REAL ESTATE NEWS

OECD recommends liberalization of rental market

A liberated rental market would help ease tight labor supply.

The Organisation for Economic Co-operation and Development (OECD) has recommended a full liberalization of the Czech rental market in its Economic survey of the Czech Republic 2008. This, combined with further deregulation of the labor market, would help increase labor mobility and ease labor shortages. The distortion of the market by rent control is felt especially keenly in Prague, where workers migrating from outside the capitol find it difficult to find accommodation.

The issue of rent control is a thorny one, as many of these flats are occupied by retired people on fixed incomes. Balancing their needs with that of young people seeking employment in the larger cities is not a problem with a quick and easy solution. Although there are reforms currently in place to slowly bring apartments up to market value, the OECD recommends a greater and faster liberalization.

By SEAN ABBOTT

Published: June 27, 2008