Private Rental Housing in Transition Countries (eBook)

József Hegedüs holds a PhD in Sociology and an MA in Economics. He is founding member and managing director of Metropolitan Research Institute, Hungary and he is co-editor of four comparative volumes on housing policy issues – emerging new housing systems, housing privatization, social housing, and housing finance – in post-socialist countries.Martin Lux holds PhD degrees in sociology and economy and is head of the Department of Socio-Economics of Housing at Institute of Sociology, Czech Academy of Sciences. His efforts have been supported by the Czech Science Foundation, Erhard Busek Price and others. He is editor-in-chief of Critical Housing Analysis.Vera Horváth has been working at Metropolitan Research Institute since 2012, and is currently pursuing doctoral studies in sociology. She published papers on housing policy and rental housing in Europe.

Preface and Acknowledgements 5
Contents 9
List of Figures 12
List of Tables 14
Part I: Private Renting in Transition Countries: Historical Perspectives and Structural Changes 16
1: The Private Rental Sector in  Western Europe 17
Introduction 17
Tenure Types and Landlord Types 19
Tenure Types 19
Landlord Types 21
The Historical Development of the Private Rental Sector in Western Europe2 24
Industrialisation, Urbanisation, and Liberal Capitalism 26
Expansion of the Welfare State 27
Market-Enabling Policies: Privatisation and Deregulation 30
Revisited Market Control: Towards Smart Regulation 33
Rent Regulation and the Subsidisation of Private Renting 34
Rent Control 34
Regulating the Conditions of Tenancy and  Landlord-­Tenant Relations 37
Tax and Subsidy Regimes 39
The State of Private Renting in Europe 41
A Future for Private Renting 43
Notes 46
References 47
2: The Private Rental Sector Under Socialism 55
Introduction: The Ideology and Practice of Private Renting Under Socialism 55
Private Renting and Socialist Housing Theory 57
Equal Redistribution of the Housing Stock 58
The Difference Between Private and Personal Property: Housing Classes 59
The State and the Market—Housing Provision 60
The Urban-Rural Divide 61
Varieties of the East European Housing Model and the Role of Private Rentals 62
Informal Private Renting: A Compromise in the Socialist Housing Model 68
Redistribution of the Housing Stock in the Early Years of Communism 69
The Forced Private Rental Sector 70
Subletting Public and Privately Owned Rental Housing 73
Conclusion 78
Notes 79
References 80
3: Property Restitution After 1990 84
Introduction 84
An Overview of Restitution Approaches—In Kind or Financial Compensation? 85
Case Studies of In Kind Property Restitution 88
Czech Republic and Slovakia 89
Estonia 92
Former Yugoslav Republics 95
Poland 98
The Impact of Restitution on Private Renting 100
Case Studies of PRS Development 102
Conclusion 105
Notes 106
References 107
4: The Policy Environment of Private Renting After 1990 109
Introduction: Super Home-ownership in the New EU Member States 109
The Financial Disadvantages of Private Renting 111
Modelling ‘Asking Rent’ and ‘Demand Rent’ 112
The Role of Expectations 114
Regulation, Legal Disputes, and the Main Risks in Practice 117
Entering into a Contract: Preliminary Checks and Deposit 119
Tax Evasion and Registration of Contract 119
Determining Rent Levels and Rent Increases 121
The Duration, Extension, and Termination of a Contract 122
Dispute Resolution 123
Conclusion: Tenure Choice, Risks, and Volatility in Private Renting 125
Notes 128
References 129
5: Poor and Vulnerable Households in Private Renting 132
Introduction 132
The Social Structure of Market Rental Tenants 134
Social and Spatial Segregation in Post-socialist Countries 136
The PRS and Selected Vulnerable Groups 139
Conclusion 144
Notes 153
References 156
Part II: Country Case Studies: History, Current Status, and Future Prospects 158
6: Croatia: Towards Formalisation 159
Introduction 159
Socialist Legacy 160
Private Renting After 1990 163
The Period of Turbulent Changes (1990–1995) 163
The Period of Stabilisation (1996–2000) 164
The Period of Prosperity (2001–2007) 165
The Period of Economic Crisis (2008–2015) 168
Future Prospects of the Private Rental Sector 173
Notes 174
References 175
7: Czech Republic: Growth and Professionalisation 177
Introduction 177
A Short Historical Sketch 179
Main Milestones on the Path of Private Renting Growth After 1990 180
Milestone 1: The Restitution of Residential Properties (1990–1993) 180
Milestone 2: The Residualisation of Municipal Housing (1990 Onwards) 181
Milestone 3: Rent Deregulation (2007–2012) 182
Milestone 4: The Introduction of Generous Housing Allowances and Tax Subsidies 186
Milestone 5: The Rise of Institutional Investors and Increasing Legality 187
A Snapshot Analysis of the Status of the PRS Today 188
