Over the past decade, some 100,000 of Estonia’s 1.3 million residents have been hit by property restitution laws, among the most controversial reforms enacted since this Baltic state regained independence in 1991 as the Soviet Union fell apart. Most have already moved out, but 3,600 holdouts could soon be shown the door – in what critics say is replacing one injustice with another.
Sixteen years ago, newly independent Estonia was faced with the task of untangling the legacy of five decades of communist rule from Moscow. The Soviet Union snuffed out Estonian independence in 1940, when it took over the Baltic state under a short-lived pact with Nazi Germany. The Nazis invaded in 1941, but the Soviets returned in 1944.
After the war tens of thousands of buildings and apartments were confiscated from their pre-war owners, and officers from the Red Army and the KGB, the Soviet-era secret service, moved in. Many former owners were imprisoned or deported to Siberia – a fate shared by thousands of other Estonians. But by 1991, many of the homes had new residents who had bought them during the Soviet era – the communist regime allowed residential property deals. After the restitution law was adopted in 1993, such individuals became so-called “forced tenants” living in properties handed back to pre-1940 owners or their heirs. To give them a buffer, forced tenants received the temporary legal right to stay put, benefiting from rental agreements at a price of one euro ($1.47) per square meter – up to 10 times lower than current market rates.
Estonian lawmakers gradually stretched the period of grace to 13 years starting from the date property was returned. For thousands of tenants that time is up, and owners will be entitled to request a market price rent or end the tenancy outright. Evicted tenants can apply to the state for a one-off relocation aid payment of €5,000 – but only if they do not move into municipal housing.
The sum is a pittance on Estonia’s real estate market. Property prices have spiraled tenfold since Estonian independence, thanks to an economic boom stoked by Estonia’s entry into the European Union in 2004. The average apartment in central Tallinn now costs €3,000 per square meter. Rents, meanwhile, are around six to €10 per square meter.
“Beneficiaries of restitution are not to blame,” said Tiit Ulas, a board member of the Estonian Real Estate Owners’ Union. “It is up to state to help those who can’t afford to pay market price rent when the 13-year period ends,” he said. “Part of the problem is that state and local authorities have not dealt with the problem properly, and there is insufficient social housing for forced tenants who can’t pay a market rent,” he said. The Tallinn city council claims a solution will be found. (gulf-times)
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