TALLINN - President Arnold Ruutel last week refused to promulgate amendments to the Housing Act that would abolish rent ceilings and allow landlords to charge significantly higher rent for apartments.
The president sent the amendments to the law back to Parliament on June 30, forcing members of Res Publica, the Reform Party and the Pro Patria Union - the main supporters of the amendments - to sit through an especially complicated Parliament session.
Defending his decision, Ruutel said that legislators' desire to remove the current rent limitations for landlords was "understandable." He added, however, that Sept. 1, the date the amendments were set to go into effect, was too soon and did not allow tenants affected by the changes to arrange alternative living conditions.
"Solutions to the problems that emerged during the years of the property reform demand integral and balanced measures that take into account the interests of both the landlords and the tenants," said Ruutel.
The political stakes of the issue are high, as are emotions surrounding the debate. A demonstration in front of the Presidential Palace in Tallinn, arranged by the Center Party and unions of tenants, resulted in a meeting between the president and several representatives of the demonstration.
Parliament had lifted the maximum 15-kroon (1 euro) per-square- meter-residential-area rent limit after a long and heated dispute on June 15, thanks to the strong lobbying of Res Publica and the Pro Patria Union.
Minister of Economic Affairs and Communications Meelis Atonen, referring to the People's Union, told the Postimees daily that the president fell under the influence of "a particular party" that had managed to convince him that limits for residential-area-rent prices exist in other countries.
Atonen explained that limits existed elsewhere only for municipal or state-owned property, but Estonia, with its current rent/price limits for private-owned residential areas, was a unique example.
There are about 7,200 families in Estonia currently living in apartments owned by landlords or municipalities. According to experts from the Center Party and People's Union, some 3,000 families would face financial difficulties if landlords increase rent.
The Center Party pulled out all the stops to block the amendments, going so far as to use a quasi-filibuster during the parliamentary session, stretching the legislature's work to the early morning hours.
As a compromise option, supporters of the amendments offered about 1,000 Tallinn families in municipal houses, the so-called "forced tenants," the pre-emptive right to privatize their apartments. The tenants would otherwise have to compete with real estate companies and offer a competitive market price.
Thousands of Tallinn residents received the status of forced tenants as the houses they inhabited were returned to the pre-war owners or heirs. The rent limit was set as a measure to prevent landlords from squeezing out the tenants and then selling or renting them for higher prices.
Real estate experts believe that in most cases the tenants would not be forced out by higher prices after the rent limit was raised, and that reasonable compromises would dominate.
According to the Ministry of Economic Affairs and Communications, which supports the amendments, all present rent contracts would remain in force, catering a smooth transition from old prices to new.
