Transcript Housing subsidy system in Slovakia

Housing subsidy system
in Slovakia
Jaroslava Zapletalová
The Institute of Housing Ltd., Bratislava
Changes after 1989 in subsidy system
• as consequence of political and economic changes
• new position of state and citizens in housing issues
 Constitution: “The economy of Slovakia is based on
the principles social and ecological oriented market
economy.”
– principles of democracy
– market economy (dwelling and services = goods)
– principle of subsidiarity (decision-making as low as possible - local
housing market)
– human rights to a standard of living (“well-being of himself and of
his family, including food, clothing, housing and medical care and
necessary social services ..” Universal Declaration of Human Rights, UN
general Assembly, 1948, Article 25)
steps of changes I - 1990 - 91
• renewal of local self-government in 1990 (elected
representatives)
• necessity of de-etatization the state housing 1991
(state = the worst owner - subsidies into repair program for housing
management companies each year, the last in 1991 = 12,7 bill. SKK,
estimated costs of unrealized repair in 1992 = 250 bill. SKK), no control
on application; in first stage transfer the state housing to municipalities
• conclusion the old state planning and financing
system in 1991 into housing (public support did not take into
account social justice, regulated prices of rent and services applied to all
users)
steps of changes II - 1990 -91
• in 1990 established expert working group to prepare
housing policy ( HP passed in 1991 as government resolution)
new principles:
– citizen is responsible for himself, including his housing
– dwelling is good - not social assignment
– necessity to use public financial sources most effectively
– necessity to introduce new financial tools for housing
development (mortgages, construction saving system with loan, loans
for low income families, grants and programs for renewal)
– state will give assistance for basic standard of living
conditions (housing allowance - subsidy oriented direct to households)
role of decision levels
state =
framework
conditions and tools for housing market development
(legislation, social protection, financial and taxation tools)
region =
coordination of special form of housing
(disables, old people, etc.)
municipality =
well-balanced supply and demand on housing market
(no exclusion)
steps of changes III - 1992

implementation new housing policy tools
– 1992 construction saving system (new law)
• state premium as subsidy to all savers
• per one contract yearly
–
–
–
–
6.000 SKK from 1992
4.500 SKK from 1998
3.000 SKK from 2000
2.500 SKK from 2004
– 1992 - start rent deregulation (step by step)
• fees for housing were divided into two parts - rent and payment for
services (regulation of rent continues to this time, free rent policy is
planed from 2005)
• all deduction were canceled
steps of changes III - 1993 - present
– 1993 energy subsidies (to producers, closed 1998)
– 1993 law about ownership of flats (Condominium law)
– 1994 mortgage system (bank law, real beginning in 1996)
• subsidy as bonus interest rate of mortgage loan
– 6% from 1998
– 4,5% from 2000
– 1% from 2004
– 1994 State Fund for Housing Development (credit for law
and middle income families - on beginning interest rate
3% and 8% - non-returnable consumption of public sources)
– 2000 housing allowance
• direct subsidy system to family
Energy subsidy - to heating producers
Heating subsidies
6
4,8
5,1
5,3
5,5
4,5
Bill. SKK
5
4
2,4
3
2
1
0
1993
1994
1995
1996
1997
1998
Public sources - into housing demand

in 2000 housing allowance - state social benefit
• protection from poverty as part of social safety net
• subsidy based on income of household and total
housing expenses for adequate living standard
• formula HA = MSR - (Y * r)
HA - housing allowance
MSR = maximum social rent
Y = gross family income
r = maximum share of expenses for housing costs,
it was from beginning 30% and from 2002 = 29%
• distributed by state administration on district level
Public sources - into housing demand

2002 - presented social reform - more effectiveness
and better control in social system

2003 - housing allowance changed - become only
part of social assistance to person in material destitution
(it brought excluding several groups of households, special
pensioners and families with one parent)

2004 - started great discussion about needs of
changes
total households = 1,8 mil.
• 2000 ....... 48 548 persons .................... 569 mil. SKK
• 2001 ....... 54 472 persons .................... 486 mil. SKK
• 2002 ....... 62 954 persons ................... 914 mil. SKK
Public sources - into housing supply

in 2001 - subsidy system for social housing
construction and infrastructure (changed in 2004)
– advantageous loan from SFDH for municipalities and
non-profit organizations and subsidy from Ministry of
construction and regional development
– state subsidy was 50% from total construction costs,
from this year 30%, the rest is advantageous loan
– criteria - flat area + income of family
goals of local housing market
=
supply of differentiated quality and form of housing
for all income groups of households
(necessity of different investors)
private ownership
rental
private
housing
physical and legal persons
including co-operatives
public ownership
rental
housing
municipalities
for-non-profit
organizations
local housing market financing
=
supply of different housing quality
on the base of different financial sources
public sources
direct
subsidies
loans
grants
subsidy
subsidy
„on head“ „on brick“
private sources
indirect
subsidies
co-financing
public-private
partnership
tax
deduction
tools for
motivation
without
subsidy
own
loan
sources
support
for
demand
supply
system of subsidies plays important role in effectiveness use the public sources on final results in housing
(quantity, quality of construction and other criteria - as maximum of decreasing the working expenses)
Financial sources into housing new
construction and renewal
Financial sources into new housing and renewal (including subsidy)
Year
Constr. saving system
Mortgages
State Fund for
Housing Development
in year
cumulative
in year cumulative in year cumulative
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003*
19,9
287,5
1 105,0
3 829,8
9 326,7
14 785,2
22 236,3
19 626,5
16 540,3
16 418,9
13 496,7
* data for 9 months
19,9
307,4
1 412,4
5 242,2
14 568,9
29 354,1
51 590,4
71 216,9
87 757,2
104 176,2
120 062,5
440,0
1 450,0
4 387,0
9 238,0
19 884,5
440,0
1 890,0
6 277,0
15 560,0
35 444,5
349,1
1 672,9
3 518,5
1 644,5
3 411,5
3 604,5
5 200,0
2 210,0
349,1
2 022,0
5 540,5
7 185,0
10 596,5
14 201,0
19 401,0
21 611,0
Total
in year
19,9
287,5
1 105,0
4 178,9
10 999,6
18 303,7
24 320,8
24 488,0
24 531,8
30 901,9
35 591,2
cumulative
19,9
307,4
1 412,4
5 591,3
16 590,9
34 894,6
59 215,4
83 703,4
108 235,2
139 173,1
177 118,0
Public sources into new housing and renewal in
Bill. SKK
GDP in 2002 1 073,6 Bill. SKK
Public sourc e s i n Bi ll. SK
11 ,1
12
10
8 ,3
7 ,8
8
6
10
9 ,7
8 ,5
8 ,8
2001
2002
6 ,1
4
3 ,9
1993
1994
4
2
0
1995
1996
1997
1998
1999
2000
Results of tools in new construction
New construction of dwellings
(development from 1965)
45 000
dokončené byt y spolu
z t oho: v rodinných domoch
40 000
finalized dw ellings
total
of w hich in fam ily houses
35 000
30 000
25 000
20 000
15 000
10 000
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1985
1980
1975
1970
0
1965
5 000