Sigurður Ingi Jóhannsson, Minister of Infrastructure and chairman of the Progressive Party, presented a bill yesterday which aims to improve housing security and the legal position of tenants. Vísir reports on Gunnar Smári Egilsson, the founder of the Socialist Party in Iceland, who seems to have little confidence in the bill.
Sigurður’s opinion seems to be that one of the most important issues affecting the rental market is that it has not been possible to monitor lease agreements and the development of rental prices.
Sigurður says: “If parliament approves the bill, there will be a change, because landlords will be obliged to register contracts in the public housing database. This would give a more realistic picture of the rental market and improve the legal position of tenants.”
He believes that the registration obligation will benefit the public by making the rental market more transparent, and by making it possible to obtain information on the housing market by location.
Sigurður adds: ”Information on rental prices will be useful in assessing whether the rental amount or its increase is fair and reasonable for both parties. According to current law, the rent of comparable housing is the main criterion that must be taken into account when assessing whether the rental amount is fair and reasonable, but there is a lack of parties to the lease agreement being able to obtain reliable information on market rent at any given time.”
Gunnar Smári, for his part, has his doubts about the bill. “His contribution to inequality was to create a website for information based on tax returns. It is now meeting an emergency situation in the rental market by forcing tenants to register leases. Will it improve the status of tenants? No.”
In Gunnar’s opinion, this describes an obsession, the belief that market failures are not due to monopoly and oligopoly or the superior position of sellers and landlords, but rather that the problem is lack of information.
Gunnar believes that the government’s actions are hostile to the poorest in our society, and that they are not listened to by the ministers. To this effect he adds: “There is an emergency situation in the housing market and it is clear that the situation will deteriorate rapidly in the coming weeks and months. The government is meeting this with a bill on mandatory registration of leases. God help the tenants.”
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