Future Prospects of the PRS 194
Private Renting Used to Meet Social Goals 196
Conclusion 196
Notes 197
References 197
8: East Germany: Integration to a Well-Established Environment 199
Introduction 199
The Housing System in East Germany Before 1990 200
The Role of the Private Rented Sector in a Centralised Economy 200
New Housing Construction During Socialism 202
From Housing Shortage to Housing Oversupply (1990 Until Today) 205
The Reorganisation of Property Rights 209
Housing Subsidies 210
Rent and Tenure Security Deregulation 212
East German Private Landlords 215
Conclusion 217
Notes 217
References 218
9: Estonia: Prospects for Steady Improvement 221
Introduction 221
The Legacy of the Soviet Era 222
Private Renting After 1990: Milestones in Private Renting 224
Transition: The Call for Radical Reforms 224
From 2000 to the Present Day: Gradual Growth, Persisting Informality 229
Private Renting in the Present Day: Policy, Preferences, and Perception 232
Conclusion: Gradual Growth, Room for Quality Improvement 238
Notes 239
References 240
10: Hungary: The Growing Role of a Hidden Sector 244
Introduction 244
A Dubious Legacy: Private Renting During Socialism 247
Sector Dynamics from 1990 to 2015 248
Transitional Recession 250
Pre-crisis Period: Upturn and Expansion 252
Post-crisis Years: A Shift in Tenures 254
Private Renting in the Present Day: Hiding in Plain Sight 257
Supply-Side Actors 257
Demand-Side Actors 259
The Main Risks and Risk-Management Methods 262
The Future Prospects of the PRS 264
Notes 266
References 267
11: Poland: Gradual Growth Across Barriers 270
Introduction 270
The Socialist Legacy: Rent Regulation and Informal Private Renting 272
The Dynamics of the PRS After 1989 274
Policy Environment and Social Acceptance 276
The Evolution of Rent Regulation 278
Eviction and the Incidental Lease 283
Snapshot Analysis: Private Renting in the Present Day 284
The Size of the Private Rental Market 284
Economic Conditions 288
Future Prospects: On the Road to Professionalisation 290
Notes 292
References 293
12: Russia: A Long Road to Institutionalisation 296
Introduction 296
Private Rental Sector in the Soviet Period 297
The Dynamics of the PRS in 1991–2015 298
Legislative Reforms in a Sluggish Policy Environment (1991–2004) 299
The PRS Outside the Framework of National Housing Policy (2005–2011) 300
The Search for the Right Models (2012 to the Present Day) 303
A ‘Snapshot’ Analysis of the Current Status of the PRS 307
The Volume and Structure of the PRS Nationally and in the City of Moscow 307
Demand and Supply of PRS 309
Landlord-Tenant Relations 312
The Future Prospects of the PRS 313
Notes 316
References 317
13: Slovenia: Untapped Potential 319
Historical Foundations: What Remains of the Socialist Legacy 319
Private Renting Today: The Evolution of the Housing System After 1990 322
Housing Privatisation 323
Restitution of Previously Nationalised Property 324
Rent Policy 326
The National Housing Programme 328
Snapshot Analysis of Recent Status of PRS 330
Future Prospects: Unrealised Potential Due to Delayed Reforms 335
References 338
Part III: Conclusion: Private Renting—A Viable Alternative? 339
14: Private Renting in Social Provision: Social Rental Agencies in Western Europe 340
Introduction 340
The PRS in Western Europe 341
The PRS as a Source of ‘Social’ Housing 342
Social Rental Agencies: An Innovative Solution to Housing Need 344
Case Study: SRAs in Flanders, Belgium 345
What Are SRAs? 345
Objectives of SRAs in Flanders 347
The Legal and Financial Status of SRAs in Flanders 348
Affordability of Rents 350
Target Group 350
Context for the Development of SRAs in Flanders 351
Housing Crisis 351
Housing Activism 353
Changes in Social Work 353
Services for the Homeless 354
SRAs in Flanders Today 355
Case Study: France 357
Discussion 359
Notes 362
References 363
15: Private Renting in Social Provision: Initiatives in Transition Countries 367
Introduction: The Need to Bridge a Structural Gap 367
A Region of (Poor) Homeowners 371
The Unavoidable Private Sector 374
Traditional and Innovative Solutions: Public Sector Initiatives 377
The Traditional Approach: Subsidies in the Private Rental Sector 377
In Search of an Intermediary Tenure: Rental Cooperative Models 379
Regionally Innovative: Utilising the Private Sector for Social Purposes 380
Innovative Solutions: Civil Society Initiatives 383
Conclusion: The Limits of Innovation 385
Notes 388
References 388
16: Central and East European Housing Regimes in the Light of Private Renting 392
The Private Rental Sector in Post-socialist Societies: An Overview 392
Central and East European Housing Regimes: Convergence or Divergence? 401
Tenure Structures and Housing Markets in Transition and Beyond 403
Housing Options for Low-Income Households 407
Conclusion: Can the PRS Help House the Poor? 410
Note 414
References 414
Index 417