Housing Policy
Concept
approved by the Government
under Resolution No 292 of 16 March 2005
Ministry for Regional Development
Housing Policy Section
March 2005
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Housing Policy Concept
Contents:
1. Introduction
2. Current situation in housing and housing policy
3. Mid-term concept of housing policy up to 2010
4. Short-term implementation programme for 2005-2006
5. Appendices
1. Introduction
Under Act No 2/1969, as amended, the Ministry for Regional Development is the `central
body of state administration in matters of... housing policy, housing development, and
housing stock and matters related to the letting of residential and non-residential premises...'.
Under this Act, the Ministry for Regional Development `coordinates the activities of
ministries and other central bodies of state administration in the scope of the housing
policy..., including the coordination of the way these activities are financed...'. An essential
requirement of this coordination and of the implementation of the housing policy per se is this
Concept, which extends beyond the confines of the Ministry and expresses the Government's
general plans in the field of housing.
Housing is unquestionably one of the present Government's priorities. The Government
considers housing to be an important element of the standard of living and the general quality
of life enjoyed by the population, and is aware of the risks that could emerge if the housing
situation were to deteriorate and that could have a negative impact on areas such as the
functioning of the labour market, the process of social inclusion, and the state of health of the
population.
With due consideration for the important and indispensable role played by housing, the
Government of the Czech Republic presents its concept of housing policy to municipalities,
regions, and all entities active in the field of housing. This is a binding political document in
which the fundamental development trends and specific goals of housing are laid down. The
concept of housing policy is of a medium-term nature and applies to the period from 2005
until 2010.
This concept is based on the Government's Policy Statement and respects known external
factors that affect the field of housing and housing policy. These include the macroeconomic
framework, restrictions stemming from the reform of public finances and therefore realistic
demands on public budgets, the influences of European integration, and demographic trends.
The concept of housing policy respects the role of the State in the field of housing which is
standard in European countries and which is embodied in numerous international documents,
such as the General Declaration of Human Rights, the International Pact on Economic, Social
and Cultural Rights, and the European Social Charter. These and other documents contain a
general formulation of the rights of citizens to adequate housing; the governments of
individual countries are responsible for ensuring the fulfilment of these rights. However, the
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right to housing is not viewed as an automatic entitlement and therefore the State's role in
housing is not the direct provision of housing, but the cultivation of a situation where people
can secure the corresponding level of housing by themselves or with a certain degree of
assistance from the State. This document also has to take account of new factors emerging as
a result of the Czech Republic's integration into the European Union. These are not only the
rights of EU citizens who dwell on the territory of the Czech Republic or who work here, but
also the adaptation of the housing policy to the conditions of the EU's common market. In this
respect, the concept must also respond to the definitions of State aid in the field of housing
which are subject to the rules laid down in the EC Treaty. The key definition here is that of
`State aid'. The provision of State aid is a Community right, except in cases where general
prohibitions apply. The fact that the issue of State aid is of fundamental significance in
Community law is supported by the fact that the basic legislation is included in the Treaty
itself, specifically in Articles 87 to 89, which are developed further in secondary Community
legislation, especially in Council Regulation (EC) No 659/1999 laying down detailed rules for
the application of Article 88 (previously Article 93) of the EC Treaty, and in Council
Regulation (EC) No 794/2004, regarding the form, content, and other requirements of
notifications and annual reports.
The term `State aid' means the provision of funding out of any public budget, including
regional and municipal budgets. State aid covers all forms of assistance, i.e. diverse grants,
soft loans, subsidies for the coverage of interest payments, guarantees for credits, tax
holidays, reduced social security contributions, the letting of property owned by the State,
regions, or municipalities at reduced prices, etc. State aid, then, is not just funding supplied
directly out of the national budget, or out of a municipal or regional budget, but also includes
resources `saved' by the beneficiary due to the provision of a certain advantage. The Office
for the Protection of Competition, in accordance with Act No 215/2004, on the regulation of
certain relations in the field of State aid and on an amendment to the Research and
Development Support Act, plays the role of the central coordinating, guiding, consulting, and
monitoring body for State aid in the Czech Republic.
In European countries, there is a general consensus that sufficient space in the field of housing
should be given over to the forces of market mechanisms; however, these market mechanisms
must be adjusted accordingly by legal and economic instruments to ensure the fulfilment of
the social objectives which are inherently connected with housing.
These circumstances involve bringing the system of housing benefits into line with the above-
mentioned rules of State aid applied by the EU in the scope of Community law. Under these
rules, the provision of State aid is prohibited or restricted, or contingent on approval by the
European Commission, in cases where the following set criteria are met:
The transfer of State resources, including the funds of municipalities, regions, the
State bank, public-law foundations, the State, etc., not just in the form of grants, but
also guarantees, tax allowances, depreciation, capital investments, etc.
Some entities gain an economic advantage by acquiring assets at a price lower than the
market value (or at a price higher than the market value, access to infrastructure free
of charge, etc.).
Aid is granted selectively, so it affects the equilibrium among aid beneficiaries and
their competitors.
Aid affects, or could affect, competition or trade between Member States, with the
exception of de minimis aid, where it is assumed that such assistance has no effect on
competition.
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For any instruments of support in the field of housing (for a natural or juristic person) not
classified as de minimis aid, applications must be filed for an exemption from the prohibition
of providing State aid. The terms and conditions of such exemptions are detailed in Articles
87(2) and 87(3) of the EC Treaty. These applications form the basis for an examination of
whether the aid is of a social nature or is used to cover damage caused by natural disasters. In
all cases, this aid is compatible with the common market (as is all assistance channelled into
certain areas of the Federal Republic of Germany affected by the division of Germany).
The European Commission may also consider and permit other forms of assistance if it
arrives at the conclusion that this support is for the economic development of an area with an
exceptionally low standard of living and high unemployment, provided that it is used to
remedy a serious failing in the economy of a particular State, or assistance designated by the
Council at the proposal of the European Commission (via a decision adopted by a simple
majority).
These rules are an entirely new phenomenon which needs to be respected in housing policy.
This task is made all the more difficult by the act that these are rules on competition and free
trade which are applied de facto per analogiam in the field of housing. In the future, it will
therefore be necessary, especially for the EU budget period from 2007 to 2013, to find a
solution to the application of auxiliary rules for housing policy, even though housing policy
per se is not a subject of common Community policy.
The task of the State in housing, then, is to maintain a balance between the economic
efficiency of the housing market on the one hand, and social equity on the other. This
approach is respected in this concept of housing policy.
The Government acknowledges the significance of the market for the development of the
economy. The market itself does not handle the pressing social problems of society; a well-
planned, expedient modification is required by appropriate means to prevent the excessive
polarization of wealth and poverty. Market forces need to be guided by the State and by a
process of shared decision-making on the part of citizens in order to foster the best possible
conditions for life and to apply the principles of solidarity, social equity, and sustainable
development. The social state is a means to improve the quality of life of citizens. It focuses
on the prevention of neediness and is intended to stimulate the development of individuals
and society as a whole. It is a humanitarian institution which needs to be constantly
modernized in line with the changing conditions and requirements of the people. It fulfils
Aristotle's idea that the `purpose of the best state is the well-being of its people... The State is
a community of equals, the aim of which is the best possible life.'
Decent housing is a basic living requirement, but also an exceptionally costly affair that
frequently exceeds the means available to individuals and families. The State and
municipality must therefore create conditions to facilitate access to housing for all needy
persons, especially young families. The older generation must be given the guarantee that they
will not lose the roof over their head as a result of a cut in income. With this in mind, the
housing requirements of citizens from lower income brackets and socially needy sections of
the population will take priority.
No outcome of the spontaneous social process, including the market, can be described as fair
or unfair; the market as such does not act and cannot be held responsible for anything. Only
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specific entities, individuals, and institutions are active and responsible. The market is
dependent on many foreseeable circumstances and on the rules which affect market
functioning. The quality of the environment, along with its aspects of fair or unfair impacts, is
the result of activities which are permitted in this field by State institutions and which are the
State's responsibility. Rules which govern the market and determine how it will function may
be the cause of undesirable consequences of market functioning, and therefore it is reasonable
to expect that the State, as the market authority, will modify certain conditions related to the
way the market works by conceptual, purposeful means, using market-conforming
instruments. In various fields of the functioning of society, the requirement for the existence
of rules differs. The housing market is a specific market that needs rules and regulation.
Article 25 of the General Declaration of Human Rights stipulates that adequate housing is a
basic human right. In the declaration issued in connection with the UN's Habitat sessions in
Istanbul in 1996 and New York in 2000, the following provisions were added:
`Equal access to adequate, accessible housing must gradually be ensured for all
citizens and their families.'
In the European Housing Charter, this fundamental idea is developed and transformed
into a practical housing policy. An emphasis is placed on the fact that the high productivity of
housing construction is generated by the market. However, at the same time the market needs
to be reined in to ensure that social objectives are also met. `The basic goal of any housing
policy is to seek an optimal compromise between the open market and its regulation,' states
the Charter. If a consensus is reached in the above-mentioned opinions and recommendations,
the initial approach to finding a solution to housing issues has been found. Sometimes it is
enough to revise divided standpoints on specific proposals by reaching a consensus on this
concept, thus increasing efforts to find a rational solution.
2. Current situation in housing1
and housing policy
Links to the preceding concept
This concept follows up on the `Concept of Housing Policy' from 1999, which was updated in
2001. The main goal of the previous housing policy was to `create a situation where each
household can find the corresponding housing from the aspects of space, quality and price'
and to `increase the general availability, and especially financial availability, of housing for
the population'. In contrast to the conceptual plans of the 1990s, the housing policy priorities
have been expanded in the sense that
- `care of the existing housing stock and its optimal use' have been emphasized;
- a plan to support not only new construction, but also the acquisition of older (and hence
cheaper) housing has been formulated;
- the profile of the housing policy for selected groups of the population which are
disadvantaged in terms of access to housing has been raised.
1
Sources: SLDB 2001; Statistics of family accounts ­ Czech Statistical Office 2002; Attitudes
to housing ­ Institute of Sociology, Academy of Sciences, 2001; Social situation of
households ­ Czech Statistical Office 2001.
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At the same time, it has been stated that the fulfilment of the above-mentioned goals is
contingent on an `increase in the hitherto inadequate funding channelled into housing', the
development of `adequate economic, legal and other instruments, i.e. a reinforcement in the
intervention of the State', and the elimination of `existing external obstacles preventing the
desirable development of housing'.2
Current housing situation
According to the latest consensus, as at 1 March 2001 the housing stock comprised 4,366,293
residential units, of which 3,828,000 were permanently occupied, i.e. on average there were
427 residential units per 1,000 inhabitants and 374 permanently occupied residential units per
1,000 inhabitants. Of the 539,000 residential units not permanently occupied, 22% were
occupied on a temporary basis; however, in many cases these residential units were actually
used as permanent housing. Overall, then, there is no blanket housing deficit; nonetheless,
desirable localities (and Prague in particular) are characterized by immense disparity between
the relatively broad range on offer and the spending resources of many households. In this
respect, the main problem is the lack of adequate and affordable flats, i.e. the low financial
availability of housing, which hits socially weaker households hardest.
In the structure of the housing stock, all types of housing are sufficiently represented from the
aspect of the legal reasons for the use of residential units: 47% of residential units are
occupied by the owner of the house or flat; 17% are cooperative housing, and 29% comprise
rented housing (of which 17% are municipal flats, which are often privatized). Therefore
significant ownership transfers and changes in the structure of the housing stock are taking
place (seven per cent of residential units are classified as other, specific reasons for
occupation).
The average size of a permanently occupied dwelling in 2001 was 76 m2
total area and 49 m2
living area. The number of habitable rooms per permanently occupied residential unit was
2.72. The share of Category I units in 2001 was 88.5%; the share of Category II units was
7.5%.
The supply of housing stock to the population is gradually improving; the quality of housing
is also growing. Improvements in the housing situation can be attributed to the increasing
scope of new construction and to the modernization of the housing stock. The number of
residential units completed in a given year stands at more than 25,000 units per annum (in
2003 the figure was more than 27,000 units); the number of units commenced in a given year
is more than 36,000. There are several reasons for this positive development; the most
significant is the advances that have been made in mortgages, including favourable interest
rates, which have made owner-occupancy more accessible.
The acquisition cost of completed residential units depends on the technology used, the type
of construction, and the locality. In 2003, the average price per square metre of useful area of
a residential unit in a house was CZK 17,100; for flats in an apartment block the average such
value was CZK 21,600. Residential units in additionally built storeys or similar extensions are
much cheaper.
2
An overview of the most important intentions of the previous concept of housing policy,
including the extent to which they have been fulfilled, is given in the appendix.
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Property prices, which rose recently in anticipation of the country's accession to the EU and
also thanks to increased demand fuelled by low interest rates on mortgages and building
saving scheme credits, are gradually stabilizing. The main pricing factors are the wear and
tear of property, the size of the municipality, and - in Prague ­ the location of the property.
