ($0.15) per kilowatt for power consumed under 50 kilowatts a month. From January 29 to February 8, EdC has installed 8,148 new electrical connections in three districts heavily populated by garment workers – Russey Keo, Meanchey and Dangkor, according to a statement released on Monday.
The prime minister said that EdC is targeting 90,000 rental rooms in total.
Apart from the anticipated rent control law, Hun Sen also ordered other senior officials yesterday to examine the possibility of establishing independent water connections to each garment workers’ rented space and charging them directly for water supply in accordance with state prices.
“But before the law comes out, I would like to appeal to homeowners to not increase prices for the garment workers or poor students who are renting their houses,” Hun Sen said.