One million state housing units hold back development
Summary:
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There are more than one million state-owned housing units in Poland. In 2016, they accounted for 7.6% of the total housing stock, which is relatively high compared to developed countries. This gives Poland 11th place out of 33 OECD countries. This is more than twice as much as the 2.9% in Germany and 19 times more than the 0.4% in the Czech Republic.
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Unlike private rental housing, state-owned housing restricts mobility rather than improving it. The extreme preferential conditions of state rent and the possibility to "come to ownership" mean that very rarely do tenants move out of them. In Warsaw in 2018, the rent of municipal apartments was 10 times lower than the market rent. Therefore, it is not surprising that in the entire municipal housing stock only less than 2% of apartments changed tenants in 2018.
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The recurring attempts and demands to build state-owned housing units for rent are illusory. In Poland there are one million state-owned housing units which, instead of improving mobility by allowing the young to migrate to metropolitan areas or move away from their parents, additionally limit the mobility of their tenants, whose material situation is practically not monitored by officials.
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Instead of trying to replace the rental market by the state, we should enable its development in Poland. In particular, we should abolish tax discrimination of rental versus ownership, better secure the interests of landlords and tenants in contracts for private individuals, end state subsidies for ownership (such as the guarantee of own contribution and housing vouchers announced in the "Polish Deal"), as well as enable creation of funds investing in real estate in Poland.
Contact to author:
Rafał Trzeciakowski, FOR Economist
rafal.trzeciakowski@for.org.pl
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