The rising interest in purchasing has led to a corresponding drop in demand for rented
property. Rents negotiated outside the scope of Government-imposed regulation are steadily
falling. The rates of the previously regulated maximum rent for Category I residential units
range from CZK 15.23 per m2
in municipalities with a population of up to 10,000 people, to a
highest recorded rate of CZK 37.07 m2
in Prague.
Expenditure on housing is a considerable burden for households3
. Expenditure on housing as
a proportion of the total final consumption of all households, which also includes imputed
rents4
for owner-occupancy (i.e. comparable on an international scale) came to 23.36% in
2002; the preliminary estimate of this indicator for 2003 is 23.51%. Of this estimated share,
42% comprises imputed rent (9.87% of the final consumption of households), 36% energy
(8.39% of final consumption), and just 14% actual rent in rented and cooperative units (3.25%
of final consumption).
There has been a long-term rise in housing prices, accompanied by a differentiation in
housing consumption. On average, consumer spending on housing currently places a slightly
higher burden on households living in rented units than in other forms of housing. Almost
37% of households consider their expenditure on housing requirements to be a large financial
burden; for half of households these costs are at an acceptable level; for just under 9% of
households, the payment of housing outgoings is not a problem at all.
The overwhelming majority of households (80%) are satisfied with their current housing.
Only six per cent of people living in towns and cities and roughly four per cent of people in
rural areas claim that they are not satisfied with their housing situation. The primary factors
identified as phenomena reducing the quality of housing are the insufficient size of the
residential unit, and the poor structural and technical condition of the unit. Occupants'
satisfaction with their own housing contrasts sharply with the high level of dissatisfaction
expressed with the general situation in the field of housing, i.e. dissatisfaction with the State's
housing policy. This discontent is most rife among those who are faced with the task of
finding their own housing. They are often young people who are forced into seeking housing
on the open market.
A particular problem is the growing group of people who are unable to secure or maintain the
housing they require even when current instruments of social and housing policy are applied.
Municipalities do not always make sufficient use of social services designed to help prevent
the loss of housing and to improve the ability of at-risk groups of households to maintain their
housing. Therefore, we are starting to see disadvantaged groups being squeezed out of the
reach of standard support instruments, a reinforcement of their social and spatial segregation,
and a corresponding expansion in certain socio-pathological phenomena.
3
The Government wields no influence over energy prices because they are in the competence
of the Energy Regulatory Office.
4
Imputed rents, or hypothetical rents, are an estimate of the consumption of housing
requirements for owner-occupied units.
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Another problem is the discord between the preferences of households and the supply of
housing available to them. This disequilibrium, which is also influenced by the discord
between the supply of housing ad the labour market, is expressed as dissatisfied demand for
housing in general, and is felt most keenly in the existence of the black market in rented flats
and the high level of market rent.
The most important changes that have occurred in the past few years are as follows:
- the ongoing privatization of the housing stock has enlarged the sector of owner-occupied
housing (approximately 7,000 Associations of Unit Owners have been established), as
well as the sector of cooperative housing (up to 15,000 new housing cooperatives have
been formed);
- the system used to finance housing has been developed, i.e. building saving schemes and
mortgage lending, including the related support instruments; the application of these
financial instruments to acquire housing or repair and modernize the housing stock has
risen considerably;
- the diversification of the housing market has continued; in particular, differences in the
situation on local markets have widened between large and attractive cities on the one
hand and small communities on the other;
- growth continued in the field of new construction ­ every year work starts on the
construction of more than 35,000 residential and more than 25,000 units are completed.
Current government housing policy
In the past few years, most of the elements of the administrative-based approach of
assignment have been removed in the housing policy to make way for instruments focusing
on the support of new construction, the repair of the housing stock, an increase in the
availability of housing for the population, etc., which are in line with similar instruments used
in developed European countries.
The legal framework of housing is relatively complex, fragmented, and ­ in some cases ­
outdated. The situation is complicated by the absence of certain important legal provisions,
the difficulty of enforcing the law, and the low legal awareness of the public.
The aim of this concept is to round off the full range of market-compliant instruments
compatible with EU rules, enabling all citizens, based on their capacity of higher or lower
participation, to draw on instruments for the acquisition of housing, and to ensure decent,
adequate low cost housing for those citizens who are not capable of such participation.
However, in the short-term concept, the difficult issue of gradually eliminating the
deformations in rented housing must be tackled so that it complies with standard European
free-market relations while ensuring sufficient protection for tenants, providing direct support
to the needy, and preventing senior citizens in particular from slipping into a situation of
material need.
The possibility of applying the Government's plans is aggravated by the unclear role of
municipalities in the field of housing. This fact causes problems in relation to tasks stemming
from the adoption of the European Social Programme and the appointment of common goals
in the fight against poverty and social exclusion, the fulfilment of which is binding on the
Czech Republic. Municipalities currently play a two-in-one role; on the one hand, they are
expected to maximum the profit from their assets with due professional care so as to generate
income for the municipal budget effectively, and on the other hand municipalities have been
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set the task of furthering the conditions enjoyed by their inhabitants, including housing
conditions. Assigning a flat to be rented by persons where there is a high risk that they will
not make due rent payments and other payments connected with the use of the flat could quite
clearly be viewed as conduct that contradicts the principles of due professional care. On the
other hand, municipalities are expected to focus their housing policy on those households
which are socially most disadvantaged in terms of access to housing. The search for a balance
between due professional care and the socially focused management of the municipal housing
stock is not clearly defined, and therefore municipalities are more or less left to prioritize one
or the other aspect. Municipalities are not obliged to provide assistance to groups of persons
who are at risk of poverty or social exclusion, and the State does not have the means to push
through the fulfilment of these tasks. Connected with this is the vague definition of the low
cost housing segment in the Czech Republic. This concept assumes that this role should be
assigned to municipalities, which can react to local conditions on the housing market and
foster the required conditions. In the future, not only socially focused housing stock, but also
various economy-efficient accommodation facilities that can help eliminate acute problems
should contribute to the way these social problems are tackled.
As for the basic framework of legal instruments for the provision of housing, the concept
anticipates that:
for citizens with an above-average income, instruments are available for them to
finance owner-occupied housing via mortgages,
for citizens with middle-of-the-road incomes, there are building saving schemes and
newly drafted rules for the construction of rented flats by housing cooperatives with
support from the resources of the State Housing Development Fund (this law is in the
legislative process),
For citizens with lower incomes, there is a newly designed sector of non-profit
housing provided by municipalities via non-profit housing companies (the legislative
process will be completed in 2005),
for citizens with low incomes and on the periphery of society, municipal flats are
constructed which draw on the resources of the Ministry for Regional Development
and State Housing Development Fund.
Support instruments (e.g. loans to young citizens) have been designed for the acquisition of
residential units available on the market.
The gradual liberation of the market in existing rented flats paves the way for a situation
where citizens who, for whatever reason, opt to remain in rented accommodation rather than
take on an ownership or co-ownership form of housing will be able to draw on a similar
range. Here, supply should reflect the possibility of luxury accommodation for the wealthy
and dignified housing for citizens in lower-income brackets.
Situation in individual housing sectors
The sector of owner-occupied housing accounts for approximately 47% of housing stock;
compared with other sectors, it is developing at the most dynamic rate, and includes not only
houses in rural areas and in towns, but also individual flats owned by natural persons. The
growth of this sector is promoted by the State; it relies on new construction, the conversion of
cooperative flats into private ownership, and the privatization of the municipal housing stock,
which passes into the ownership of the tenants. The acquisition of owner-occupied housing,
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especially newly constructed housing, is very costly when we consider the incomes of most
households, and therefore it is primarily the domain of households in medium and higher
income brackets who can draw on a mortgage. As a result of the deformations of the rented
sector, a number of medium-bracket households, especially beginner households, are 'forced'
to concentrate on the owner-occupied sector, although in the environment of a functioning
market in rented flats these households would be able to satisfy their requirements by means
of rented accommodation.
The cooperative sector, in large part comprising buildings built with `panel' technology
(high-rise buildings) and owned by former building housing cooperatives, accounts for
approximately 17% of the housing stock and functions without any major problems. Legal
paid transfers of membership rights and obligations make accommodation in cooperative flats
very close in form to owner-occupied housing (in larger towns in particular, the price of
cooperative flats is almost the same as privately owned accommodation, and therefore
cooperative flats are out of the reach of the middle-income households for whom they were
originally intended). New housing cooperatives are being formed as municipal housing stock
is privatized. This new segment is also functioning reasonably smoothly. The construction of
cooperative housing is not currently subsidized by the State; however this sector is due to be
revived by a new form of assistance, the legal framework of which has been presented to the
Chamber of Deputies for approval.
The private rented sector is very small, accounting for around just 12% of the housing stock,
and its functioning has been negatively affected by the consequences of the formerly applied
regulation of rent5
and certain elements of the current civil law regulation of residential rents.
The consequence of this is that there is a particular dearth of cheap rented accommodation for
lower-income households that cannot afford to participate financially in the acquisition of
privately owned housing and for whom the payment of market-based rent is too expensive in
larger, attractive housing estates. Construction in this sector, with the odd exception (e.g. loft
conversions), does not take place, mainly because of the powerful legal protection enjoyed by
tenants and because potential investors are more interested in privately owned housing
offering fast returns on their investments. Some flats newly built by developers which are sold
off to private owners in accordance with the Residential Unit Ownership Act are rented under
leases ­ usually for a fixed period of several years. Analyses indicate that 30%-40% of these
new flats are used for letting purposes, because some buyers invest into the purchase of flats
for reasons other than the satisfaction of their own housing requirements ­ these purchases
might be for `deferred' needs (i.e. for the children of the buyer), as a means of investing idle
funds, etc. Following the accession of the Czech Republic to the European Union, the share of
foreign buyers (juristic persons) who purchase new flats and offer them for rent has risen; in
most cases these are superior or luxury properties. The expanding range of new and older
rented flats on the open market is therefore pushing down the amount of the market rent by as
much as 30%, depending on the location (older flats in high-rise estates.
The sector of municipal rented flats accounts for approximately 17% of the residential
market, and also suffers from the effects of previous rent regulation and the civil-law
regulation of residential letting. The role of this sector has not crystallized; depending on the
decisions made by individual municipalities, and as a consequence of the renting policy they
apply, municipal flats play both a social and entirely commercial function. The residential
construction which takes place draws on massive support from the State, although so far the
5
The regulation of rent was abolished by the Constitutional Court in March 2003.
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result has primarily been `quasi-ownership' of housing built with financial participation from
the occupants. The focus of this assistance on households with defined incomes and on
persons who are disadvantaged for health, social, and other reasons, has existed only since
2003.
Key features of housing policy include the use of the housing fund, maintenance,
reconstruction and renovation with the aim of improving the quality of flats, their energy
efficiency, and the environment (improvements in the indoor environment ­ within flats ­ and
the outdoor environment, i.e. the humanization of housing estate areas, the urbanization of
towns, etc; a quality insulation can help save up to 40% of the cost of heating flats in a block).
This area has suffered from the lack of concept in the housing policy, the devastation caused
by regulation, the State's command economy between 1948 and 1989, and the centrally
controlled housing concept, all of which have resulted in the need for essential investments
in this sphere of up to CZK 500 billion (the reconstruction of high-rise buildings alone will
require at least CZK 350 billion). Funding is also required by the rest of the housing stock, as
well as by small rural settlements which have been considerably depopulated and which are
now used only for the recreation of city dwellers. However, it is thanks to the care of families
who are repairing older rural cottages for recreational purposes that a number of villages have
survived and been maintained. Attention should also be paid to `poor owners' who acquire
older, untended properties in the privatization process and who do not have the resources to
carry out modernization.
3. Mid-term concept of housing policy up to 2010
Starting points of the concept of housing policy
This housing policy concept covers the five-year period from 2005 to 2010. It assumes that,
over this period, the transformation steps launched at the start of the 1990s will be completed
and that a situation will emerge where the property market functions along the same lines as
in developed European countries. The Government's housing policy will also be adapted to
this change; the principal task of this policy will be to ensure the constant monitoring of the
housing situation and, based on ongoing analyses, to adjust the necessary legal and economic
framework, including justified market-reform support or regulatory instruments in order to
ensure the broadest possible availability of quality housing for the population
Experience gained in the developed countries of Europe indicates that, in order to ensure the
broadest possible availability of quality housing for the population, intervention by the State
in the property market is essential. Individual interventions must be carefully selected and
justified not only from the aspect of achieving high economic efficiency, but also from the
point of view of the necessary social equity and help for socially weaker or otherwise
deprived groups of the population. Maintaining a balance between high economic efficiency
and social equity is essential for the functioning of a market-oriented housing system that
enjoys the support and trust of citizens, investors, and other entities involved in this sphere.
