Learning from abroad: the social vibe of a tenant/landlord relationship in a ‘tenant market’
Published: 24 May 2024
Commentary
Writing for the UK Collaborative Centre for Housing Evidence, Dr Adriana Mihaela Soaita delves into the intricate dynamics of tenant selection in Anglo-Saxon countries, contrasting it with Romania’s unregulated rental market and considering the implications of abolishing tenant checks.
In Anglo-Saxon countries, landlords have (almost) unlimited discretion to discriminate economically or against any social background when they select one tenant out of many who applied for their property. They have market power. Even though they can easily evict tenants for non-compliance, they are legally allowed to base their decisions on proofs of employment/salary, credit and renting histories, criminal records and the like, their eyes intruding in quite personal matters, denting privacy-GDPR rights. In this blog, I wish to ask the bold question of what it might mean to issues of discrimination if tenants’ checks are made illegal or drastically reduced. I will illustrate this realm of possibility with the case of Romania’s ‘tenant market’, where I collected 114 qualitative questionnaires and 40 interviews with tenants and landlords for my EU-funded research.
To give a brief context: Romania is a super (outright)-homeownership country, indeed top in the world and only 1.4% of the population rents privately. Many homes are overcrowded (about 50%, unlike the UK), and many are vacant (20%, not unlike the UK). The private renting sector (PRS) is tiny but growing due to unmet demand and available supply. As in the UK, or indeed more so, the PRS is entirely unregulated, there are no legal protections for tenants or landlords alike. All one needs in Romania to rent is an Identity Card (or a passport), a one-month deposit and one-month of rent paid in advance. Tenant checks are socially unacceptable to tenants (vocally so) and the great majority of landlords:
I would not like to ask my tenants for proofs of employment or salary as I would not want to be asked myself either, it is much too intrusive, it is wrong, it’s their life, it is too private. No tenant would accept such demands, anyway; they would just go for the next property
single mother aged 36, large city, three properties
A lack of tenant checks makes outright economic discrimination in accessing the PRS less likely – and this might be a lesson for the West to learn or at least an option for debate. However, besides ethics, the quote above also hints at the fact that tenants have market power: if required to present such proofs, “they would just go for the next property”. Thus, we speak of a ‘tenant market’.
Lack of any formal tenants’ checks means that the ‘social vibe’ of the first tenant/landlord encounter forms the guiding intuition on which a decision to rent is made by landlords and tenants alike, as my participants explained:
Initial trust comes during the first viewing based exclusively on flair, being able to tell if the person is sincere or is trying to fool you with a lot of talk, seeing if what they say corresponds to the profile emanating through their body language, how they check the appliances
single male aged 62, city, 1-property
Intuition, vibe, instinct and the like are not to be derided: risk theorists accept that expert risk assessments are often flawed and too abstract to be relevant in everyday life. As my participants argued, what is proof of employment/salary when one can lose/change their job tomorrow? All that matters is that rent is paid as agreed (supported by the landlord’s right to evict when otherwise, a stipulation incorporated even in more regulated PRS than those of the UK and Romania).
But would such ‘classifying’ practices lead to ‘soft’ discrimination by socially stigmatized categories or random preferences, e.g. ethnicity, age, gender? My evidence shows this is not the case. Perhaps the strongest (economic) argument is that, in a tenant market, the competition for tenants is stronger than for properties. Indeed, Romanian tenants tend to ‘visit’ tens of properties online and a few in person before making their offer, while landlords tend to accept the first willing tenant. Moreover, the Romanian tenant market seems relatively pet-friendly, particularly to cats and small dogs, despite landlords’ initial reluctance.
Further on, would landlords’ arguably enhanced risk lead to poor quality of the properties? My evidence again shows this is not the case. My landlord participants strived to offer good/decent quality (and all considered their properties to be so); 88% of my tenant participants considered their rented properties to be of good/fair[1] quality, and 74% felt fully/almost at home in their tenancies (Fig 1).
[1] Either in relation to overall Romanian housing quality or relative to the rent level and local markets.
Finally, would landlords’ possibly enhanced risks lead to eviction, rent increases or high access rents? My evidence indicates this is not the case for the first two aspects but perhaps not for the last. I found that eviction is rare and, bar one case, led by landlords selling the property or moving in. Across a cumulative number of 200 and 179 tenancies concluded by my tenant- and landlord-respondents, 17 (8.5%) and 8 (4.5%) cases of eviction were mentioned. Long-term/open-ended contracts are appreciated by landlords, triggering rent discounts, while in-tenancy rent increases are very uncommon (and only after 4 or 5 years). Regarding the last aspect though, rents were affordable for only two-thirds of my respondents. If many of those for whom rents were unaffordable[2] preferred to pay more for independent housing and larger floor area, or their rents were actually paid by parents (e.g. in the case of students with no income), the unaffordability of the sector is most strongly expressed by the many individuals who had no other choice but remaining overcrowded in multi-generational family homes as they could not afford to rent privately.
In this blog, I do not wish to conclude by advancing policy recommendations for Romania but by throwing out for debate the critical idea of what making tenants’ (financial and behaviour) checks illegal would mean to matters of discrimination in accessing rental housing, private or social, in the ‘landlord market’ of the UK.
[2] More than 30% of net household income.
This blog was published on the UK Collaborative Centre for Housing Evidence news webpage.
First published: 24 May 2024