An Analysis of Housing Policy Measures Aimed at Supporting Labour Flexibility in the Czech Republic

Another way how to encourage Czech citizens to move for job opportunities - elimination of the barriers in the housing market

Another means of encouraging people to move more for work would be to eliminate some of the needless barriers that exist in the housing market. Respondents were offered the following measures and it was up to them if they would recommend their implementation or not: rent deregulation, accelerating the process of registration in the land register, abolishing the tax on the transfer of property (property transfer tax), and making it easier to refinance a mortgage when selling real estate encumbered with a mortgage. Generally there was less agreement expressed with these measures than with public forms of support, but most respondents would recommend abolishing the tax on property transfers and making it easier to refinance mortgages when selling mortgaged real estate; fewer respondents agreed with rent deregulation or accelerating the process of registration in the land register.

There is no clear consensus on the view that rent deregulation would encourage people more to move for the purpose of employment (in this context Czech citizens recommend rent deregulation least of all possible measures); it was supported in the focus groups and in the "CVVM 2005" and "CVVM 2006" surveys mostly by young people, relatively flexible people, by people from rural rather than urban areas, and most evidently by those respondents in the focus groups that had moved to Prague for employment. It was not possible to measure the "real" effect of rent deregulation on the intention to move for employment using a method ("trick") similar to that used for public incentives described above, as the immediate (not the long-term) changes in this area mainly affect just a relatively small portion of respondents, and given the size of the sample population in the CVVM surveys a more detailed analysis of this group of respondents (that is, the people living in the 'regulated' rental housing sector) would have not been acceptable by the rules of statistical analysis. The "Housing Attitudes 2001" survey, which was carried out on a sample more than three times the size of the CVVM surveys, but still too small a sample to be entirely reliable, indicated in 2001 that the type of rent paid had a significant effect on the intention to move for work in the case of long-term unemployment and that rent deregulation has a significant influence on the intention to move for work. But being "trapped" in the "cage" of regulated rent - however difficult it may be to demonstrate its effect in standard sociological research - has substantial consequences (see below in the recommendations) of which people are not fully aware. It is very likely that reform in this area would, considering the outcome of the "Housing Attitudes 2001" survey, only lead to a minor increase in the amount of migration for employment among people in the sector of private (deregulated) rental housing (it is not clear to what extent the municipalities use the option to deregulate rent in their flats), but what is perhaps more important is that deregulation would release tenants from these "cages", and the introduction of transferable benefits (the housing allowance) would open up new space for migration to the more mobile part of the Czech population (that is, mainly young people).