The problem of the conflicting visions regarding the grasp of housing policy issues is actually
the differing view of equilibrium between high efficiency and social equity. Any talk of a
social state necessarily includes reasonable protection of disadvantaged (socially weaker)
groups of the population. In our country, this view is complicated by the transformation from
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a rigid, administratively controlled housing policy regime and by the problem posed by
groups of people who spent their productive life (and `planned' for their old age) in other
socio-economic and political circumstances and today have less of an opportunity to manage
their affairs with their own resources. A balance between efficiency and social equity is a
prerequisite for the development of a market-oriented housing system that enjoys the support
and trust of investors and inhabitants.
High efficiency means that housing construction ­ including flats ­ should exist at the lowest
possible price with a reasonable level of State aid, but under such conditions that the benefits
of State aid are not exploited, and so that this is not a highly de-motivating factor for groups
of the population that have an income sufficient to cope with unregulated, liberated (privately
owned or superior rented) housing. Efficiency requires a market environment and open
competition.
Social equity requires the formulation of social objectives for housing policy. These goals
cannot be achieved if the implementation of housing policy is not constantly monitored by
private and public entities and citizens. In its policy statement, the Government highlights the
social aspect of housing policy and care and assistance for young citizens and married couples
by means of a number of instruments designed to help them acquire housing. We can assume
that the social aspect will be an accompanying feature of all the proposed measures of a
legislative and non-legislative nature.
This balance also relates to the discussion on the necessity and need for State interventions in
relation to the possibilities of resolving the problem of rent.
Regulatory rules often relate solely to the letting of flats However, State intervention (which,
alongside other interventions, the regulation of rent is) is also reflected in the fields of
construction (subsidies for mortgages, the support of cooperative construction, tax and
depreciation incentives, etc.) and in fields of housing fund use (in the field of land policy).
The role of quality public administration and municipalities should also be respected.
Modern housing policy, which this conception aims to create, is based on three basic pillars.
- The first pillar is the creation of rules to govern entities active in the field of housing
(citizens, municipalities and regions, construction companies, estate agencies, financial
institutions, etc.). Primarily at issue here is the creation of a legal framework regulating
not only affairs connected directly with the ownership and management of properties, but
also related affairs such as the financing of housing and social aspects of housing.
- Another pillar is the creation of an adequate economic environment and system of support
and regulatory instruments, the aim of which is to bring the supply of housing more into
line with demand and as such to ensure the broadest possible availability of quality
housing for the population.
- The third pillar is the `social doctrine', which is the basis for the creation of measures
focused on citizens who need State assistance to ensure they have standard housing. State
intervention in this field has the form of direct social benefits, the offer of affordable
rented housing, and social services.
The gradual development of the above-mentioned approach to housing is contingent on the
clarification and acceptance of roles played by individual entities active in the field of
housing.
12
- Primarily at issue here are citizens, for whom the acquisition of housing through their own
resources must be a priority.
- Then there are diverse entities that offer or mediate housing (building companies,
developers, estate agencies, non-profit organizations, etc.); for these entities, a suitable
economic environment must be created so that they are interested in this field and offer
housing, or services connected with housing, at a sufficient volume and quality.
- Ultimately, there is the public sector, especially the State, which creates the corresponding
legal and economic framework and intervenes in the housing market to the extent that it
increases the availability of quality housing for the population.
The division of competences among the individual levels of public administration is also
important, i.e. a clear specification of the role of the State, regions, and municipalities in the
field of housing is also required. The approach of municipalities (as autonomous territorial
units) in particular determines whether the created legal and economic instruments will be
used and whether the set targets will be reached. In this respect, the Government will be more
thorough in its attempts to clarify the competences of individual territorially administrative
units. A key role will be played by the centre, which, like now, will be responsible for the
formation of a legal and economic framework for housing, and for the conception and
financing of supporting economic instruments6
. The role of municipalities will be stressed,
because these are municipalities which can best influence the situation on local markets in
residential units and which are responsible for the development of their territory. The
possibility of the involvement of regions in the field of housing is left up to them; any steps in
the field must comply with the goals and plans of the national housing policy. It is assumed
that the role of the regions in the field of the Government housing policy will focus primarily
on mediation, monitoring, and the provision of information. The role of the regions is
significant as regards supervisory powers in the field of the housing policy of municipalities.
The Ministry of the Interior is currently preparing methodology that will result in the more
effective performance of this oversight by the regions.
Basic plans of the concept of the housing policy
From the point of view of citizens, the principal aims of housing policy are:
- To make housing for the public more affordable,
- to increase the supply of housing, especially via the support of new construction,
- to increase the quality of housing, in particular by helping owners to manage, maintain,
repair, and modernize the housing stock.
- to ensure the constant functioning of instruments available to most income groups, the
ongoing monitoring of their effectiveness and efficiency, and any necessary corrections,
- to apply the rules of the EU common market, especially conditions regarding the
compatibility of State aid.
The fulfilment of the above-mentioned goals will be supported in the legal field by creating a
quality, coherent legal framework, and by efforts to enhance the legal awareness of the
population and improve the enforceability of the law.
6
`An analytical study focusing on the distribution of powers in the field of housing policy
between the central level of public administration, regions, and municipalities'; material
discussed by the Government in June 2001, `Proposal for the distribution of powers in the
field of housing policy', material discussed by the Government in May 2002.
13
In order to achieve this, ancillary economic instruments will continue to be used that are used
to bring supply and demand for housing closer together; these instruments will be similar to
those used in developed European countries. The register of existing instruments will be
adjusted to cover all groups of the population that need State aid in the field of housing.
During the finalization of the register of ancillary instruments, the Government will respect
the economic possibilities of the State, including the guidelines stemming from the reform of
public finances, and will strive to improve their effectiveness and expediency. Improvements
in the situation, especially in the field of care for the existing housing stock, will also be
encouraged by the monitoring and revision of the requirements of the European Union related
to technical standards, which in some cases unduly aggravate the situation of housing stock
owners.
The most important tasks of housing policy for this period will include:
- Ensuring an adequate supply of affordable rented housing for households in the medium
and lower income brackets.
- An emphasis on the use of the existing housing stock, preservation, reconstruction and
renovation, with a stress on improvements to the quality of residential units, including
their energy requirements and the environment.
- The rounding-off of the legal framework of housing, especially via the new codification of
private law, i.e. the Civil Code and Commercial Code, which will intervene significantly
in many areas which are currently regulated by special laws and which will have to be
subsequently amended.
Plans related to the individual housing sectors
Privately owned sector
The Government will accommodate the rising interest among households in the acquisition of
privately owned housing. The trend of a gradual increase in the scope and significance of
privately owned housing corresponds to the situation usual in most developed European
countries. The sector of privately owned housing, composed of houses and flats, will expand
smoothly primarily by means of new construction and also by means of the privatization of
the housing stock. Households with medium and higher incomes, who can finance a mortgage
or other form of credit, will focus on the acquisition of privately owned housing. In addition,
rural households, including those with lower incomes, will continue to be a specific group of
users of privately owned housing; for this group, housing in their own house is a typical way
of life. The smooth functioning of the privately-owned sector, and specifically its section
comprising flats as units privately owned in accordance with the Act o the Ownership of
Residential Units, will be supported by new legislation. The basic instrument to support the
acquisition of privately owned housing will continue to be a tax allowance comprising a
reduction in the basis for the calculation of income tax on interest from credits used to acquire
housing. Already existing soft loans and interest grants for mortgages intended for young
people up to the age of 36 will help increase the availability of privately owned housing.
Cooperative sector
The Government will support the construction of cooperative flats, which enjoy a long-
standing tradition in the Czech Republic. This plan is based on hitherto experience indicating
that there is a road range of potential users of cooperative housing here, i.e. households with
medium incomes that can make a financial contribution to the acquisition of housing and are
14
capable of paying rent, but that do not have sufficient income to finance privately owned
housing via a mortgage. Support for the construction of cooperative flats will be provided as
of 2005 on the basis of the `Act on support for the construction of cooperative flats out of the
State Housing Development Fund, and on an amendment to certain laws', the draft of which
was approved by the Government in October 2004. In connection with the preparation of new
legislation on cooperative flats in the Commercial Code, and in connection with the
legislation on cooperative flat rent in the newly prepared Civil Code, the position of
cooperative housing will gradually be crystallized (from the aspect of current legislation,
cooperative housing is a type of rented housing, but in practice it has many features of
privately owned housing). Under European regulations, housing cooperatives can only be
supported in accordance with the de minimis principle (provided that the same assistance is
not provided to juristic persons). Therefore the only way of supporting cooperative housing is
to provide de minimis aid in accordance with the amended bill on the support of the
construction of cooperative flats. Based on the expected amount of State aid, it will be
possible to grant State aid to one cooperative for the construction of 12-15 new flats in a
period of three years.
Private rented sector
The Government anticipates the gradual revitalization of this sector; as is common in many
other countries, this sector will offer housing to persons requiring mobility and flexibility in
the field of housing, to persons seeking short-term solutions to their housing situation, and to
persons who are seeking quality housing with the corresponding services and do not want to
be `encumbered' with obligations connected with the exercise of proprietary rights. The
gradual promotion of this function of the private rented sector will be connected with a new
concept of renting policy and with an amendment to the legislation on residential letting in the
Civil Code. Contractual rent, corrected in cases of disagreement of the contracting parties by
the comparable rents common in the place of letting which are to be applied in this sector,
will be produced gradually with respect for tenants who currently occupy flats in the buildings
of private lessors.
Municipal rented sector
In the upcoming period, the Government will seek to ensure that the role of the municipal
housing stock is clarified, especially in relation to the tasks stemming from the Municipalities
Act. The plan is for municipal rented flats to be used primarily to fulfil the public interest, i.e.
to be used in particular by those citizens who are unable to acquire housing on the open
market. The steps which will be taken in this field will, as in the case of the private rented
sector, be connected with a new approach to rent and with an amendment of legislation on the
renting of flats. In these respects, efforts will be channelled into ensuring that the municipal
housing stock is used as efficiently as possible and that the financial management of this
housing stock does not report a loss. The current municipal housing stock, part of which will
be privatized at the discretion of individual municipalities, will be complemented with new
construction supported by the State. The provision of grants socially closely targeted, which
allow for the construction of municipal flats not only for persons and households with defined
incomes, but also for those who are disadvantaged in access to housing, not only due to low
income, but also as a result of their state of health, age, or other unfavourable living
circumstances (`subsidized housing'), will continue. In addition, new ancillary measures will
be created that will enable municipalities to contribute to the construction of rented flats for
medium-income layers of the population (see non-profit rented housing).
Non-profit rented sector
15
The aim of the non-profit rented sector, which the Government will do its best to establish, is
to ensure a supply of affordable rented housing, especially for households which are not
capable of contributing financially to the acquisition of their housing. The development of this
type of housing is contingent on the creation of a completely new law which will regulate not
only the provision of assistance required to construct and provide housing, but also (and
mainly) the status and activities of entities which build ad provide non-profit rented housing.
The providers of non-profit rented housing will be juristic persons respecting the principles of
general benefit; municipalities will contribute to their activities, for example by provided
invested land. The support of the construction of these rented flats will be higher than with
cooperative housing, which is intended for households capable of participating financially in
the acquisition of housing.
Plans in the field of the financing of housing and ancillary economic instruments
The starting point used by the Government is the opinion that one of the conditions for the
fulfilment of the goals of the Government's housing policy is the existence of a developed,
well-functioning system for the financing of housing, the core element of which will be
mortgages and building saving schemes. The functioning of this system will continue to be
supported by means of balanced legislation and economic instruments in the form of
contributions to savings, tax allowances, and interest grants. The application of private funds
from these and other resources, including the savings of citizens, will continue to be
purposefully complemented with various support instruments financed primarily out of the
Government's budget resources and the State Housing Development Fund. Public funds will
mainly play a supplementary and motivating function n cases where the given field is not
interesting for investors, or cases where the affordability of housing for the population must
be improved with financial resources. During the application of this funding, the Government
will respect economic possibilities, including restrictions stemming from the reform of public
finances, and the guidelines stemming from R's membership of the EU (the possibility of the
provision of State aid exists only in cases where the effects of competition are not
compromised).
In this respect, the reinforcement of the role of the State Housing Development Fund is fully
expected as another relatively independent source of funding for the implementation of the
plans of the State housing policy. The Fund must gradually work increasing private resources
and must only stimulate their use for investments into housing from public funding. Measures
will be prepared to reinforce their long-term financial stability, secure a regular income, and
for targeted orientation on the provision of returnable forms of aid. Based on an analysis of
individual instruments, the shift of individual instruments from the Ministry for Regional
Development to the State Housing Development Fund will be considered.
