Paying the price for tenants' rights
Homeowners beware: If you're planning to rent out that second apartment you bought as an investment nest egg, don't.
That's certainly the signal sent out to landlords last week after Parliament passed a draconian anti-landlord law protecting the rights of tenants. Typically, it was a message of mixed signals and instead of protecting the very people it's aimed at particularly the young and the down-at-heel it's probably gone some way to making their lives a lot more difficult.
The short-sighted nature of the legislation could help further restrict the free movement of labor in Poland, compounding the already dire prospects for rural job seekers.
As a result of the new law, tenancy agreements must be concluded for a minimum of three years, unless the owner sells up or leaves the country. Also landlords will have to wait for four months of rent arrears before issuing the tenant with a warning. After this, owners still won't be able to evict tenants but merely terminate their contracts and begin a costly lawsuit. The landlord will also have to provide alternative accommodation before any possible eviction if the tenant is deemed ill or has any other valid reason for nonpayment.
Anyone hoping to invest in the property market, especially in lucrative urban development areas around Warsaw, will now almost certainly have second thoughts after reading the finer points of the new law. The knock-on effect, of course, will be to stifle the real-estate sector at a time when liquidity is vital to kick-start the construction industry and build new cheap homes.
But more worrying will be the possible restrictions on incoming flows of labor from the countryside, especially among young graduates looking for their first jobs in Poland's larger cities. After this new law is introduced, no landlord with any sense would want to take the risk of renting to cash-strapped rural jobseekers, but will instead seek the guarantees of urban professionals on regular fixed incomes who can afford regular payments for several years.
With unemployment as high as 40-50% in some country towns and villages, the free and easy movement of labor is vital for getting people into jobs and those jobs are in the cities. Unemployment will clearly not improve for some time as older areas of heavy industry continue to wilt under their post-communist malaise and new greenfield sectors and urban start-ups suffer the effects of the economic downturn.
The free flow of labor is essential for the economic health of the country. But the cities are already suffering serious accommodation shortages and much of the available space is priced way above the level a rural jobseeker can afford. The sad fact about the new legislation is that current levels of available urban housing may be as good as it gets for many rural unemployed seeking a better life in the cities. Without anywhere to live, many young able-bodied Poles will simply have to stay where they are, poor and jobless.
