Home sweet home

Property reforms should end in two years time, but until then, many Estonians live in uncertainty, not knowing if they can keep their home or if they will have to leave it to its pre-war owners, Virve Vihman reports.

Estonia is still struggling with its Soviet legacy in the issue of real estate ownership reforms. Though the reforms are in their final stretch, many tenants are still looking for a way out of their homes and their tricky situations.

Residents of buildings built after the war have no large worries with regard to real estate ownership, other than leaking roofs and rusting handrails. On the whole, they have been able to privatize the apartments in which they live.

Those living in buildings dating before the war faced a more complicated situation with the collapse of communism. Once the pre-war owners, or their descendants, reclaimed the property, the residents became "forced tenants."

Privatization securities, or EVPs, were handed out at the beginning of the 1990s on the basis of each individual's work history. These allowed residents to claim ownership of their real estate and privatize land under their building. EVPs were to expire by December 2000, but this has been extended to July 2002. Roughly 15.8 billion EVPs were given out, and 2.5 billion are still in circulation. The expiration of EVPs ought to signal the end of property ownership reforms.

In Tallinn, 2,200 residential buildings have been returned to their pre-war owners, with approximately 23,000 tenants. Over one third of these tenants have moved out. In Tartu, 930 houses have been returned, 40 have decisions pending. Tenants numbering 1,707 have registered with the city government in hopes of finding a new home, though the actual figure of tenants is more. Nearly half of these have bought a new apartment.

The Tallinn city government has just decided to lift the ceiling off rent prices. In Tartu, property owners have been lobbying for raising the limit from 5 to 15 kroons per square meter. Juri Kore, Tartu's assistant mayor dealing with social issues, is in favor of lifting the ceiling altogether, claiming that the 15 kroon limit incites landlords to maximize the rent even when this is not justified.

Rakvere, a town of 17,494 just east of Tallinn, saw its 4-kroons-per-square-meter rent limit eliminated about a year ago. Ullar Vasevik, of Rakvere Housing Maintenance, claims that the market itself keeps rents low in smaller towns.

"The 4-kroon limit was shamefully low. It didn't cover minimal upkeep and repairs. But rents haven't risen above 10 kroons per square meter. The question of setting rent free is more of an issue in larger cities like Tartu and Tallinn, where the market would allow rents to be raised to unfair levels," he said.

The law prescribes that no more than 10 percent of rent should be profit, and the rest should go towards upkeep and repairs. However, there is no system to implement this, and to protest, a tenant must go to court, involving costs far beyond the sums being contested.

Teele is a "forced tenant" living in Tartu. Thirty years ago she moved with her two-year-old son into one room in a wood-heated apartment, with a shared kitchen and a well outside. When her family expanded, she was granted the whole three-room apartment, and undertook direly needed repairs. She arranged for the leaking roof to be fixed, revamped the electricity, added insulation and drainage in the kitchen, replaced the rotting kitchen floor, and the list goes on.

With the fall of the Soviet Union, she submitted a request to privatize her home of twenty years.

However, the nephew of the pre-war owner of the house had a claim on it, which was officially granted in 1995. When he asked Teele to sign a new rental contract, she added a line linking it to an earlier, renewable contract between her and the city government. She claims this line has saved her from eviction so far. But now she needs to find a new home before the present contract ends in 2003, and this is a source of daily fret.

Local governments have made some attempts to alleviate tensions between newfound landlords and their unwitting tenants.

If the owners of the house want to use the apartment, they must arrange a new apartment for their tenants or prove in court that they have need of the rooms. If the court rules in their favor, then the local government is responsible for providing a new apartment for the tenants. If the government lacks the resources, it can turn to the state for aid, though in practice, according to Kore, this hasn't happened.

"The system is very bureaucratic, and it would take far too long for a request to be granted," he said.

The city auctions off rooms it doesn't need, with "forced tenants" having first rights to bid. The auctioned apartments can be paid for with EVPs, at much more favorable rates than the market price.

The local government may also support the relocation of tenants with funds received from the privatization of property. This can be given as a loan (up to 100,000 kroons) or as direct assistance in buying an apartment.

Finally, local governments manage state welfare funds. After rent, 500 kroons per month is the minimum that should remain, and the state doles out support to cover this minimum.

A member of the Lawful Owners Association said that local governments must smooth the transition from rent control to free rent.

"The beginning may be difficult, but the local government needs to assess whether it is able to support the transition and to take the risk," he said, requesting his name not be used.

Tenants claim this vision defeats its purpose. Government welfare money ends up supporting property owners if they are allowed to raise rents at will.

This has not eased Teele's situation. She has nothing to put up as a guarantee for a loan, and the owners of her apartment are not interested in funding her move. She visited the apartments on offer in the last city auction, which she found to be in very bad shape. One was without a lock on the front door and the wooden floor planks were rotting, for example. All of them required immediate repairs to become liveable.

While interviewing Teele, the doorbell rang and a group entered to view the apartment. One man revealed that they are considering buying the house.

"If we do, we'll sell you your apartment and you can have your own home," he said.

Teele thanked him, but after he left, she shuddered. "We'd never have the money to buy the apartment from him. I worry constantly; there's no sense of security if you have no idea what will become of your home. After all I've done to salvage this house from disrepair and to instill a sense of home in my children, I'm wondering where I'll spend the rest of my days."

The current system does not compensate for psychological trauma caused by eviction from one's home.

Landlords point to unemployed tenants who consistently fail to pay their rent and create obstacles to keeping their property orderly. Tenants such as Teele, on the other hand, who have kept their houses from falling apart, feel they have got the short end of the deal.

The social make-up of the group of tenants is roughly the same as society at large, with the same proportion who have stable incomes, and the same proportion with financial difficulties. However, the difficulties of this second group will only be aggravated over time, when their current favorable rental contracts expire, EVPs expire, and rents are raised. Political trends and the free market tend to sympathize with landlords. In a few years, property reforms will officially be over. Whether all the tenants will have resolved their living situations, only time will tell.