The existing register of ancillary instruments used by the State to support housing will be
adjusted to increase its effectiveness and to ensure the fulfilment of the plans formulated in
the Government's policy statement and in the concept of housing policy. Economic
instruments will continue to focus on supply and demand with the aim of improving the
availability of quality housing for the population.
In the field of supply, assistance will continue to be channelled into housing construction, the
acquisition of housing, repairs, reconstruction, modernization of the housing stock and the
revitalization of parts of housing estates. I the field of demand, the main task will be to
16
maintain suitable housing via increased household income, i.e. via direct social benefits, and
to reinforce the purchasing power of households in relation to the acquisition of housing.
Support for the construction of flats will be provided in the form of soft loans, interest grants
for commercial purposes, investments grants, and, in exceptional cases, in the form of a
guarantee. Investment grants will be used primarily to secure housing for low income and
otherwise disadvantaged households.
During the provision of assistance for the maintenance and improvement of the existing
housing stock, the Government will work on the basis that current repairs are to be funded out
of the funds of building and flat owns, whereas improvements in the quality of the existing
housing stock (large-scale repairs, modernization, insulation) deserve State aid. Support
focusing on the improved quality of housing stock will gradually be expanded to the whole of
the housing stock irrespective of the technology and material used during construction, but the
emphasis placed on tackling problems connected with high-rise buildings and mono-purpose
high-rise estates will remain.
The register of ancillary instruments will gradually be adjusted so that it takes better account
of the differentiated possibilities of the individual groups of the population when ensuring
appropriate housing, i.e. in particular, it will allow for the provision of more assistance to
those households which are unable to secure appropriate housing through their own resources:
- Households with higher incomes, where a focus is expected on privately owned housing
will be supported, as now, by means of tax allowances connected with the payment of
mortgages and other credits used to secure housing. If the situation on the housing market
requires, interest grants reducing the instalments of the mortgage will be provided. The
possibility of applying State-supported building saving schemes will remain.
- Medium-income households, which will focus primarily on cooperative and rented
housing, will find it easier to acquire suitable hosing by means of soft loans and grants
provided to housing cooperatives and other entities who build and provide this housing.
State-subsidized building saving schemes will continue to provide assistance to these
households,
- Lower-income households, which cannot participate financially in securing their housing,
and which cannot afford to pay costly rent, will be able to draw on the advantages of
municipal rental housing, whether already existing or newly built with the support of State
subsidiaries. The development of non-profit rented housing for the above-mentioned type
of households will be made possible by a completely new law.
Besides the above-mentioned basic target groups, special assistance will continue to be
provided to those persons whose possibilities of securing their own housing are aggravated ins
some way or other. The beneficiaries of the special assistance will be.
- Young people for whom the housing situation is encumbered by the combination of the
start of their career and the starting of a family.
- Persons who have special needs in the field of housing determined by their age, state of
health, etc, or whose possibilities of securing appropriate housing are encumbered by
deteriorated social circumstances in their live to date. These people may use affordable,
support housing, the construction of which will continue to include support via State
grants conducive on the provision of the relevant social services.
In the scope of the prepared legislative changes in social policy (the Social Services Act, the
Subsistence Level Act, the Act on Material Need, the amendment to the State Social Welfare
17
Act), instruments will be propose which positively influence the solution of housing problems
among households that have found themselves in a difficult social situation. Two social
benefits will help to alleviate the burden of housing expenditure. A housing contribution from
the system of state social welfare will be conceived and provided not only in relation to
income, but also in relation to housing expense. If this state benefit is not enough, an extra
housing payment should be provided in accordance with the new Material Need Act by
municipalities in their separate competence in cases where the municipality fails to find
another adequate solution for the citizen. The proposed measures in social policy7
will not
affect the residential market, the mobility of citizens in search of work, or the status and
reliability of municipalities in housing policy.
Plans in the field of the legal framework of housing
The most important task in the legal field will be the recodification of the Civil Code and
Commercial Code, which will be reflected in other legal provisions regulating housing. The
Government's efforts in the monitored period will focus on the creation of new legislation in
the following areas:
The Government will strive to resolve issues of rent from flats, including the form of
regulation, because this is an economic instrument with significant impacts on the functioning
of the residential market. The new legislation on rent will be proposed in relation to the
expected functions of individual parts of the rented property sector on the residential market.
The preparation of the new bill will be preceded by an analysis of the situation in the rented
property sector and the related drafting of a General Principle.
In the framework of the recodification of the civil Code, the institution of protected rent will
be preserved, but the mutual status of tenants and lessors will be more balanced compared to
the present situation. The aim of the prepared changes is to allow for the flexible functioning
of the market of rented housing, the legal essence of which lies in the temporary letting of a
residential unit for payment while respecting the mutual rights and obligations stemming from
this relationship. The changes will mainly relate to the transfer of a lease in the event of the
death of the tenant, the exchange of the flat, the substitution of a flat, and the termination of
the lease of a flat by notice served by the lessor, i.e. institutions which restrict the owner in the
disposal of his property and enable for the prolongation of the negative consequences of the
previously applied socially non-targeted rent regulation.
A new law will be prepared regulating the ownership of flats, the essence of which, like now,
will be a dualistic concept where the owner of the residential unit is also a co-owner of the
communal areas of a building. The new legislation will clarify the status, material essence,
function, and activities of associations of unit owners and their bodies, will define the
institution of the administrator, and will allow for the removal of obstacles stemming from
present legislation that have complicated the application of the Residential Unit Ownership
Act in the long term.
7
The General Principle of the Material Need Act and the principles for the amendment of the
Subsistence Level Act were approved by the Government under Resolution No 138 of 2
February 138.
18
In the scope of the prepared recodification of the Commercial Code, there is a proposal for the
new regulation of the legal framework of housing cooperatives so that the core of their
activities lies in seeing to the housing requirements of members, and so that their activities are
restricted to the extent that housing cooperatives can be a risk-free beneficiary of State aid for
the construction of rented flats. For the smooth functioning of cooperative housing, new
legislation on the letting of cooperative flats is also required, because at present there is a
disparity here between the legislation, which views this housing as rented housing, and the
reality, where cooperative housing is treated in much the same manner as privately owned
housing.
A legal framework will be created which will allow for the emergence and development of
rented housing, which will function on a non-profit principle and will be intended primarily
for households with medium and lower incomes. The essence of the new legislation will lie in
defining the status and activities of selected juristic persons, which will respect the principles
of general benefit and will build and provide (with the assistance of public funding) available
rented housing.
Estimate of financial demands on the national budget in 2005 to 2010 in millions of
CZK:
2005 2006 2007 2008 2009 2010
`Housing Development Support'
programme
1313 1350 1340 1340 1340 1162
Mortgage support 400 244 193 165 145 130
Total 1713 1594 1505 1505 1485 1292
4. Short-term implementation programme for 2005-2006
The basis of the short-term implementation programme is the Government's policy statement,
in which the main aim of housing policy is formulated ­ the `creation of the requirement
where every household can find and maintain affordable housing on the housing market at the
corresponding quality'. The short-term implementation programme is also based on the
Action Plan of the Ministry for Regional Development, which embodies the most important
tasks for the period up to 2006.
In terms of the demands on public finances, the short-term implementation programme
respects the mid-term expenditure framework and is based on documentation that has already
been approved by the Ministry of Finance.
The basic goal of the short-term implementation programme is to round off the legal and
economic framework for the field of housing, which will improve the situation in the field of
housing and will allow for the gradual conversion to the target situation ­ the standard
housing policy implemented in developed European countries.
The specific goals of the short-term implementation programme are as follows:
- To pass, in Parliament, the bill on support for the construction of cooperative flats from
the State Housing Development Fund and on an amendment to certain laws, and to
commence the construction of cooperative flats. In connection with the adoption of the
above-mentioned law, it is necessary to prepare an implementing regulation ­ a
19
government decree appointing the amount and procedure for the provision of assistance
for the construction of flats and other details as appropriate.
Deadline: The estimated date of effect of the law is 1 July 2005.
- To raw up the articulated wording of the Residential Unit Ownership Act, based on the
Government-approved General Principle.
Deadline: The draft articulated wording will be submitted to the Government during 2005.
- To assess the disparities of the existing levels of rent based on the processing of
information ascertained via ordinary investigations of consumer prices, carried out for the
purposes of monitoring inflation by the Czech Statistical Office and expanded to include
the one-off identification of selected characteristics of flats. The results of the analysis
will provide a basic overview of the relationship between the level of freely negotiated
rent and other characteristics of flats or localities, and the relationship between the level of
previously regulated leases and the level of open (unregulated) leases.
Deadline: A statistical survey will be conducted in the first quarter of 2005.
- To prepare a draft general principle of an act on rent from residential units and, based on
the approved general principle, to prepare the articulated wording of the act on rent from
residential units. The general principle counts on a transitional period, during which the
existing information system, laid down under Regulation No 540/2002 and its Annex No
17, stipulating market property values, that can be used for the calculation of rent by
selecting a suitable coefficient. This indicator has a market variable and is not just an
administrative decision. It guarantees a reflection of local conditions and makes it possible
to switch to economic costs of rent on most of the territory. The exceptions of the large
cities will be resolved by the gradual relaxation of the difference between the actual and
the newly ascertained rent. The bill is presented de facto together with this concept.
Deadline: The draft general principle of the law will be presented to the Government in
March 2005.
- To prepare a draft general principle that defines the conditions under which it will be
possible to provide assistance for the construction of rented flats to selected juristic
persons respecting the principles of public benefit. Based on the general principle, to
prepare a draft articulated wording of the law.
Deadline: The draft general principle of the law will be presented to the Government in
March 2005.
- To analyse, in cooperation with the Ministry of Defence, the Ministry of Justice, and the
Ministry of the Interior, the situation regarding the regulation of service properties and the
housing requirements of armed components, and based on the analyses, to discuss daft
solutions to the situation at individual ministries.
Deadline: By 2006.
- To assess the compatibility of the assistance provided in the field of housing with
Community law from the aspect of the principles of the common market, and the non-
disruption of open competition. Based o this assessment, to modify the existing support
instruments.
Deadline: On an ongoing basis.
20
- To prepare a long-term overview of the activities of the State Housing Development Fund,
to prepare long-term instruments for the support of investments into housing and into the
technical infrastructure as stimulation of the flow of private funds. At the same time, to
define the mutual coordination of instruments implemented by the Ministry for Regional
Development and the State Housing Development Fund.
Deadline: The draft overview of activities will be prepared by the end of 2005.
- To prepare a proposal to keep to the reduced VAT rate for construction work for the
purposes of housing, especially in relation to situations regarding the construction,
reconstruction, modernization, and repair of flats, including investments into residential
units in non-residential buildings.
Deadline: The proposal will be prepared by the end of 2005.
- For the purposes of the possible application of a reduced VAT rate for construction work
of a social nature, to define the term `low cost housing' as of 1 January 2008.
Deadline: The proposal will be prepared by 2006.
- To prepare an analysis of the role of municipalities in the field of housing and to propose
changes in the Municipalities Act and in other legal regulations so that the Czech
Republic is capable of fulfilling its obligations stemming from membership of the EU and
from the National Plan of Social Inclusion. Primarily at issue here is a housing solution
for persons who are disadvantaged by their state of health, age, or the social circumstances
of their lives and who are in danger of poverty and social exclusion.
Deadline: A legal analysis, accompanied by the relevant proposals, will be drawn up
during 2005.
- To implement a project entitled Spatial and Social Segregation focusing on an analysis of
the causes and consequences of territorial segregation and the possibilities of preventing
this segregation. The organization of an expert working seminar/conference intended for
the representatives of local government and the implementation of research, the results of
which will be used for the preparation of systemic measures in various fields of the
material competence of the Ministry for Regional Development.
Deadline: The seminar and conference will be held in 2005; the research will be
completed in 2006.
- To continue the provision of assistance intended for the acquisition of housing by young
married couples and persons up to the age of 36 who care for children.
Deadline: On an ongoing basis.
- To commence the provision of grants for the construction of technical infrastructure in
accordance with a Community regulation8
based on the de minimis rule, in housing
development areas owned by municipalities, especially in the rural areas, and to provide
support only to municipalities where a sewage system and water mains supply system
have been built. In this respect, to define the term `technical infrastructure' with regard to
the ecological sustainability of new construction.
Deadline: Notification of grants of 15 February 2005.
8
Commission Regulation (EC) No 69/2001 of 12 January 2001 on the application of Articles
87 and 88 of the EC Treaty to de minimis aid.
21
- To launch negotiations, without undue delay, on the possibility of using the European
Union's Structural Funds for housing. With regard t the fact that so far housing has been
excluded from the areas for which the Structural Funds can be used, it is possible to
propose, preferably by agreement with other new Member States of the EU, a discussion
on the modification of the Structural Funds to repeal this absolute ban, or to permit an
exemption, e.g. for the segment of high-rise hosing estates where there is a real danger of
social exclusion. By regenerating the large high-rise estates in order to prevent their
stigmatization, it is possible to prevent the accumulation of `problem' groups of
inhabitants and therefore the consequent high demands on support in the social and safety
spheres.
