Jason Dinse May 9 2015 Tartu Estonia Investigating

Jason Dinse May 9, 2015, Tartu, Estonia

*Investigating housing policy, tax and subsidy systems in the context of tenure neutrality.

Possible meanings range from equal cash outlays by renters and homeowners to equal public spending on each form of tenure.

Possible meanings range from equal cash outlays by renters and homeowners to equal public spending on each form of tenure. * * Equality of user costs (Haffner) Socio-legal equality (Lundqvist) Balanced subsidies plus equal socio-legal status (Kemeny) “Strongly neutral system”: preserves already existing ordering of user costs (Thalmann)

* “Notions about what is really the "best" or the "most worthy” kind of tenure, and notions about what kind of tenure represents the purposes and ideals of the welfare state and related principles. ” (Torgerson 1987). * Housing policy that favours one tenure over another, typically a preference for owner occupancy over renting, as manifested in policy statements, as well as through tax and subsidy systems

* “less bias” – housing policy and tax and subsidy systems, in the aggregate, do not appear to favour owner-occupancy tenure over rental tenure or only favour it to a relatively small extent * “more bias” – housing policy and tax and subsidy systems, in the aggregate, appear to favour owner occupancy tenure somewhat over rental tenure * “strong bias” – housing policy and tax and subsidy systems, in the aggregate, appear to significantly favour owner occupancy tenure form over rental tenure * “shifting bias” – current housing policy recently changed to reflect an unbiased orientation or bias favouring rental tenure, replacing previously existing pro-owner-occupancy policy

less bias more bias strong bias shifting bias Austria Denmark Germany Netherlands Sweden Scotland* Switzerland Belgium Czech Republic England/Wales France Luxembourg Poland Bulgaria Croatia Cyprus Greece Hungary Latvia Lithuania Malta Romania Serbia Slovenia Estonia Finland Ireland* Italy Portugal Slovakia Spain

*Is there a correlation between tenure bias and the occurrence of regulatory failures?

Affordability problems Failure Type Supply problems Ghettoization Tenancy-related tax evasion Poor living conditions Black market rental contracts 0 2 4 6 8 10 12 Number of countries for which failure type reported 14

Black market in rental tenure according to tenure bias type number of countries for which black market in rental tenure was reported 8 strong bias 7 7 6 5 shifting bias 4 4 3 2 less bias 1 more bias 1 less bias more bias 1 0 strong bias tenure bias type shifting bias

number of countries for which poor living conditions were reported Poor living conditions according to tenure bias type 6 strong bias 5 5 4 more bias 3 3 shifting bias 2 2 less bias 1 1 0 less bias more bias strong bias tenure bias type shifting bias

Tenancy-related tax evasion according to tenure bias number of countries for which tenancy-related tax evasion was reported 7 strong bias 6 6 5 shifting bias 4 4 3 2 1 less bias 0 more bias 0 less bias more bias 0 strong bias tenure bias type shifting bias

Ghettoization according to tenure bias type number of countries for which ghettoization was reported 4, 5 strong bias 4 4 3, 5 shifting bias 3 3 2, 5 2 1, 5 more bias 1 1 0, 5 less bias 0 0 less bias more bias strong bias tenure bias type shifting bias

Supply problems according to tenure bias type number of countries for which supply problems were reported 2, 5 less bias 2 shifting bias 2 2 1, 5 more bias 1 strong bias 1 more bias strong bias 1 0, 5 0 less bias tenure bias type shifting bias

Affordability problems according to tenure bias type number of countries for which affordability problems were reported 3, 5 less bias 3 3 2, 5 more bias 2 2 1, 5 shifting bias 1 1 0, 5 strong bias 0 0 less bias more bias strong bias tenure bias type shifting bias

8 7 6 5 4 3 2 1 0 Black market strong Poor living conditions bias 7 shifting bias 4 6 shifting bias 2 3 less bias 1 2 more bias 1 less bias 1 strong bias shifting bias 2, 5 shifting bias 3 more bias 1 less bias 2 shifting bias 2 strong bias 1 1 0, 5 shifting bias 3 more bias 2 shifting bias 1 1, 5 0 less bias more bias strong bias shifting bias less bias 3 2 1 less bias 0 3, 5 2, 5 more bias 1 strong bias Affordability problems 2 1, 5 more bias 0 less bias more bias Supply problems strong bias 4 less bias 0 0 less bias more bias Ghettoization 3 1 0 shifting bias 4 2 1 strong bias shifting bias 4 5 more bias 3 4 strong bias 6 7 5 less bias more bias 4, 5 4 3, 5 3 2, 5 2 1, 5 1 0, 5 0 Tenancy-related tax evasion strong bias 5 6 strong bias 0 0 less bias more bias strong bias shifting bias

* By tracking changes in the reported occurrence of regulatory failures over time in countries with a bias shifting away from owner occupancy compared to countries maintaining a strong bias toward owner occupancy, a correlation between strong tenure bias and regulatory failures could possibly be observed.

In 2007, 89, 766 submerged tenancies surfaced, reducing fraud by 3% from 57. 1% in 2006 to 54% in 2007. Similarly, there were 130, 345 new rented dwelling declarants in 2008. According to the Treasury, this was due to two reasons: 1) 502, 440 tenants first availed themselves of the deduction of 10. 05% for the rent of the primary residence in 2008; and 2) owner-landlords obtained a benefit in the form of 100% reduction of taxable rental income. - GESTHA study