Sociologický ústav AV ČR, v.v.i.

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2003:5 Objective and Subjective Assessments of the Financial Accessibility of Housing in the Czech Republic during the 1990s

Petr Sunega

This study looks at assessments of the financial accessibility of housing in the Czech Republic over the course of the 1990s, drawn from two mutually complementary perspectives: on the basis of verified data, detailing the levels of household income and expenditures and how they have evolved during the period under observation (objective perspective), and on the basis of the subjective responses given by respondents regarding how they assess their expenditures on housing and the level of these expenditures in relation to their household income (subjective perspective). The purpose of this is to verify whether households that, from the objective perspective, are considered to be the most at risk, owing to expenditures on housing, also genuinely identify themselves as such, and to examine what factors influence the respondents’ subjective perception of their level of expenditures on housing. To this end, data from the Accounts Statistics for Families from the Czech Statistical Office was used, along with CVVM omnibus surveys from 1995 – 2001, and data from the study Attitudes towards Housing in the Czech Republic 2001, carried out by the Socio-economic Housing team at the Institute of Sociology AS CR in 2001.

Summary

This study looks at assessments of the financial accessibility of housing in the Czech Republic over the course of the 1990s, drawn from two mutually complementary perspectives: on the basis of verified data, detailing the levels of household income and expenditures and how they have evolved during the period under observation (objective perspective), and on the basis of the subjective responses given by respondents regarding how they assess their expenditures on housing and the level of these expenditures in relation to their household income (subjective perspective).

In analysing the financial accessibility of housing over the course of the 1990s using data from the Czech Statistical Bureau, in the case of the rental sector of housing the so-called indicator and residual approach was employed, and in the assessment of the financial accessibility of privately owned housing three different approaches were used: 1) the ratio of the price of new privately owned housing to household income, 2) the lending multiplier concept, and 3) the financial strain of total loan payments for acquiring privately owned housing. In the assessment of the financial accessibility of rental housing in particular data samples were modified in order to eliminate some of their well-known defects (e.g. including expenditure on secondary housing into total household expenditures on housing, not taking into account the level of housing subsidy, not taking into consideration overconsumption of housing or incomes from the informal economy, and above all inexact figures on the level of rent of the indicated household given by those living in rental flats), which could cause a significant distortion in the results attained. The results reveal that over the course of the 1990s households in the rental-housing sector attained significantly higher values in terms of the degree to which they are burdened by expenditures on housing in comparison with households from the sector of privately owned housing. Among the groups most at risk due to expenditures on housing are households made up of senior citizens (especially single-member), households of individuals (especially women), incomplete families and families without an economically active head, and households with only one economically active member.

The subjective statements made by respondents, and their assessments of the burden that expenditures on housing represents to them, confirmed that households classified on the basis of objective data as being the most at risk due to housing expenditure also genuinely identify themselves as such. In other words, the highest proportion of respondents who assessed their expenditures on housing in relation to the level of household income as being high, or who had a problem with its level, was found among senior citizens and the working class. From the perspective of the legal relationship to the house/flat occupied, the most critical attitude towards the level of expenditures on housing was expressed by tenants and persons with another legal form of occupancy (subtenants, persons accommodated in hostels and dormitories etc.). In the assessment of the level of expenditures on housing in relation to the level of household income, a respondent‘s personal characteristics play a secondary role in comparison with the actual level of income and expenditures on housing (or related factors). The most frequently used methods people have for dealing with the problem of high housing expenditure is restricting their energy consumption and limiting consumption in areas other than housing. People who occupy rental flats privately owned by renters are surprisingly less critical in the assessment of the level of expenditure on rent in relation to household income than are people who occupy rented council flats, and yet, this fact cannot be explained by any differences in their levels of income or expenditures on housing. One of the possible explanations is the better experiences of tenants in privately owned flats in negotiating with building owners. Tenants in council houses also considerably more often than tenants in privately owned flats consider their current level of rent sufficient to cover the costs connected with the general operation and maintenance of the building and the costs related to its modernisation and reconstruction. A positive assessment of the level of rent with regard to the quality and location of the flat is expressed in particular by people with higher education, people from higher income categories, those satisfied with the relative size of the flat, the dominant material used in its construction, the quality of the windows and insulation, and those also satisfied with the accessibility of green areas in the building’s vicinity.

Keywords

financial accessibility of housing, overconsumption of housing, citizens’ attitudes, expenditures on housing, perceptions of expenditures on housing