Deadline for the submission of proposals to the European Commission: 31 March 2005
- To find solutions to neglected maintenance, especially of high-rise blocks. To assess the
results of discussions by experts from the State Housing Development Fund, ČMZRB, the
Ministry of Industry and Trade, and the Ministry for Regional Development.
Date for the start of negotiations: In the second half of 2005.
- In the sphere of enlightenment, information, and methodological assistance, continue the
organization of consulting days and contributions to the activities of nongovernmental
organizations from the budget chapter of the Ministry for Regional Development, and to
arrange the necessary basic methodology for the implementation of new laws or
regulations.
Deadline: On an ongoing basis.
22
23
Appendix 1 - 4
24
Appendix No 1
Principal objectives formulated in the Concept from 1999 (2001) and the
fulfilment thereof
Specific plans were formulated which primarily related to the legal framework of housing and
ancillary economic instruments. The extent to which the most important of these plans were
fulfilled is described below:
Elimination of problems preventing the optimal functioning of the rental sector
Primarily at issue here was the termination of the regulation of rent and the adoption of a law,
based on which rent would be set by agreement, and any increase in the rent would be
facilitated via the principle usual at the given location, and the amendment of legislation
regarding letting relations with the aim of balancing out the status of the two contracting
parties more. The social consequences of the new regulation of rent should be tackled by
means of a new rent contribution. The regulation of rent was repealed in 2003 based on a
ruling delivered by the Constitutional Court; however, no new law on rent has been adopted
because the necessary expert and political consensus has not been reached yet. The necessary
changes have not been achieved in the field of letting law either; the planned amendment has
been dropped because of the prepared recodification of the Civil Code, although this
recodification has not et been implemented. As a consequence of these circumstances, the
negative consequences of the former system of regulation and unbalanced letting relations
remain in the field of rented housing; increases in rent, which is a matter solely of agreement
of the contracting parties and in most cases is blocked. Changes in the field of direct social
benefits for housing will be made in connection with conceptual changes related to the
subsistence level and the whole system of social benefits (the general principle has already
been drafted).
Improvement in legislation regarding the ownership of residential units and cooperative
housing: Amendments to the Residential Unit Ownership Act which have been adopted and
which are aimed at resolving problems connected with the functioning and, in particular, the
management of blocks containing owner-occupied flats have proven to be inadequate, and
therefore a decision was ultimately take to draw up a new law, the general principle of which
will be presented to the Government by the end of 2004. Preparations for new legislation on
cooperative housing, with the aim of releasing housing cooperatives from the framework of
commercial companies, in which they are currently classified, have been postponed, with
reference to the prepared recodification of commercial law (not yet completed).
Creation of the legal framework enabling the emergence and functioning of non-profit
rented housing: The Government's bill on public-service housing cooperatives, based on the
principle of a separate juristic person, was rejected by the Chamber of Deputies. In response
to the reservations raised in connection with the rejected bill, a decision was made to
implement the plan progressively, initially by means of the support of membership-based /
cooperative housing, and then by means of legislation related to purely to letting per se ­
`non-membership-based' rented housing. Legislation on support for the construction of
cooperative flats was approved by the Government in 2004; the general principle of the legal
framework for the construction and provision of purely rented flats will be prepared in 2005.
Creation of a non-budgetary fund intended for the financing of housing: This plan as
realized by the adoption of a law on the State Housing Development Fund. Since the
establishment of the State Housing Development Fund (i.e. since 2000), its budget has been
25
used to finance the most diverse support programmes focusing on housing construction,
repairs to the housing stock, etc. The subsequent plan to amend this law so that the Fund
concentrated primarily on the provision of returnable forms of support and so that its
relationship to the Ministry for Regional Development was made clearer has not yet been
carried out.
Improvement in existing support instruments focusing on new construction, repairs, and
modernization of the housing stock, etc.: These plans were realized in part insofar as there
was an increase in support for the removal of neglected maintenance, repairs, and
modernization of high-rise buildings, and a programme was set up to promote the
regeneration of high-rise housing estates; another factor has been the cancellation of certain
inadequately used or ineffective forms of support, and the creation of new forms of support.
However, attempts to increase the general effectiveness of support instruments have failed.
Creation of new instruments focusing on the support of young people seeking to acquire
housing: In 2002, two Government decrees were adopted, based on which young people up to
the age of 36 are granted soft loans for the construction of owner-occupied housing and
subsidies to cover interest on mortgages for the purchase of older privately owned housing. In
2004, a new Government decree was adopted that regulates the terms and conditions for the
provision of low-interest credit for young married couples and young families up to the age of
36 to purchase a new or older property, including cooperative flats.
Creation of new instruments focused on the construction of housing for people with
specific requirements in the field of housing which are related, for example, to age or the
state of health of these persons, aggravating social circumstances of their lives, etc.: In
2003, a new programme was created under which municipalities receive grants for the
construction of `supported housing' for the above-mentioned target groups of the population.
In the same year, another form of grant was created which focuses on the construction of
municipal rented flats for households on limited incomes.
Clarification and enforcement of the role of municipalities in the scope of the
amendment to the Municipalities Act: This plan has been realized only partially. The
amendment to the Municipalities Act from 2000 contains a provision in which it is stipulated
that the task of the municipality is to take care of the needs of citizens, including housing
needs, but the problem of the actual role of the municipality in the field of housing was not
resolved by this provision.
26
Appendix No 2
External housing policy framework
In 2003, the gross domestic product per capita was approximately 72.5% of the level of the
EU-25. The dynamism of economic performance is expected to continue. Estimates of the
relative amount of GDP in relation to the EU-25 stand at 75% for 2004 and 77% for 2005.
Following the lowest ever interest rates since the start of economic transformation in 2003
and 2004, there should now be gradual ­ though not fundamental ­ growth. The low interest
rates have been reflected in the high level of long-term debt taken on by households, not
only in the case of investments, but also consumer loans and lease contracts, which leads to
concerns as to whether households will be able to repay this credit in the future.
Following the exceptionally low growth in consumer prices in 2003, the pace of the
inflation rate is now gradually rising, inter alia as a result of the necessary harmonization
adjustments in the field of indirect taxes. Estimates of the average inflation rate are 2.9% for
2004 and 3.3% for 2005, i.e. a moderate price growth; in the long term, the influence of
administrative measures (regulated or physically guided prices) on price growth should be
gradually reduced.
In 2002, the price level of the final consumption of households in the Czech Republic came
to approximately 53.1% of the average price level in the EU, which is less than the difference
in the economic level. The reason for this is the lower cost of domestic resources and the
lower level of wages. The ongoing price regulation and historically formed distortion in prices
are the reasons for the fact that our prices lag far behind. The approximation of price levels is
limited by the competitive capacity of the economy in the international comparison.
Property prices rose recently, driven by demand generated in anticipation of the country's
accession to the EU and also thanks to low interest rates on mortgages and building saving
scheme credits. Following accession to the EU, the `expectation factor' disappeared; in the
upcoming period we expect property prices to stabilize, with a deepening in the regional
differentiation.
Construction production in the last few years has risen considerably (the volume of
construction work in 2003 was 8.9% higher than in 2002 in real terms). The ongoing growth
recorded by construction in 2004 was mainly related to work on the construction of the
transport infrastructure, new property development projects for administrative centres, and
housing. Construction production rose considerably in a situation there was also a significant
rise in labour productivity in construction production.
Labour productivity measured as GDP generated per employed person in purchasing power
parity was estimated at 54.7% of the EU-15 level in 2003. The rise in labour productivity in
Czech industry and structural changes in demand for the workforce have had the detrimental
effect of pushing up the rate of registered unemployment, which stands at around 10%.
The average monthly nominal wage in 2003 was CZK 16,917. Monitoring of the
differentiation in wages indicates that in 2003 the most frequent wage was between CZK
15,000 and CZK 16,000. In the past, the wage differentiation broadened primarily as a result
of above-average increases in the highest wages; now the differentiation is becoming larger in
middle-of-the-road wage brackets too. In 2003, the median value of wages was CZK 16,707.
According to Mikrocensus 2002, the net financial income of an economically managed
household in 2002 was an average of CZK 19,338 per month. Twenty-two per cent of
27
households had a net financial income of below CZK 10,000; 11.2% of the population lived in
these households (these tend to be single-member households). A net financial income of
CZK 10-20,000 was reported by 40.9% of households, or 39.8% of the population, and an
income of CZK 20-25,000 was recorded by 13.6% of households, or 17% of the population.
Overall, then, 76.6% of households (68% of the population) had a net financial income of up
to CZK 25,000.
We can assume that there will be a rise in the differentiation of income and wages, which is
still low compared to European countries. This development, which will occur as a result of
increased employment in sectors with high demands on qualifications and the slower growth
of social benefits compared with wage rises, will be reflected in the faster process of social
differentiation in the sphere of housing. The Czech Republic features among those countries
with a low poverty rate. Although poverty in the Czech Republic has become slightly worse
in the last few years, it is still below the average for the EU-25. Compared with other states,
however, the Czech Republic has a high concentration of persons only just above the
poverty threshold. In this respect, we can expect a continuation of the process of forcing
disadvantaged groups of persons out of eligibility for housing policy support instruments,
accompanied by a deepening of their social and spatial segregation.
In 2003, the total number of inhabitants rose to 10,211,000 as at 31 December for the first
time since 1995. The cause of this was the surplus in the balance of foreign migration.
Inhabitants are mainly deserting towns with a population of more than 10,000.
The demographic structure of the population is affected considerably by the wave of a
higher birth rate in the 1970s. The then extraordinarily sharp rise in the birth rate (as a result
of the accumulation of the influence of those born in the strong post-war years who reached
adulthood at this time, compounded by measures geared towards raising the birth rate), is still
felt in the sheer number of people from the generation of young people born between 1971
and 1979. The positive influence of this phenomenon on the economy at present ­ this
generation is now entering the age of economic activity ­ has also placed strong pressure on
the housing market. As those in the older age groups live longer and new trends have emerged
in the lifestyle of younger age groups, the result is a significant downsizing of the average
household. Given the absolute reduction in inhabitants compared with the start of the 1990s,
there has been a rise in census households, especially households comprising individuals. The
consequence of this has been a `deterioration' in the indicator of the level of residential units
occupied by census households (89.6 permanently occupied residential units per 100
households).
Demographic trends ­ the total fertility rate remains low. In the longer term, there is
expected to be a slight increase. As a result, the basic characteristic of future developments in
the age structure will be an ageing population. The process of population ageing, with a
sharp fall in the numbers of the youngest members of society due to the low birth rate, is
speeding up (the number of people aged 80 or older is rising ­ those born in past years of
relatively high birth rates are growing older and people are living longer). According to
projections by the Czech Statistical Office, by 2010 no significant change is expected in the
number of inhabitants; by 2050 the number of people over the age of 659
should double. The
number of inhabitants in the highest age group will grow fastest; the number of inhabitants
over 85 years old should increase to as much as five times the current level. According to
figures from the Population and Housing Census, in 2001 85% of all Czech inhabitants lived
in families. The predominant type of household remains the complete family, although the
9
Projection by the Czech Statistical Office from 2003.
28
number of such households is steadily declining. The long-term trend is for an increase in the
share of incomplete families. In the future, we expect that there will be a rise in the number
of single-member households. In the field of housing, this will be reflected primarily in a
change in the structure of housing requirements.
A serious problem of the Czech economy is its fiscal imbalance; public budgets are not
balanced. Developments in public finances suggest the existence of structural problems. The
deficits are not cyclical in nature, but are the result of constantly rising mandatory expenditure
and an expansive fiscal policy focused on improving economic growth. The most serious risk
in the medium term is the imbalance of public finances in cases where reforms are not pushed
through completely.
In the field of housing, we can expect that, in connection with the reform of public finances,
there will be pressure on cuts in mandatory expenditure. The scope of expenditure in the field
of housing will be defined by a medium-term expenditure framework including the ministry's
chapter and the State Housing Development Fund. This will eliminate fluctuations connected
with the hitherto annual appointment of volumes of budget expenditure. At the same time,
severe limits will be placed on the expansion of the register of support instruments, because
the introduction of new instruments will have to be preceded by the cancellation of old,
unsatisfactory instruments. The provision of public funds will be connected with regular
evaluations of the expediency and effectiveness of intervention instruments.
Following accession to the EU in May 2004, the Czech economy is gradually starting to use
not only advantages stemming from basic economic freedoms (the free movement of goods,
services, labour, and capital), but also the positive influence of pressure to make
improvements to the institutional environment, including pressure on discretion when
providing any forms of State aid.
