Transformation of the Public Sector
                                           Housing Policy

                                      Ing. Katarína Poluncová

                                   Department of Public Economics

                                   Description of the past period

n   between 2nd World War and 1989

n   rationing housing system- large number of constructed dwellings, low quality

n   deformed perception of housing: people were given the impression that housing is a social
service provided by the state

                                     1^st transformation period

n   period from 1990 to 1997

n   transformational character

n   goal: eliminate rationing system of housing and establishing a market-oriented approach

n   neo-liberal approach with strongly market-oriented housing policy

                        Factors which influenced the transformation process

n   macroeconomic changes

  u  sharp decrease of funds invested into housing

  u  privatization

  u  liberalization

  u  deregulation

                              2nd Period of the Transformation Process

n   1997- present

n   liberally-oriented housing policy replaced by more intervening approach to the housing sector

n   1997- Government Plans and Measures in the Area of Housing

n   1999- Housing Policy Concept

n   2001- update of Housing Policy Concept

                              Development Trends of the Housing Stock

                          Structure of the Housing Stock according tenure

                                The Housing Construction since 1971

                                   Housing construction 1990-200

                              Cost of Housing- average purchase price











n   net household income became only about 2.7 times higher

                  Development of the regulated-ceiling rent in an average dwelling

                                           SWOT Analysis

n   summarizes the basic characteristics of the housing sector and the housing policy which can be
identified as being positive or negative (Strengths and Weaknesses). In addition, it summarizes data
on external factors which can have a positive effect on future development of this sector
(Opportunities) or present a danger (Threats)

                                      SWOT Analysis- Strengths

n     transformation of the housing sector is almost complete

n     relatively good availability of housing stock, no overall shortage of dwellings

n     the quality of housing is improving mainly due to new construction and modernization

n     structure of the housing stock according tenure roughly corresponds to the structure that
exists in most EU member countries

n     there is a standard system of financing housing which allows obtaining sufficient funds and
investing them into housing

n     developers and construction firms provide a sufficient offer of housing

                                     SWOT Analysis- Weaknesses

n      distribution of the housing stock does not always correspond to the availability of
employment opportunities on the labour market

n      neglected maintenance over a long period of time

n      the volume of new housing construction, especially rental housing is relatively low

n      social housing sector does not exist

n      the role of municipal housing stock has not been clarified

n      the advantage of living in dwellings with regulated rent is often used by high-income
households

n      low affordability of owner-occupied dwellings

n      the structure of household housing-related expenditures is deformed

n      some support measures are not sufficiently targeted and interconnected- lack of effectiveness

n      not enough private funds enter the housing sector

n      prevalent perception that the state is responsible for fulfilling housing needs of the
population



                                    SWOT Analysis- Opportunities

n    continuing economic growth

n    suitable oriented pro-employment policy, stimulation of business activity

n    termination of the existing method or rent control based on price ceiling and transition to a
contractual system

n    economic growth will balance the acquisition prices of housing with income levels

n    a suitable social policy, adequate targeted social allowance for housing purposes

n    regional policy



                                       SWOT Analysis- Threats

                                         The Housing Policy

                                    State housing policy- tools:

                                    Categorization of subsidies:

1^st view- relation to the state budget

  n    direct subsidies

  n    indirect subsidies

2^nd view- the "classical" division

  n    general subsidies (per brick)

  n    individual subsidies (per capita)

3^rd view- view of demand and supply

  u   supply-oriented subsidies

  u   demand-oriented subsidies

  

                                      Housing Financial System

n   construction saving plans

    t  based on the German and Austrian model

    t  advantages- state subsidy- government contributes 15% of the saved sum annually (up to 3
    000,- Kč a year)

    t  cheap loans



n   system of mortgage loans

    t  provided against collateral, usually consisting  of up to 70% of the value of the acquired
    property

    t  stimulated through interest subsidies derived from the average interest rat on mortgage loans

                                      State Subsidy of Housing