The Housing Policy Changes and Housing Expenditures in the Czech Republic

Martin Lux

Abstract:

The paper provides brief list of changes in rental and ownership housing sector during the transition in the Czech Republic. The historic statements on development of housing under the Communistic regime as well as important changes on the field of rental housing after the fall of the Communism are presented. The complete analysis of housing expenditures of all Czech households as well as analysis of housing expenditures of different social categories of households form the first part of the paper. The second part is composed by the description of main social tensions in the sector of rental housing. According to the author there are three main social tensions on the Czech rental market: the tension between households without economically active members and households with at least one economically active member; the tension between private owners of rented flats and their tenants; and the tension between the tenants living in rent-controlled flats and the tenants living in free market rental flats. Tenants from rent-controlled flats are subject to large scale of tenant protection laws and prosper from very low level of rent prices. On the contrary households that are forced to live in market rental sector do not obtain any state contribution or any tenant protection. Moreover, the share of lower income households on total number of households living in municipal rent-controlled housing sector is not significantly higher than this share in the case of other types of housing (tenures). Regulated rent prices are too low to cover even maintenance costs of rental flats and their share on the total net income of households is still much lower than is the case in the countries of the European Union. The Eurostat and Cecodhas data sources are used for this comparison. The political will for change is weak currently. The author concludes his paper with statement that the transformation of rental housing sector has been realised only partially up to now. The brief list of necessary housing policy measures is provided.