Although the housing policy does not fall within the competence of the European Union, it is
influenced by the European Union. The strongest influence on the housing policy of Member
States, and therefore of the Czech Republic, comes from the social cohesion policy, which is
one of the most important plans of the EU. In this respect, the Czech Republic, like other EU
Member States, has drawn up a National Action Plan for Social Inclusion, the aim of which is
to pay due attention to the problems of poverty and social exclusion and help to tackle them.
The social inclusion policy is therefore reflected in other relevant areas, among which housing
holds a significant position.
Naturally, the housing policy of the Czech Republic will also reflect principles and
requirements related to the provision of State aid (in such a manner that State aid does not
endanger economic competition), principles and requirements related to public contracts, a
single value added tax, energy savings, consumer protection, etc.
The influence of accession to the EU on the field of housing will be affected by temporary
exemptions concerning the preservation of the reduced VAT rate for housing construction
and the limitations in the acquisition of property for secondary housing purposes by
foreigners, which the Czech Government has negotiated for a transitional period.
29
Appendix No 3
Current support instruments in the housing sector
A. Programmes funded out of the national budget via the Ministry for Regional
Development
1. `Housing Development Support' programme
1.1. Support for the regeneration of high-rise housing estates ­ in accordance with
Governmental Order No 494/2000, on the conditions for the provision of grants from
the national budget to support the regeneration of high-rise housing estates
The aim of the sub-programme is to create conditions for the gradual conversion of
existing mono-purpose estates into attractive multi-purpose urban units. One form of support
is a special-purpose grant provided for up to 70% of the budgeted costs of individual activities
aimed at fulfilling this objective. Assistance is available for municipalities on whose territory
there is a high-rise housing estate numbering at least 150 flats. Support is provided, for
example, for the preparation of a regulatory plan for a high-rise housing estate, the
construction of transport and technical infrastructure, including pedestrian areas, public areas,
and cycle paths, the construction of anti-noise barriers, lay-bys, and parking spaces, the
modification and construction of public recreational areas, etc.
1.2. Support for the construction of rented flats
The aim of the sub-programme is to support the construction of rented flats owned by
municipalities and intended for persons in a particular income bracket. The conditions of the
programme preclude the combination of municipal funds with another juristic or natural
person, with the exception of another municipality. A municipality must not transfer
ownership or co-ownership of a flat to another person. The maximum amount of the grant is
CZK 550,000 per flat, or a maximum of CZK 630,000 if local roads, special-purpose roads,
water mains, and a sewage system need to be built at the same time. In accordance with the
obligations of the Ministry for Regional Development regarding energy conservation10
graded
grants are proposed, depending on the method used to handle the heat technology features of a
building.
1.2.1. Support for the construction of rented flats in rural areas
Support for the construction of rented flats is eligible for a grant in the scope of the
sub-programme `Support for the construction of rented flats'. The aim, in accordance with the
principles of sustainable rural development, is to support the emergence of rented flats for
persons in defined income brackets in idle buildings on the territory of a municipality with a
maximum population of 1,999 inhabitants. The amount of the grant is graded depending on
the method used to hand the heat technology features of the building.
1.2.2. Support for the construction of technical infrastructure for subsequent
construction of apartment blocks and houses
Support for the construction of technical infrastructure is eligible for a grant in the
scope of the sub-programme `Support for the construction of rented flats'. The aim is to
10
The National Programme for the Support of Energy Savings for 2005, in accordance with
Government Resolution No 1105 of 2004.
30
expand the supply of classified land through the construction of technical infrastructure, for
subsequent construction of apartment blocks and houses. The grant is provided in accordance
with the a regulation of the European Communities11
based on the de minimis rule, for
development areas to be used for housing which are in the ownership of municipalities.
Assistance is granted only to those municipalities where roads, a sewage system, and water
mains are also being built. The maximum amount of a grant is CZK 80,000 per future flat
built on the land used for the investment.
1.3. Support for the construction of subsidized flats
The aim of this sub-programme is to support the construction of rented flats, owned by
a municipality, for persons who are disadvantaged in their access to housing not just because
of their income, but also for other reasons leading to special needs in this area. The
programme includes three areas of grants: 1. A protected flat, for which a maximum grant of
CZK 600,000 ­ CZK 800,000 is provided depending on the size of the municipality, is
intended for persons with reduced self-sufficiency for reasons of health or advanced age. 2. A
halfway flat, for which a maximum grant of CZK 600,000 is provided, is intended for
persons who have a reduced capability of integrating into the life of normal society. A
condition for the provision of a grant in the case of these first two grant categories is the
provision of social services. 3. A starter flat, for which a maximum grant of CZK 250,000 is
provided, is intended for persons who, as a result of unfavourable living circumstances, do not
have access to housing, but are capable of fulfilling the obligations stemming from a letting
relationship. A municipality may combine funds only with another municipality or with
juristic persons established to provide health and social services, with public service
companies, church organizations, etc. In accordance with the obligations of the Ministry for
Regional Development regarding energy conservation10
graded grants are proposed,
depending on the method used to handle the heat technology features of a building.
1.4 Support for repairs to faults discovered in high-rise housing construction
The aim of this sub-programme is to help the owners of buildings constructed with
panel technology to make essential repairs of the most serious defects causing the emergency
conditions of the apartment block. A decision of the building control department must be
issued for the repair of defects and breakdowns in accordance with Section 87 and Section 94
of the Building Act. This assistance is in the form of a non-investment grant covering up to
40% of actual costs, up to a maximum of CZK 45,000 per residential unit. The grant
beneficiaries are all owners of apartment blocks and flats, i.e. municipalities, housing
cooperatives, natural persons, juristic persons.
1.5. Support for the repair of domestic lead piping
The aim of this sub-programme is to involve the owners of apartment blocks, houses,
and flats to exchange lead piping, to reduce the concentration of lead in drinking water, and to
fulfil the obligations stemming from the Czech Republic's commitment to ensure the
implementation of the legal regulations of the European Communities in the field of the
environment which relate to the content of oil in drinking water. Assistance is in the form of a
non-investment financial grant provided via the funds of municipalities to the owners of
permanently occupied apartment buildings or houses or to the owners of flats with lead
piping. The grant is given up to a maximum of 40% of the actual cost of replacing lead piping
in a building, or in absolute terms a maximum of CZK 20,000 per residential unit.
11
Commission Regulation (EC) No 69/2001 of 12 January 2001 on the application of Articles
87 and 88 of the EC Treaty to de minimis aid.
31
2. Mortgage support
2.1. Support of mortgages for young people up to the age of 36 ­ in accordance with
Governmental Order No 249/2002, on conditions for the provision of contributions to
mortgages for persons under the age of 36, as amended by Governmental Order No
32/2004.
The aim of the support is to increase the availability of privately owned housing for
young people. Support focuses on the acquisition of older housing, i.e. of a flat or house, and
is provided in the form of an interest-based subsidy for a mortgage; this subsidy on interest is
provided only for mortgages or part thereof of up to CZK 800,000 if a flat is purchased, or
CZK 1.5 million if a house is purchased. The beneficiary of this assistance may be a young
person who, in the year the application was submitted, did not reach the age of 36 years old,
and at the time the application was submitted did not own or co-own a residential building,
house, or flat; if a married couple applies for support, these conditions must be met by both
spouses. A house or flat which has been purchased with this support must be used as
permanent housing by the beneficiary of the support over the period that the assistance is
provided. The amount of the interest subsidiary ranges from one to four percentage points,
depending on the average level of interest rates for which the mortgage banks granted new
credits with State aid in the preceding calendar year, and is available for a maximum of ten
years.
B. Support financed out of the State Housing Development Fund
1. Support for the construction of rented flats for persons in defined income brackets ­ in
accordance with Governmental Order No 146/2003, on the use of resources from the
State Housing Development Fund to cover part of the costs connected with the
construction of flats for persons with certain incomes
The aim of the support is to construct rented flats owned by municipalities and
intended for persons in a particular income bracket. The maximum amount of the grant is
CZK 550,000 per flat, or a maximum of CZK 630,000 per flat if local roads, special-purpose
roads, water mains, or networks of technical amenities need to be built at the same time. The
conditions of support preclude the combination of municipal funds with another juristic or
natural person, with the exception of another municipality. A municipality must not transfer
ownership or co-ownership of a flat to another person. In 2005, it is expected that there will
be an amendment to the governmental order to handle the unification of the conditions for the
provision of assistance in accordance with the Programme for the support of the construction
of rented flats and technical infrastructure, and Governmental Order No 146/2003, primarily
concerning energy conservation.
2. Provision of low-interest loans to young people up to the age of 36 for new housing
construction ­ in accordance with Governmental Order No 97/2002, on the use of
resources from the State Development Fund in the form of credit to cover part of the
costs connected with the construction of a flat by persons under the age of 36 years old,
as amended by Governmental Order No 665/2004.
The aim of the soft loan is to increase the availability of new owner occupied housing
for young people who do not have their own housing. The applicant may be a young person
who, in the year the application was submitted, did not reach the age of 36 years old, and at
the time the loan application was submitted did not own or co-own a flat, residential building,
or house; if a married couple applies for support, these conditions must be met by both
spouses. A flat or house with a single flat built with the help of this loan must be used as
32
housing by the applicant who receives the loan for the period over which the loan is repaid.
The floor area of all rooms of a flat, including rooms used for amenities, must not exceed 80
m2; the floor space of all rooms of a flat in a house with a single flat, including rooms used
for amenities, but not including the garage, must not be more than 120 m2.
3. Provision of low-interest loans to young people up to the age of 36 for the acquisition of
a flat ­ in accordance with Governmental Order No 616/2002, on the use of resources
from the State Housing Development Fund in the form of credit to cover part of the costs
connected with the construction or purchase of a flat by persons under the age of 36
years old.
The aim of the soft loan is to enable young people up to the age of 36 years ­ married
couples living in marriage or single persons taking permanent care of a minor ­ to purchase
housing. The loan may be used to finance the construction of a flat, purchase of a flat, or
payment for the transfer of member rights and obligations in a housing cooperative. The
applicants may be a married couple provided that at least one of the spouses does not reach
the age of 36 in the year the application was submitted, or a person living alone with
permanent care of a child who does not reach the age of 36 in the year the application was
submitted. At the time the application is submitted, the applicant must not be the owner of a
flat, apartment building, or house, or the tenant of a cooperative flat; if a married couple
applies for support, these conditions must be met by both spouses. The loan may be provided
up to a maximum of CZK 300,000; the maximum repayment period is 20 years. The interest
charged on the loan is two per cent. The commencement of the repayment of the loan
principal may be deferred for a maximum period of ten years as of the date the grantee started
drawing on the loan. The Fund may interrupt the repayment of the loan principal for a
maximum of two years for social, family, or other serious reasons. No limit is placed on the
size of the flat or house. If a flat is acquired by means of construction, the birth of a child after
the loan agreement has been concluded will result in a reduction in the outstanding part of the
loan principal by CZK 30,000 per such child (including adopted child).
4. PANEL Programme ­ under Governmental Order No 299/2001, on the use of the
resources of the State Housing Development Fund to cover part of the interest on loans
provided by banks to juristic and natural persons for the repair, modernization, or
regeneration of high-rise buildings, as amended
The aim of this support is to facilitate the financing of comprehensive repairs of
residential buildings constructed with panel technology, including improvements in the heat
technology properties. The subject of repair, modernization, or regeneration of a high-rise
building must be at least the repair of static faults, the reconstruction of distribution systems
(health installations, gas, heating, electricity) and an improvement in the heat technology
properties; this does not apply if the condition of a high-rise building does not require any of
these repairs, modernization, or regeneration. This assistance used to be provided at an
amount of the difference in the loan repayments corresponding to a reduction in the interest
on the loan by three percentage points, or by four or five percentage points in the districts
stipulated in the annex to the governmental order; at present, the amount of support has been
harmonized at four percentage points. This assistance relates to a loan or part thereof not
exceeding CZK 4,800 per 1 m2 of the floor area of a flat, even in cases where the granted loan
is higher. Support is paid throughout the loan repayment period, but for a maximum of 15
years as of the date of conclusion of the support provision agreement. In the scope of the
programme, it is also possible to acquire a bank guarantee from Českomoravská záruční a
rozvojová banka, a.s. Support provided under the PANEL programme must be notified to the
European Commission.
33
C. Support provided by other ministries
1. Support of building saving schemes ­ Act No 96/1993, on building saving schemes, as
amended
The main aim of support is to ensure the smooth accumulation of funds provided by
building societies in the form of credit for the financing of housing requirements. With effect
as of 1 January 2004, an amendment to Act No 96/1993, on building saving schemes, entered
into force; this amendment considerably altered the parameters of the system of building
saving schemes in the Czech Republic. In particular, the following parameters apply to
agreements concluded after the date that this law entered into force ­ the saving period is at
least six years and State aid accounts for 15% of the amount saved in the corresponding
calendar year (up to maximum savings in any given year of CZK 20,000). The beneficiaries
of this support are natural persons ­ participants in building saving schemes. The provision of
a contribution is not purposefully tied to use in the field of housing, because the aim is to
support clients using pleasant savings programmes.
