Social Housing in the Czech Republic – Unresolved Question

							Options and Perspectives of Social Rental Housing in the CEE Region
                  Budapest, Hungary, October 6-7th 2008




  Social Housing in the Czech Republic –
Unresolved Question and Future Prospects



        Martin LUX, Daniela GRABMÜLLEROVÁ
      Institute of Sociology, Academy of Sciences, Prague
          Ministry for Regional Development, Prague
                      martin.lux@soc.cas.cz
                daniela.grabmullerova@mmr.cz




          The Socio-economics of Housing Research Team
           The Institute of Sociology, Academy of Sciences of the CR
    Options and Perspectives of Social Rental Housing in the CEE Region
                      Budapest, Hungary, October 6-7th 2008


Structure of presentation

   Short introduction on transitional housing policies in the CEE
    region and the meaning of economic subsidies;

   Current housing policy changes in the Czech Republic;

   Social housing – misunderstanding, current prospects;

   Conclusions.




              The Socio-economics of Housing Research Team                  2
                The Institute of Sociology, Academy of Sciences of the CR
    Options and Perspectives of Social Rental Housing in the CEE Region
                      Budapest, Hungary, October 6-7th 2008


Housing policies in CEE countries – what was shared?

   Different approaches to housing finance, housing privatization,
    rent regulation, supply-side as well as demand-side
    subsidies…..

  BUT

   similar and huge economic subsidies to public tenants;

   decisive influence of central governments (preserving “old”
    privileges);

   untargeted character of economic subsidies (including often
    new subsidies);

   insider-outsider tensions.




              The Socio-economics of Housing Research Team                  3
                The Institute of Sociology, Academy of Sciences of the CR
    Options and Perspectives of Social Rental Housing in the CEE Region
                      Budapest, Hungary, October 6-7th 2008


Economic subsidies in the Czech Republic

   Two types:
      » economic subsidy to tenants who enjoyed low regulated rents (10
        bill. CZK in 2002; 7 – 8 bill. CZK in 2005);
      » economic subsidy to homeowners who purchased their housing for
        prices under their market levels (10 bill. CZK annually).

   most important housing subsidies till 2006;

   income regressive.




              The Socio-economics of Housing Research Team                  4
                The Institute of Sociology, Academy of Sciences of the CR
    Options and Perspectives of Social Rental Housing in the CEE Region
                      Budapest, Hungary, October 6-7th 2008

Current development of housing policy in the Czech
Republic
   economic subsidies come to an end;

   new subsidies biased towards owner-occupied housing tenure
    and demand-side subsidies.

   What kind of help we are going to offer to people who cannot
    afford housing at market prices when economic subsidies will
    cease to exist?

   How to assure that housing is affordable for low-income
    earners, socially or physically handicapped, lone parents,
    young couples; and how to do it especially in regions that
    offer enough employment opportunities but where house
    prices are also very high?

   What approach to apply to prevent from social segregation?


              The Socio-economics of Housing Research Team                  5
                The Institute of Sociology, Academy of Sciences of the CR
    Options and Perspectives of Social Rental Housing in the CEE Region
                      Budapest, Hungary, October 6-7th 2008


„Social housing“

   Not defined on central level except for VAT purpose (flats up
    to 120 m2 and family homes up to 350 m2, no targeting, no
    other conditions);

   No non-for-profit housing legislation, freedom of municipalities
    concerning allocation of vacant municipal housing;

   Since 2003 grants for municipal housing construction became
    more targeted to those in need:
      » supported housing - protected housing, half-way housing, entry
        housing;
      » municipal rental housing – former abused „coop“ form abondened,
        income targeting and rental tenure applied.




              The Socio-economics of Housing Research Team                  6
                The Institute of Sociology, Academy of Sciences of the CR
    Options and Perspectives of Social Rental Housing in the CEE Region
                      Budapest, Hungary, October 6-7th 2008


Misunderstanding around social housing

  Before 1989

   no special definition of social housing;

   the right to housing for all citizens was guaranteed by the
    state;

   system tried to make housing a pure public good;

   characterized by unskilled management, bureaucracy, free-
    riding, low-quality construction, under-maintenance, huge
    inefficiencies, illegal practices, clientelism, corruption.




              The Socio-economics of Housing Research Team                  7
                The Institute of Sociology, Academy of Sciences of the CR
    Options and Perspectives of Social Rental Housing in the CEE Region
                      Budapest, Hungary, October 6-7th 2008


Misunderstanding – case of social housing (cont.)

  After 1989

   governments tried to retain the existing „housing privileges“
    for those who already enjoyed them: by privatizing public flats
    into the ownership of the tenants at very low prices or at no
    cost, or by retaining the strong security of tenure for tenants
    and low rent;

   Hungary with 4% of the housing stock in the category of
    „social renting“ versus the Czech Republic with 19% of the
    housing stock in the same category;

   fatal error: it lacked the perspective of the flat-users;

   position of the municipality as landlord is also a distortion -
    quasi-homeownership.


              The Socio-economics of Housing Research Team                  8
                The Institute of Sociology, Academy of Sciences of the CR
    Options and Perspectives of Social Rental Housing in the CEE Region
                      Budapest, Hungary, October 6-7th 2008


Conclusions

   General conclusions
     » more attention to economic subsidies is strongly needed (main
       housing subsidies, impact on social inequalities, social tensions);
     » More careful analysis of social housing statistics, e.g., municipal
       housing could be also viewed as owner-occupied housing and
       owner-occupied housing stemmed from public housing
       privatization can be viewed as social housing;
     » necessary discussion on meaning of „social housing“ in
       international comparisons generally lacked.

   Further conclusions
     » Exclusive orientation of the Czech housing policy towards owner-
       occupied housing needs to be changed → social or non-for-
       profit housing, supply-side subsidies;
     » New system currently being prepared by the Ministry for Regional
       Development (grants for investors, revenue subsidies for
       landlords).


              The Socio-economics of Housing Research Team                   9
                The Institute of Sociology, Academy of Sciences of the CR
Options and Perspectives of Social Rental Housing in the CEE Region
                  Budapest, Hungary, October 6-7th 2008




           Thank you for your attention.




          The Socio-economics of Housing Research Team
           The Institute of Sociology, Academy of Sciences of the CR