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Residential flat towers in Vilnius

Former Vilnius deputy mayor proposes municipalities to have the power to cap rents

Former Vilnius deputy mayor proposes municipalities to have the power to cap rents

Gintautas Paluckas is of the opinion that this will help the local authorities act as advocates for the residents

Gintautas Paluckas, an MP at the Lithuanian Parliament and a former deputy mayor of Vilnius (2015-2019), has put forward a proposal which states that municipalities should have the power to determine maximum rent prices. The proposal should affect residential premises rented on commercial terms by companies, institutions, organizations and natural persons.

Mr Paluckas, who represents the Social Democratic Party in the Seimas (as the parliament is known there), believes that the proposed legal regulation would strengthen the powers of self-government and allow solving the problem of a housing shortage.

Decentralisation in housing policy

According to the parliamentarian, as cited by LRT, the Civil Code currently stipulates that the national government can make a decision on the determination of the maximum rent for residential housing rented on commercial terms, but it does not use it.

Until now, maximum rent prices have never been introduced in Lithuania. In regions where there is no shortage of rental housing, any national regulation would be redundant. However, if municipal councils are given the right to determine the maximum rental price of residential housing instead of the Government, the problem would be solved where it really is, for example, in the city of Vilnius,” said the author of the proposal.

Due to the sudden increase in the demand for rental housing, especially in Vilnius, Kaunas and Klaipėda, people are forced to agree to all the conditions of the landlord, which include the increase in rent prices.

"This is also due to the fact that Lithuania still does not have a tradition of collective representation of tenants' rights, typical of old democracies. In addition, it is necessary to assess the rapidly growing prices of electricity, heating, and water, which can significantly reduce the purchasing power of citizens and increase the risk of poverty," explained Gintautas Paluckas.

According to him, this kind of regulation is typical of the big cities of Western European countries (Berlin, Copenhagen, etc.) and enjoys broad support from the citizens. If adopted, the proposal could enter into force on 1 January 2023.

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