2. Housing contribution ­ Act No 117/1995, on State social support, as amended
The housing contribution helps cover the costs of housing among families and
individuals on a low income. Families wishing to receive this contribution are subject to
means testing every calendar quarter. If the income of a family in the previous calendar
quarter is lower than 1.6 times the subsistence level of the family, the owner of the flat or
tenant registered as the permanent occupier of the flat may claim a housing contribution. This
contribution is granted irrespective of where the eligible person lives, whether the flat is a
municipal, cooperative, or privately owned flat, or whether it is a flat in the eligible person's
own building or what the actual housing costs are.
3. Social welfare benefits ­ Act No 482/1991, on social neediness, as amended
One-off or monthly monetary benefits or benefits in kind supplement the inadequate
income of socially needy households to the extent that they are able to secure their staple
living requirements (i.e. essential household costs as well as personal needs). At the same
time, the subsistence level amounts and actual warranted household costs of such
requirements are taken into account, with particular consideration for actual housing costs in
an adequate flat.
4. Support for owners to insulate buildings
The aim of this programme, announced by the Czech Energy Agency, is to promote
improvements in the energy performance of buildings. Assistance is provided to owners and
co-owners of residential buildings for measures to reduce the consumption of fuel and energy
in buildings. A criterion for the assessment of projects is the maximum benefit in energy
savings achieved by the granted State aid.
5. Compensation of asset losses to banks
The aim of this payment from the national budget is to compensate for the asset losses
of banks which have provided special-rate loans in previous years (with an interest rate of 1%
and 2.7%) for cooperative and individual housing construction. Funds are provided from the
national budget based on Section 45 of Act No 21/1992, on banks, as amended. This payment
covers the difference between the low interest rates and the discount rate.
34
D. Indirect forms of support (tax allowances)
1. Tax allowances tied to income tax ­ in accordance with Act No 586/1992, on income tax,
as amended
The following are exempted from income tax:
· revenues from the sale of a house, flat, including a share on the communal parts of a
building or a co-ownership share, including the corresponding land, provided that the
seller has resided here for at least two years directly before the sale;
· revenues from the sale of property, residential and non-residential premises not specified
up, if the period between the acquisition and sale is more than five years, if not included in
business assets;
· revenues from the transfer of membership rights of a cooperative, from the transfer of
asset shares in a transformed cooperative, if the period between acquisition and sale is
more than five years;
· interest earned on deposits from building savings, including interest earned on State aid;
· interest income from mortgage bonds;
· grants from the national budget, from the budgets of cities, municipalities, higher
territorial self-governing units, State funds, assigned grants, or a contribution from the
national budget provided for the acquisition of tangible fixed assets or for the
enhancement thereof;
· income generated in the form of the acquisition of ownership of a flat as compensation for
evacuating another flat, and compensation (severance pay) for evacuating a flat paid to an
occupier on condition that this occupier uses the compensation (severance pay) to satisfy
his/her housing requirements within one year of the year in which he/she received the
compensation (severance pay). The same procedure applies to revenues from the paid
transfer of rights and obligations connected with membership of a cooperative, provided
that, in connection with this transfer, the lease of the flat is cancelled and the taxpayer
uses the funding received for the satisfaction of his/her housing requirements;
· the income of the acquirer of a flat, garage, or studio, or a co-ownership share in non-
residential premises received in connection with the mutual settlement of resources under
Section 24(7) and (8) of the Residential Unit Ownership Act;
· the revenues of the owner of a flat or non-residential premises 1. stemming from
compensation of expenditure on (costs of) repairs, maintenance, and technical
enhancements of the communal part of a privately owned building containing flats and
non-residential premises in accordance with a separate legal regulation on the ownership
of flats in the form of material fulfilment, if it is laid down in an agreement on the
construction of a further flat or non-residential premises, or part thereof, on condition that
the owners of the flats and non-residential premises in the building agree in writing on the
compensation of the given costs and expenditures other than in accordance with co-
ownership shares in communal parts of the building, or if a separate regulation so
appoints, 2. stemming from compensation of expenditure on (costs of) repairs,
maintenance, and technical enhancements of the communal parts of a privately owned
building containing flats and non-residential premises in accordance with a separate legal
regulation on ownership of flats by a different owner of a flat or non-residential premises
in the building in the form of material fulfilment, such being at an amount equal to the
difference exceeding the obligation of the owner of the flat or non-residential premises in
the building to reimburse the given costs and expenditure, depending on the size of the co-
ownership share in the communal parts of building, provided that the owners of flats and
non-residential premises in the building agree in writing on the reimbursement of costs
35
and expenditure other than according to the amount of co-ownership shares in the
communal parts of the building, or if a separate legal regulation so stipulates;
· revenues
1. from the price regulated rent of flats, from the rent of garages, and from payments
for performance provided with the use of such flats and garages in buildings in the
ownership and co-ownership of housing cooperatives set up after 1958, for the
construction of which financial, credit, or other assistance has been provided in
accordance with separate legal regulations,
2. from the rent of flats and garages in the ownership or co-ownership of housing
cooperatives, labelled in accordance with previous regulations as `people's
housing cooperatives', and rent from flats and garages used by partners or
members of taxpayers set up to become building owners.
· Deductibles from the income tax base.
· Natural persons drawing on a mortgage or credit granted under a building saving scheme
have the opportunity of deducting paid interest from the base used for the calculation of
income tax.
· Accelerated depreciation from the acquisition or replacement cost of a building.
2. Property tax ­ in accordance with Act No 338/1992, on property tax, as amended
The following are exempted from real estate tax:
· State-owned structures and land;
· structures and land owned by a municipality in whose cadastral district these structures or
land plots are situated;
· newly constructed residential buildings owned by natural persons and flats owned by
natural persons in newly constructed residential buildings, if used as the permanent
residence of the owners or next of kin (exemption from tax for 15 years as of
approbation);
· residential buildings owned by natural persons who receive social welfare benefits in
accordance with the Social Neediness Act and who are registered disabled, such being in
the scope used for their permanent residence;
· structures with changes in the method of heating from solid fuel to a system using
renewable solar, wind, geothermal, or biomass energy, or changes entailing a reduction in
the heating requirements of a structure by means of structural adjustments, for which
planning permission is issued (exemption from tax for five years);
· residential buildings returned to natural persons in restitution (exemption from tax until
2007);
· residential buildings owned by natural persons which were built prior to 1948 (exemption
from tax until 2007).
3. Tax allowances tied to value added tax ­ in accordance with Act No 235/2004, on value
added tax, as amended
· In cases of the delivery of an apartment block, house, or flat as part of these buildings,
even if incomplete, including structural and installation work connected with their
construction, reconstruction, modernization, and repair, including design, materials,
machinery and equipment built into or installed into them as a component thereof by
means of installation or building work, a reduced tax rate is applied.
· In the case of the transfer of an apartment block, house, or flats, a reduced tax rate is
applied unless the Act stipulates to the contrary in Section 56.
36
· The transfer of structures, residential and non-residential premises is exempt from tax
once three years have passed since acquisition or approbation.
· The financial lease of structures, residential and non-residential premises is exempt from
tax, with the exception of the conclusion of a financial lease contract within five years of
acquisition or approbation of the structure or before the acquisition or approbation of the
structure.
· The transfer of land, including financial leases, is exempt from tax, with the exception of
the transfer of building plots. For the purposes of this Act, a building plot is an
undeveloped piece of land on which a structure may be built, connected to the ground
with solid foundations, in accordance with planning permission. Undeveloped land is land
on which there is no structure as an item.
· The letting of land, structures, residential and non-residential premises is exempt from tax.
This exemption does not apply to short-term leases, the letting of space and places for the
parking of vehicles.
· A registered VAT payer may decide that, in the case of the letting of land, structures,
residential and non-residential premises to other registered VAT payers, tax may be
applied for the purposes of implementing their economic activities.
37
Appendix No 4
Housing policy in EU countries
Basic trends
Basic trends in the field of housing policy in EU countries and selected accession countries
are described in detail in many foreign and Czech book publications (e.g. Donner 2000, Lux
et al. 2002, Lux (ed.) 2003). Although the need for satisfactory housing is highlighted in a
number of international documents (e.g. the UN's Universal Declaration of Human Rights,
the Declaration on Social Progress and Development, the International Pact on Economic,
Social and Cultural Rights, the Global Strategy for Shelter to the Year 2000, and Agenda 21),
in the legislation of most countries the right to housing is not of a directly enforceable nature.
The participation of the public budgets of `old' EU Member States in the field of housing
therefore currently focuses less on the new construction of public (municipal, State) flats and
more on ensuring more equal access to housing and partial intervention in those areas where
the open housing market has failed. The reformulation of the housing policies of developed
countries during the 1980s and 1990s led to a restriction in public expenditure in the sphere of
housing and a greater emphasis on the formation of conditions for the broader involvement of
private capital. Although the housing policy is in the competence of individual Member
States, Kleinman (1998, 2004) identifies the following trends common to the housing policies
of EU countries in the 1990s:
· a greater emphasis on the role of the market in organizing the production, allocation
and financing of housing;
· greater support for the privately owned sector of housing;
· a switch from a stress on new construction to a stress on the regeneration of the
existing housing stock;
· a greater emphasis on the efficiency and effectiveness of housing policy instruments;
· a greater emphasis on the role of the market and cooperation with the private sector in
the field of low cost housing;
· an emphasis on a more effective focus for support in the in the field of low cost
housing in connection with the general trend of a social policy aimed at greater
selectivity;
· deregulation in the field of the financing of housing and private rented housing.
In much the same fashion, in accession countries currently undergoing transformation to a
market economy and democratic system, there has generally been a sharp fall in State
expenditure on housing following the change in social regime. Unlike existing EU Member
States, however, the decline in State interventions has not been accompanied by necessary
reforms ensuring that State expenditure is replaced by non-profit activities or private capital.
In many countries, optimal conditions for the development of mortgages have not yet been
cultivated (reasons include bureaucracy, corruption, insufficient legislative protection, the
protracted judicial process, the slow registration in the relevant registered, etc.), compounded
by the lack of long-term functioning legislation related to the working of associations of
owners, a definition of low cost housing, an efficient contribution to housing for socially
needy households, or conditions for the development of the non-profit sector; in particular the
regulatory barriers in the field of rented housing have not been modified in any fundamental
manner.
38
The reform in these countries was reflected primarily by means of a fundamental change in
the ownership structure of housing in favour of owner-occupied housing. With the exception
of Poland and the Czech Republic, the acceding transitional countries have applied the `right
to buy', i.e. the right of tenants to buy the rented flat they occupy under centrally set, specially
priced conditions.
39
Financing of housing and availability of housing
The financing of housing in the `old' EU Member States is still organized as a combination of
public finances and private capital, even though, based on the above-mentioned reforms, the
participation of public finances has been substantially reduced (in the Netherlands, for
example, it has practically disappeared altogether).
Low cost housing is operated either by municipalities or by non-profit organizations. In the
past, the construction and operation of low cost housing was supported in large part out of
public resources, but thanks to the significant increase in rent in the past twenty years, the
operating subsidies have often been removed entirely and capital grants have been reduced.
Here, too, a steadily increasing emphasis is placed on the cooperation of private capital or the
securing of the necessary funding for the new construction of social flats from non-budgetary
resources (the United Kingdom, Germany, France, the Netherlands, etc.). Rent tends to be set
at the level of the costs connected with the acquisition and operation of social flats (cost-based
rent) less any operating grants; in some countries, however, the concept of means-related rent
is used (Ireland, Portugal). The decline and disappearance of operating subsidies has been
compensated, as mentioned above, by a significant hike in the rent applicable to social flats.
The allocation of evacuated or newly built social flats has started to be more restrictive, in
favour of socially needy households. This trend, together with the increases in rent, has
compounded the `residualization' of low cost housing, i.e. social segregation of the lowest
income households in low cost housing, although this actually began of its own accord in the
1970s, mainly due to the low quality of new social flats (high-rise structures), the bureaucratic
management of the housing stock, and the stigmatization of low cost housing. However, low
cost housing remains an important part of the housing stock of European countries and one of
the two pillars in ensuring sufficient affordability of housing for socially needy households (in
addition to the housing contribution). Given the above-mentioned negative experience,
however, at present the favoured model is low cost housing operated by non-profit private
housing associations (especially in the United Kingdom, the Netherlands, France, and Ireland)
rather than municipal housing.
