TodayFM: The last word on rent control/certainty

The cleansed expression ‘rent certainty’ is the same as ‘rent control’ irrespective of what anybody says to distance themselves from the two being the same.

There are different types (or generations) of rent control, but that doesn’t make rent certainty ‘not like’ any of them, what is often described as ‘rent certainty’ is in fact more commonly known as third generation rent control which in a nutshell is ‘price control mechanisms intralease’ or ‘within’ the lease.

This debate is an interesting one and we were very pleased to take part. This piece aired on the 28th of June 2016.

Comments

  1. TD

    Just listened to this discussion.

    Fixed price contracting could work very well. But it is essential that the price is reset to market rate at the end of the contract’s term. Contract terms should also be fairly short (3-4 years maximum).

    Fixed price contracting would work like this: At the beginning of the lease, the tenant and landlord would sign a contract for four years. ALL the rent increases during that time would be specified in that contract, either as rises in EUR or linked to some form of index. This means no surprises and no government price setting.

    I’m not entirely clear how local government is funded but taxes should be based on land values to encourage development.

  2. TD

    There is some research on this, but the key thing is that:

    1. The contract term must be short (3-4 years) and not indefinite
    2. The price must be reset to market rent at the end of the contract, without exception. Failure to do this will result in mass housing queues.

    Tenancy rent control by Richard Arnott
    SWEDISH ECONOMIC POLICY REVIEW 10 (2003) 89-121
    http://www.government.se/contentassets/6e57e1d818bb4b289ac512bb7d307fa5/richard-arnott-tenancy-rent-control

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