National Responses to COVID-19 a year after: are those measures there to last?
During UIPI February National Affairs Committee, UIPI presented the outcome of the analysis on the national responses to the covid-19 crisis, which heavily affected the housing and real estate sectors. After a first snapshot of the national measures taken to face the pandemic back in April 2020, the meeting was the occasion to update the national data collected and compare how the situation evolved after a year of pandemic and emergency state and examine possible future developments.
From a procedural point of view, a rapid evolution regarded the adaptation of condominium rules. While in April 2020 online assemblies were prohibited in most of the countries, now they seem to be the rule, along with other emergency measures and tools to facilitate decisions. The prolongation of the pandemic resulted also in the extension of the emergency measures taken earlier last year, among which the suspension of evictions. However, their continuous prorogation and the delays in the handling of claims in courts, especially regarding decisions adopted before the pandemic, often constitute abuses on property owners’ rights, as our members point out. In this sense, the suspension is not always clearly linked to the difficulties derived from the pandemic, and it often happens that some evictions are suspended even though they were related to previous situations.
As regards the alteration of residential and commercial leases, several approaches were taken. In particular, less deferral measures than in 2020 and more rent-reduction measures seem to be a trend. Moreover, various voluntary initiatives are still in place ranging, for example, from landlords voluntarily granting fixed rent reductions to all the tenants of restaurant premises in Finland to agreed rent reduction following reduced turnover in Czech Republic.
The mortgage relief options are also pretty much in line with last year; the most common measure is still the moratorium in the payment of the mortgage quotes. In addition to this, support measures for energy consumers are still a common tool. While there have been less moratorium and suspension measures than in 2020, aids for the payment of energy supply are nonetheless starting to be provided in a few countries. In Spain, for example, there is an aid for the payment of energy supply for families affected by COVID-19 and also some big energy companies launched aids to lighten the burden on families.
Another important segment of analysis was represented by support or compensation measures. Looking at the rental sector, several solutions were foreseen, mainly support on property taxes and rent supplements. Among the most interesting measures identified were rent rebate schemes that some governments, like in Sweden, have had approved by the Commission under the Temporary Framework, a tool which allows state aid under particular conditions. In the Swedish example, a government programme for commercial lease reduction was implemented in 2020. Down to a 50% reduction, the government covered half the reduction, i.e. a 25 % government provision. The rest was to be covered by the landlord. Any additional reduction beyond 50% had to be fully covered by the landlord. Recently, a new commercial lease reduction programme for the first quarter of 2021 was revealed: the government is now prepared to pay 50 % of any lease reduction, as long as the landlord covers the rest.
Finally, most of our members agreed that some negative impacts on property tax are generally foreseen in the future, as most of the governments will try to compensate for the deficit engendered, while a rental debt crisis is also pointed out as one of the biggest threats for the housing sector.