Housing Standards 2003/2004:
Housing Policy in the Czech Republic - More Efficiently and More Effective

2. General assessment of selected housing policy instruments

2.4 Public subsidies for rental housing affordability
Second subsidy - housing allowance

The second pillar of a housing policy aimed at increasing the affordability of adequate housing for low-income households is a housing allowance (or rent allowance). Unlike social housing, the housing allowance (rent allowance) has become far more important and popular in most EU countries over the last twenty years.

The content of the terms 'housing allowance' and 'rent allowance' is not completely identical in the Czech Republic. The housing allowance pertains to more generally understood housing costs of a household than a rent allowance and thus can include a wider range of households from various housing market segments that are entitled to such an allowance.

The basic principle of the allowance is - in view of the income level, rent amount (housing expenditures) and number of people in a household - to provide eligible households in the rental or ownership sector a housing allowance usually amounting to the difference between the actual (i.e., the actual share of housing expenditures in income) and normative (how much of their income a household should be spending on housing) housing cost burden level (rent) of a given household. When calculating the allowance three factors especially are taken into account: income, housing expenditures and the size of a household.