Rents: What is the state’s role?

With the increase in demand for homes to rent, especially for apartments, as expected, there was also a significant increase in rent prices.

Meanwhile, wages have virtually remained the same or have decreased during the period 2011-2018.

At present I will not go into the reasons which led to this increase of rent prices.

I will focus, instead, primarily on the group of our compatriots who are in need of housing, yet their finances do not allow them to rent, let alone to buy their own home, and secondly on the state’s role on the matter.

WAGES

As things stand today the net salary of a newly recruited employee is less than EUR 1,000.

The few one-room apartments available on the market have rents starting from EUR 500. When one considers the payment of bills, such as electricity, it is obvious that there is not much money left for a person to cover other essential living costs.

Furthermore, I must point out that due to the economic crisis between the years 2011-2016, the family support network has “collapsed” in many cases, as data reveals a worsening of the financial status of most Cypriot families.

Of course, we should not expect property owners to implement social policy and to provide accommodation either free of charge or at a price that is significantly below the market rent.

This is because the owners, in turn, have debts and expenses as a result of acquiring and managing their property. The crisis has also had a significant negative impact on owners as their property either remained empty for a long period of time or they were forced to accept to lease it out for a low rent.

JUSTICE

At this point I must mention the long delays in the attribution of justice when owners try to take legal measures against tenants who are not consistent with rent payments. There is also the negative position of the political parties in proceeding with rationalisation of the relevant legislation, as the current legal framework essentially transforms landlords into their tenant’s sponsors.

Based on all these facts, we believe that the state must dynamically get involved in order to play a decisive role in the matter and to assume its responsibilities.

It is true that the state partially subsidises some of the rent. These subsidies are not, however, based on current prices.

It is for this reason that we expect the state to determine the percentage of its sponsorship, for it to be in line with fluctuations in rent prices, and the needs of the individual or the family to which the subsidies are offered.

HOUSING ESTATES

From time to time, ideas such as the building of housing estates have been put on the table to solve the housing problem.

This, in our view, is a bad. offhand proposal that will prove to an unworkable solution.

Why? For the simple reason that this will end up creating settlements and ghettos of people with low family incomes. Such a solution, in addition, will create many social problems and will isolate and stigmatise many of our compatriots.

In conclusion, we want to emphasise once again the importance of the state’s role, which should properly assess the housing needs of our compatriots, linking them to the rents as they are shaped by the market. George Mouskides is CEO of FOX Smart Estate Agency and President of Cyprus Land and Property Owners Organisation (KSIA)