International prespective
The OECD ranked our country second to last among OECD countries in regulating the rental market, despite the fact that about 27% of the Israelis rent the apartment they live in.
In Tel Aviv – Yafo, about half of the residents are renters and among the young adults population this rate raises to 82%.
Mazeh 9, the Tel Aviv – Yafo Municipality's Center for Young Adults, has worked for the past two and a half years on developing solutions to address the fair rental issue. We also work to promote Government and Knesset legislation regulating the market, as well as giving the municipalities the authority to intervene in the domestic market.
In this framework, we researched how other countries are putting order in the rental market, emphasizing on countries with attitude of free-market such as USA, UK and Canada.
What did we find out?
In general, about 30 countries have regulatory mechanisms at different levels of intervention and as mentioned, they are significant free-market countries.
Many countries maintain laws that ensure stability and certainty both to tenants and to landlords with reference to issues such as: (1) Rights and duties definition of both parties, (2) Curb of the rents' rise, (3) basic standards for the maintenance of the apartments and (4) certification of municipalities' supervision of the local rental market.
In California, for example
-The guarantee amount is limited by law.
-The law establishes appropriate standards such as minimum size apartment and proper ventilation in the apartment.
-The law authorizes the city to establish a more detailed inspection arrangement. In San Francisco, 70% of the apartments for rent are under the supervision of the municipality. Rents are set on the open market, but the increase rate of the annual rent is given limited supervision.
In Ontario (Canada), for example
-73% of the apartments for rent are monitored. Rents are set on the open market, but the maximum rate of raising the annual rent is limited by law based on the CPI.
-The law regulates the repairing responsibility on deficiencies caused by safety or health hazards and in case of exceeding basic standards such as broken windows repair and a sufficient existence of windows.
-In cases of disagreements, the parties may apply to the Tribunal for rents which is considered to act fast.
In England, for example
-The rental price is determined independently but rent increase is limited to a "fair" rise, measuring and comparing the region's prices. A tenant may appeal to the rental Court about the rent.
-The law refers to the owner's obligation for regular maintenance. The law authorizes local authorities to enforce proper maintenance of the property and to issue orders to overhaul the case of a health or other hazard (such as a leaking roof). In addition, guarantees are deposited in a special municipal fund which keeps the money for both parties.
The study was commissioned by the Young Unit of the Tel Aviv – Yafo Municipality in cooperation with the Strategic Planning Unit. It was written by Dr. Nir Muallem as part of a team of urban policy promotion to regulate the rental market in collaboration with the Lawyer's Association.