Tenancy Law and Housing Policy in Europe
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Tenancy Law and Housing Policy in Europe

Towards Regulatory Equilibrium

Edited by Christoph U. Schmid

Tenancy law has developed in all EU member states for decades, or even centuries, but constitutes a widely blank space in comparative and European law. This book fills an important gap in the literature by considering the diverse and complex panorama of housing policies, markets and their legal regulation across Europe. Expert contributors argue that that while unification is neither politically desired nor opportune, a European recommendation of best practices including draft rules and default contracts implementing a regulatory equilibrium would be a rewarding step forward.
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Chapter 10: The role of tenancy law in the tenant countries Switzerland, Austria and Germany – macroeconomic benefits through a balanced legal infrastructure?

Annika Klopp and Christoph U. Schmid


Switzerland, Austria and Germany have the highest share of tenants in Europe. Economically, rental tenancies constitute an efficient debt financing of housing needs; renting is thus more beneficial than owner occupation. This finding gives rise to a basic thesis: To the extent that balanced regulation contributes to high shares of rental tenancies, it also accounts for macroeconomic benefits. For Austria, this thesis may be confirmed only partially with respect to the well-regulated and organised social rental sector funded by the state. However, private rentals are covered by complicated regimes most of which stipulate forms of statutory rent control. The Swiss case is more in point: Tenancy law is regulated in a relatively balanced way although there is a certain pro landlord-tendency. However, the resort to tenancies may also be explained by the lack of viable alternatives, due to the lack of social housing, very high prices and a prohibitive tax treatment. The German case is most in point. Regulation is relatively equilibrated, though with slight advantages for tenants; the ‘Mietspiegel’, a statistical compilation of comparative rents, constitutes a viable compromise solution between free market rents and rents fixed by statute. Yet, the current balance of private rental markets is fragile.

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