Rent control Europe: Czech Republic

Population: 10,553,443 GDP: $189,982,000,000 Avg. Weekly Earnings: €198.25 Avg. Apartment Price (Per. Sq. M.): €3,384.00 For 120-sq. m. apartment in city centre Avg. Monthly Rent: €475.73

Any analysis of rent control in Europe must take careful note of the example that is the Czech Republic, where an estimated 90% of households lived in rent-controlled housing as of 2006. Since then, the country has begun the slow transition to a market-based system, although this has not been without pitfalls; there is a general consensus in favour of readdressing housing regulation legislation, but this has been met with considerable resistance by the citizens.

The prospect of citizens being responsible for their own housing is a new, and alien idea for Czechs, many of whom believe that the provision and maintenance of housing is the responsibility of the government. What has resulted is a split system: older Czechs live in rent controlled housing governed by the Price Regulation of the Ministry of Finance, whereas new renters, foreigners, and any property built after 1993 exists in the free market, with freely negotiated rental rates.

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Rent control in Europe: Sweden

Population: 9,884,285 GDP: $570,591,000,000 Avg. Weekly Earnings: €842.29 Avg. Apartment Price (Per. Sq. M.): €687.51 Avg. Monthly Rent: €1,252.83

To begin our series profiling the rent control situation in EU countries, we will take a look at the impact of rent control on the private rental market of Sweden, with a focus on the capital city of Stockholm where the city limits are home to 900,000 of Sweden’s 9.9 million citizens. The rental market there is a relevant reflection of the country’s conditions as a whole given the importance of the city to the economy in general.

Sweden has perhaps the most pro-tenant laws in the world, and has been held up as an example for other EU nations investigating rent control legislation. The reasons for the attractiveness of the example are largely because people look at the terms tenants in an existing tenancy face. The issue that arises, however, is that in creating such a tenant-friendly environment, the Swedes have subsequently alienated landlords and generated a dramatic shortage of rental properties, that aspect of their market is rarely raised …

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Higher rent supplement, sometimes you just can’t win.

Raising rent supplement is a tricky solution to a housing shortage for a few reasons. Firstly, if you increase purchasing power where there is scarcity it will likely serve to drive up prices generally.

Think about the following scenario, Joe RentSupplement is trying to rent a home that Jim PrivateRenter also wants, what it boils down to is private renters versus publicly funded renters, and in that mix one now has higher purchasing power.

What is the one simple thing the privately funded renter can now do? Raise their price, this is how they outbid the publicly funded renter, Joe  RentSupplement is still out of a place to call home.

What are the solutions? More public housing – but perhaps not with a ‘for the rest of your life‘ tenancy agreement forming the basis of it. The other thing would be to allow increases for tenancies in situ. This last point cannot be overlooked.

Many of the new homeless come from the private rented sector. This occurs when the prices they are asked to pay are beyond their affordability, far …

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Thankfully there isn’t any Tsunami when you consider hard facts

There has been an ongoing commentary about ‘Tsunami’s’ of repossessions that are occurring right now or just about to and we have been part of what we feel is a more realistic interpretation of the facts.

Yes, people have lost their homes and more will, that is always part of the outcome after a massive financial crisis, one of the largest ever, and in a nation that set records for the size and scope of their financial problems.

To think it could be any other way is the same as expecting a health system where nobody ever dies irrespective of the problems they may have. That kind of belief is not rooted in reality.

We think that the correct response is rapid and fair intervention where warranted, and zero protections where properties are abandoned and no payments are being made.

Within this vista there are those who would have you believe the world is being torn asunder and nobody is doing anything about it.

Here are some of the statistics from the courts covering the first quarter of 2016.

New …

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The Last Word on Today FM talk to Irish Mortgage Brokers

The Last Word hosted by Matt Cooper featured Irish Mortgage Brokers and the Independent’s Paul Melia to discuss issues around social housing and indebtedness.

Paul Melia had researched the outcome of 1,700 social houses that were promised last year and found that none of them had been commenced, this is in our opinion the kind of high quality journalism that leads to greater public accountability.

The radio clip beings with a conversation between Matt and Paul where the issues for non-delivery are covered.

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Time to stop third party meddlers from progress prevention

A common theme in the frustrations of life generally is where you have a third party who can disrupt the intentions of another and in turn remain fairly unaffected themselves. This article appeared in the Sunday Business Post on the 29th of May and was on that topic.

(original below)

A system which allows unfair delays to those trying to deliver housing must be scrapped.

Best known for penning The Prince, a Renaissance-era handbook for unscrupulous politicians, Florentine historian Niccolo Machiavelli advised: “Never attempt to win by force what can be won by deception.”

To that end, if there’s one way to annoy a third-party meddler it’s to identify them. It gets their back up.

The ‘deception’ in this respect is the common acceptance of third-party rights. Unconnected third parties should not (and don’t) have the right to intrude on your private life or private moveable property as long as you aren’t breaking the law. But when it comes to immovable or fixed property, we don’t act the same way. We allow anyone to voice their dissent and disrupt a …

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PRTB deposit scheme? Whatever… Here’s the way around it

It is only due to fairly unsatisfactory outcomes with the PRTB (such as massive delays in hearings, awarding damages that will never be recovered and the fact that they jacked up their prices while also only charging one party to the contract) that the idea of them running any further ‘scheme’ is of concern.

On that basis, and in speaking to landlords, many of them won’t take part, and there’s a simple reason for it, they don’t want to be part of a scheme that creates more administration and reduces the relationship to being further beholden to a third party.

So here’s the way around it: stop taking deposits.

That’s all there is to it, landlords should merely stop taking deposits and when they do there will be nothing to give to the PRTB because the deposit was never received so it cannot be passed on.

What you can do is demand first and last months rent up front. This means you don’t hold a deposit for any damage, but if the damage is significant a deposit won’t cover it …

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Today FM: The Last Word, Karl Deeter & Eoin O’Broin discuss housing

We were pleased to be part of a discussion about housing which featured our own analyst Karl Deeter and Sinn Feins Eoin O’Broin to talk about housing.

Deeter was at pains to point out that tenant protection was enshrined under the idea of ‘dual ownership’ back in the 1870’s and O’Broin said that there were other things to consider, it was a measured and interesting debate.

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