Housing Standards 2003/2004:
Housing Policy in the Czech Republic - More Efficiently and More Effective
Lux M., P. Sunega, T. Kostelecký, D. Čermák, P. Košinár
Prague: The Institute of Sociology, Academy of Sciences of the Czech Republic
4. How quickly should rent be deregulated in the Czech Republic (with respect to the efficiency of public housing expenditures)?
4.2 Results and discussion
The following figure shows the development of relative public costs when the price appreciation of owner-occupied housing is included in the calculation of user costs, and thus also in the decision on moving from rental housing.
Figure 1: Development of relative public costs (appreciation is included in user costs)
Source: own simulations, FBS 2002, Attitudes towards Housing in the CR 2001.
If a more significant rent deregulation started as early as 2002, then the costs to public budgets (even if all the fictitious expenditures were included) would be minimal on condition that the rent would increase on average by 80% from the declared rent level in 2002. Increasing the rent above this level would not - with respect to state expenditures - be rational given the income and demographic conditions in 2002 and given the division of the housing stock in 2002.
The following figure shows the development of public costs in a situation when a household making a decision on moving from rental housing does not consider the price appreciation of owner-occupied housing.
Figure 2: Development of relative public costs (appreciation is not included in user costs)
Source: own simulations, FBS 2002, Attitudes towards Housing in the CR 2001.
In this case, the quasi-normative for rent deregulation would shift from an 80% increase to a 120% increase from the existing declared regulated rent level.
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