Transcript some aspects of alternative and affordable housing in poland

Some aspects of alternative and
affordable housing in Poland
Jarosław BYDŁOSZ, Piotr PARZYCH, Poland
Department of Geomatics
Faculty of Mining Surveying and Environmental Engineering
Joint FIG Commission 3 and Commission 7 Workshop
Sofia, Bulgaria, 14-17 November 2010
IDEA BEHIND THE ESTABLISHMENT OF
HOUSING ASSOCIATIONS (TBS)
• Buying property with the title of
ownership usually involves considerable
expenses.
• Given the financial potential of an average
Pole, they are forced to take out a loan to
make such investment.
• People who are not creditworthy or
unwilling to undertake so much usually
choose to rent a flat from private persons.
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IDEA BEHIND THE ESTABLISHMENT OF
HOUSING ASSOCIATIONS
• An Act on some forms of supporting house building
was passed on 26 October 1995.
• It defines the rules of how the National Housing
Fund and Housing Associations should function.
• A system of building rentable flats was introduced
in Poland under the Act.
• The purpose of the Act was to make possible the
building of flats which would be affordable to so
called „middle-class” people possessing no other
flats.
• The flats were to be built with the participation of
the state which granted loans on preferential
terms, being half cheaper than the commercial
loans.
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TERMS ON WHICH HOUSING ASSOCIATIONS
FUNCTION
• The main legal act which establishes
housing associations (TBS) and regulates
their functioning is the Act of 16 October
1995 on some forms of supporting house
building.
• Of course, the functioning of housing
associations is strictly related to the
possibility of being granted loans by the
National Housing Fund which was
launched by the National Economy Bank
(BGK).
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TERMS ON WHICH HOUSING ASSOCIATIONS
FUNCTION
• A commune gives its own land for a building to be
built, which reduces the cost of the whole
investment.
• The commune creates conditions for the
development of rentable-house building on its area
and in this way it increases the housing resources
and at the same time satisfies people’s housing
needs.
• An additional advantage of such actions is that the
commune’s financial input in the building of new
flats is limited and amounts usually to 30%, which,
as opposed to council flats, makes it possible to
save considerable capital.
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TERMS ON WHICH A LOAN IS GRANTED
• The whole process of building or renovating flats
by housing associations has been made possible
only by the launching of the National Housing Fund
administered by the National Economy Bank.
Under the Act on some forms of supporting house
building, the Fund is above all composed of:
• budgetary resources specified in the budget act,
• interest on granted loans,
• interest on the Fund capital deposited in banks,
• income from the Fund capital being invested in
securities issued by the State Treasury or the
National Bank of Poland.
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NATIONAL HOUSING FUND
• The National Housing Fund was liquidated
in 2009
• The National Economy Bank (BGK) is
supposed to grant preferential loans there
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TERMS ON WHICH A LOAN IS GRANTED
• Using the capital gains, the Fund
(presently BGK bank) may allot money to:
• granting loans, on preferential terms, to
housing associations and housing
cooperatives for the building of residential
premises,
• granting loans, on preferential terms, to
communes for the development of public
technical infrastructure which
accompanies the house building carried
out in accordance with the Act.
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ACTIVITIES OF HOUSING ASSOCIATIONS
• The most important thing as far as the
activities of housing associations are
concerned is that they are non-profit.
• They are the only example of a
commercial law company whose aim is not
to generate profit to be shared among
partners.
• Any income received by a housing
association conducting its activities is
allocated entirely to the building or
purchase of rentable flats and their
maintenance.
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ACTIVITIES OF HOUSING ASSOCIATIONS
• The main activity of housing associations
is the construction of residential buildings
and their use by leasing.
• They also may:
– purchase residential buildings,
– renovate and modernise buildings which
are for lease purposes,
– manage their residential and nonresidential buildings under contracts for
services,
– rent business rooms located in their
buildings.
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TRANSFORMATION OF RIGHTS TO RESIDENTIAL
PREMISES FROM HOUSING ASSOCIATIONS’
RESOURCES AND EVALUATION OF RESIDENTIAL
PREMISES
• Residential premises from the resources of housing
associations are premises with no title of separate
ownership.
• The legislator has not specified in any way what
will happen to the tenants and the residential
premises they live in after the loan granted by the
National Housing Fund is paid up.
• The Ministry of Infrastructure is currently preparing
a new bill on housing associations.
• The bill provides for the possibility of purchasing
flats with the title of ownership even before the
loan from the National Housing Fund is paid up.
However, the situation of the tenants who live in
housing associations’ residential premises varies,
which is why it will be difficult to define uniform
and cohesive rules for all those who want to buy
premises with the title of ownership.
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CONCLUSIONS
• The institution, which are the housing associations,
despite its great contribution to the development of
house building in Poland, seems to be undervalued
and left alone.
• The Act which set up housing association
companies has not been amended in any
significant manner with regard to the housing
association idea since 2004.
• The associations, although they are commercial
law companies, exist on a non-profit basis, which
means that their shareholders have no income for
themselves from the company, except that they
receive salary under the employment agreement.
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CONCLUSIONS
• While building rentable flats with the use of loans
granted by the National Economy Bank on preferential
terms, the associations not only gave the communes the
opportunity to perform housing policy tasks but they
also gave ordinary citizens a chance to have their own
flat.
• There is only one problem: “your own flat” is not fully
your own.
• Despite the agreement to participate, that is, although a
person living in the residential premises from the
housing association resources shared the construction
costs of the residential premises and although they paid
up the loan taken out by the housing association while
paying the rent for the flat, such person is still not the
rightful owner of the residential premises.
• As regards housing associations, no solutions are
provided for in this matter now.
• Some legal regulations are being prepared by central
government, but it is not known when (or if) they
become a law
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CONCLUSIONS
• The current situation of a world economic
crisis will force state authorities to
restructure the system of financing the
alternative forms of house building and to
change legal regulations, with the latter
being directly connected to the former.
• The problem of regulating the ownership
of property which was built that way
should also be solved as soon as possible.
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THANK YOU VERY MUCH
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