In the field of private rented housing, there has been a transformation (in many countries
much earlier than the last two decades of the last century) from the first generation post-war
blanket rent regulation to second generation rent regulation, which takes more account of
market factors, the local and regional differentiation of prices, and essentially mirrors market
supply and demand (free market rent). The second generation system of rent regulation exists
in what are essentially two forms: a system of locally usual rent (Germany, France) and a
system of cost-controlled rent accompanied by inspections of the profits generated by the
lessors (the Netherlands).
However, besides Germany, most of the housing stock of the `old' EU Member States
comprises owner-occupied housing. At present, the acquisition of privately owned housing
tends to be financed via commercial mortgages; in Nordic countries, and also in Spain, for
example, these purchases are also financed out of mortgages from State subsidized or owned
funds (based on social neediness and the meeting of certain criteria). In much the same
fashion as in the field of housing policy, in the same period far-reaching deregulation of the
banking sector and mortgages took place, which was connected inter alia with the legislative
process of the securitization of mortgage products (mortgage banking). Keener competition
40
and liquidity meant that commercial credit products became much more affordable, and in
particular there was an improvement in the range of variants available for the repayment of
credit or the fixing of interest (especially in the United Kingdom). The mortgage has become
the standard instrument in the acquisition of privately-owned housing, and despite the high
property prices it is generally affordable even for the powerful medium income households,
thanks to the wide range on offer.
In some countries, there is the possibility of deducting interest charged on mortgages from the
income tax base; but considering the regressive nature of this system (it tends to support the
highest income households), this type of fiscal support has been cancelled in other countries
(the United Kingdom, France). Mortgages in certain countries (Germany, Austria, and in an
altered form in France) are complemented by a building saving scheme system. Although this
system is often criticized by experts from the world of finance, in the above-mentioned
developed countries, thanks to its careful legislation intended to reduce the potential level of
abuse and inefficient use of State aid, the system allows those who buy their first home to
save or, by means of low interest credit, to obtain the funding they need to purchase a flat
which is not covered by a mortgage.
Lower income households then make temporary or permanent use of either social or private
rented housing, where the State helps to cover the cost of rent for the poorest households via a
carefully tested contribution to housing (or rent). The role of the direct housing contribution
has become much more prominent in the housing policies of the `old' EU Member States in
the last 20 years. The amount of the contribution is generally calculated with consideration for
the actual net income of households and actual expenditure on housing (sometimes also for
the size of the family in the scope of a pro-family government policy); however, expenditure
is restricted by local averages and tariffs for the utility area of a flat in relation to the size of
the household. The contribution to housing (rent) is considered more of a housing policy
instrument than a social benefit. Unlike low cost housing, which supports the supply of
housing, the contribution promotes demand for housing. Therefore, in certain countries in is
not in the competence of the ministry responsible for social benefits but the ministry
responsible for housing policy (e.g. in France).
The systems for the financing of housing in accession countries are often a conglomeration of
poorly efficient programmes and instruments, which do not lead to a significant increase in
the affordability of housing (despite their relative financial demands, such as the special
`transitive' system of building saving schemes) and do not lead to the establishment of a long-
term sustainable housing policy. Due to the privatization of the housing stock and the
marginalization of rented housing, support often focuses in particular on owner-occupied
housing (especially in Hungary). By privatizing the former State/municipal housing stock,
some countries have essentially resigned themselves to a continuation of some form of more
active housing policy (Estonia). Many countries (Slovakia, the Czech Republic) also try to
replace the inadequate speed of essential legislative reforms by creating new grant
programmes, although these are frequently ill-prepared and lead to abuse. A positive
evaluation of developments in housing policy is generally only found in the context of Poland,
which, by deregulating the rented sector, defining social housing, amending the rent
subsidization, and creating independent non-profit housing associations, has probably been
most scrupulous in following the trend established in the `old' Member States of the EU.
Literature
Donner, C. 2000.
41
Kleinman M. (1998). Western European Housing Policies. Convergence or Collapse? In: Kleinman M., W.
Matznetter, M. Stephens `European Integration and Housing Policy', pp. 242-256. London: Routledge.
Lux, M. 2002. (ed.) Bydlení ­ věc veřejná (Housing ­ Res Publica). Prague SLON.
Lux, M. 2003. (ed.) Housing Policy: An End or A New Beginning. Budapest: LGI, Open Society Institute.
42
43
Graphic Appendices
44
Number of residential units per 1,000 inhabitants in EU countries
300
320
340
360
380
400
420
440
460
480
500
520
Spain
Portugal
Greece
France
Finland
Sweden
Denmark
Germany
Belgium
Estonia
Italy
UnitedKingdom
CzechRepublic
Cyprus
Netherlands
Latvia
Austria
Hungary
Luxembourg
Ireland
Lithuania
Slovenia
Malta
Poland
SlovakRepublic
(Source: `Housing Statistics in the EU, 2004'; the figures for Austria and Slovakia are only for occupied dwellings)
Average total floor space of existing residential units in EU countries
(m2 per dwelling)
40
50
60
70
80
90
100
110
120
130
Latvia
SlovakRepublic
Estonia
Lithuania
Poland
Hungary
Slovenia
CzechRepublic
Finland
Greece
Portugal
Belgium
UnitedKingdom
France
Germany
Spain
Italy
Sweden
Austria
Netherlands
Ireland
Malta
Denmark
Luxembourg
(Source: `Housing Statistics in the EU, 2004'; the figures for the United Kingdom and Denmark apply to the areas of
habitable rooms)
1
Average total floor space of newly constructed residential units in EU countries
(m2 per dwelling)
194,3
197,6
60
70
80
90
100
110
120
130
Italy
UnitedKingdom
Portugal
Estonia
Finland
Hungary
Spain
Poland
Austria
CzechRepublic
Ireland
Lithuania
Denmark
France
Slovenia
Germany
Netherlands
SlovakRepublic
Belgium
Luxembourg
Greece
Sweden
Latvia
Cyprus
(Source:
`Housing Statistics in the EU, 2004'; the figure for Malta is not available, the figure cited for the United Kingdom is for
England only)
2
Average number of members of the household in EU countries
1,5
1,7
1,9
2,1
2,3
2,5
2,7
2,9
3,1
Sweden
Germany
Denmark
Finland
Netherlands
Austria
Belgium
CzechRepublic
Estonia
France
UnitedKingdom
Latvia
Luxembourg
Hungary
Italy
Lithuania
SlovakRepublic
Greece
Poland
Portugal
Slovenia
Ireland
Spain
Cyprus
Malta
(Source: `Housing Statistics in the EU, 2004')
3
Share of single-member households in EU countries
(% of the total number of all households)
10
15
20
25
30
35
40
45
50
Malta
Cyprus
Portugal
Greece
Spain
Ireland
Slovenia
Italy
Latvia
Poland
Hungary
SlovakRepublic
Lithuania
Luxembourg
CzechRepublic
France
Austria
Estonia
UnitedKingdom
Belgium
Netherlands
Denmark
Germany
Finland
Sweden
(Source: `Housing Statistics in the EU, 2004')
4
Share of low income households in EU countries
(i.e. households with incomes lower than 60% of the median, converted into a consumer unit, figures in % of the total
number of all households)
0
5
10
15
20
25
Ireland
Greece
Portugal
Italy
Spain
Estonia
Lithuania
UnitedKingdom
Latvia
France
Malta
Poland
Belgium
Austria
Luxembourg
Denmark
Finland
Germany
Netherlands
Slovenia
Hungary
Sweden
CzechRepublic
SlovakRepublic
(Source: Eurostat, 2004, the figure for Cyprus is not available)
5
Expenditure on housing in EU countries
(i.e. the share of expenditure on housing as a % of total household consumption, 2003)
5
10
15
20
25
30
35
Malta
Portugal
Greece
Lithuania
Hungary
UnitedKingdom
Austria
Slovenia
Italy
Cyprus
Netherlands
Latvia
Ireland
Luxembourg
Estonia
CzechRepublic
Belgium
France
Poland
Germany
Finland
SlovakRepublic
Denmark
Sweden
Spain
(Source: Eurostat, 2004)
6
Expenditure on housing in EU countries
(Euro per person per year, 2003)
0
1000
2000
3000
4000
5000
6000
CzechRepublic
Latvia
Hungary
Malta
Poland
Portugal
Estonia
SlovakRepublic
Greece
Spain
Slovenia
Lithuania
Cyprus
Netherlands
Austria
Italy
UnitedKingdom
Ireland
Belgium
Germany
France
Finland
Denmark
Sweden
Luxembourg
(Source: Eurostat, 2004)
7
Relative price of housing in EU countries ­ indices (EU-15 = 100)
(the price of housing includes rent or expenditure on housing by owners, services, heating, and energy, in purchasing power
parity, 2002)
0
20
40
60
80
100
120
140
160
Latvia
Lithuania
SlovakRepublic
Estonia
Hungary
Poland
CzechRepublic
Portugal
Malta
Cyprus
Slovenia
Greece
Spain
UnitedKingdom
Italy
Austria
Belgium
France
Netherlands
Sweden
Germany
Luxembourg
Denmark
Finland
Ireland
(Source: Eurostat, 2004)
8
Forecast of population developments 2003-2020
(%, 2003 = 100)
60
70
80
90
100
110
120
130
Estonia
Latvia
Hungary
Lithuania
Italy
Slovenia
Portugal
CzechRepublic
Greece
Poland
Austria
Germany
SlovakRepublic
Belgium
Denmark
Spain
Sweden
Finland
Malta
UnitedKingdom
Netherlands
France
Ireland
Luxembourg
Cyprus
(Source: UN - World Population Prospects, 2002 revision, high variant)
9
Creation of per-capita GDP in EU countries
(Euro per person, 2003)
0
10 000
20 000
30 000
40 000
50 000
60 000
Luxembourg
Denmark
Ireland
Sweden
Netherlands
Austria
Finland
UnitedKingdom
Belgium
Germany
France
Italy
Spain
Cyprus
Greece
Portugal
Slovenia
Malta
CzechRepublic
Hungary
Estonia
SlovakRepublic
Poland
Lithuania
Latvia
(Source: Eurostat, 2004)
10
11
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Housing, water, electricity, gas and
other fuels 17,1 16,2 16,5 14,7 18,0 16,6 17,7 15,6 18,3 16,8 18,3 15,9 19,5 18,6 19,0 16,8 20,6 18,0 18,8 16,8 19,5 17,7 18,3
of which:
actual rentals for housing 3,8 3,5 3,6 3,3 4,0 3,6 3,7 3,5 4,0 3,6 3,9 3,4 4,1 3,7 3,9 3,6 4,5 3,9 3,9 3,7 4,4 3,9 3,9
maintenance and repair of the dwelling 1,0 1,5 1,7 1,0 1,3 1,8 2,2 1,1 1,1 1,8 2,1 1,2 1,2 1,9 2,2 1,4 1,3 2,0 2,3 1,5 1,2 1,9 2,1
other services relating to the dwelling 2,1 1,7 1,8 1,7 2,1 1,8 1,9 1,8 2,2 1,8 1,9 1,7 2,5 2,3 1,9 1,8 2,6 2,0 2,0 1,8 2,5 2,1 1,9
electricity, gas and other fuels 10,3 9,5 9,4 8,7 10,6 9,4 10,0 9,2 11,0 9,5 10,4 9,5 11,8 10,7 11,0 10,0 12,3 10,1 10,7 9,9 11,4 9,7 10,3
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Housing, water, electricity, gas and
other fuels 21,1 20,4 20,0 18,1 21,8 19,5 21,7 19,5 22,2 20,1 22,0 19,6 23,7 22,5 22,3 20,2 25,2 22,3 22,0 20,5 23,2 21,0 21,2
of which:
actual rentals for housing 7,6 7,3 7,3 6,7 7,9 7,3 7,8 7,1 8,3 7,6 8,3 7,2 8,6 7,9 8,2 7,5 9,5 8,2 8,1 7,6 8,6 7,9 7,9
maintenance and repair of the dwelling 0,8 1,1 1,4 0,7 0,8 0,9 1,4 0,8 0,6 1,1 1,2 0,8 0,7 1,1 1,1 0,8 0,8 1,3 1,4 0,9 0,9 1,0 1,1
other services relating to the dwelling 2,7 2,4 2,4 2,3 2,8 2,4 2,7 2,5 2,9 2,5 2,6 2,4 3,1 3,2 2,6 2,4 3,2 2,8 2,6 2,4 3,0 2,8 2,5
electricity, gas and other fuels 10,0 9,5 8,9 8,3 10,2 8,7 9,7 8,9 10,4 8,8 9,7 9,1 11,2 10,1 10,3 9,4 11,5 9,8 9,8 9,4 10,5 9,2 9,5
Source: Czech Statistical Office
22 February 2005
1999
2004
Share of household expenses
of the Reporting sample of households
in net cash expenditures (%)
20021999 2000 2001 2003
Share of household expenses
of the Reporting sample of households
in net cash expenditures (%)
Estimate for average household in rental dwelling
Estimate for average household
20042002 200320012000