Public Housing in the Post-Socialist States of Central and Eastern Europe: Decline and an Open Future

Abstract

One key consequence of give-away privatizations was that public housing in most post-socialist states declined within a few years to a residual share of total housing market. Despite the large differences in public/social housing policies introduced after 1995, this article will show that that almost all new social housing measures proved to be unsustainable, ineffective and often had the unintended consequence of further enhancing homeownership tenure in post-socialist housing systems. The reasons for the limited success of new social housing policies are attributed to broader historical and institutional factors, such as the ‘privatization trap’, the ‘decentralization paradox’, the impact of the informal economy and a strong socialist legacy in housing policies. These findings contribute to the study of how post-socialist housing systems emerged, and reveal how short-term policies can produce long-term structural change and can become a barrier to effective and sustainable social housing policies.

Keywords::

• Post-socialist states
• housing policy
• social housing
• housing privatization
• housing system

Notes

¹ The following 18 country experts took part in the comparative survey: József Hegedüs, Martin Lux, Nóra Teller, Gojko Bežovan, Gorana Stjepanović, Alina Muzioł-Węcławowicz, Mina Petrović, Jüri Kõre, Srna Mandič, Andreja Cirman, Wolfgang Amann, Ioan Bejan, Alexandr Puzanov, Catalin Berescu, Irina Zapartina, Alexis Mundt, Petr Sunega and Anneli Kährik. The authors of this article gratefully acknowledge the invaluable data and expertise that each of these country experts contributed to this comparative study and also thank this research team for their contribution to the evidence presented.

² We use the term ‘effectiveness’ rather than ‘equity’ in this article. The reason is that equity, which is closely related to income distribution, need not be equal to housing consumption distribution; income inequalities do not have to fully reflect particular housing inequalities. The broader meaning of the term ‘effectiveness’ is therefore more appropriate for the purpose of housing policy assessment (see Lux, 2009).

³ Kornai (1992, p. 255) has argued that socialist regimes used non-wage benefits such as housing allocation as an effective means of social control. Individual consumption of goods and services obtained through money payments was constricted (deliberately or otherwise) and the share of collective consumption goods increased. As a result, the liberal free market component of social relations declined as state bureaucratic (communist) control increased.

⁴ An economic subsidy is a public subsidy that is often not reported officially and is typically distributed indirectly. It equals the difference between the market and the real (regulated) price of a good or a service. It is similar to lost income or opportunity costs. In housing, subsidies are the difference between regulated and market rents or the difference between preferential and market dwelling prices. Give away privatisations were the primary forms of housing subsidy during the 1990s. The literature on the post-socialist transitions process has been surprisingly silent on this fact despite its importance.

Additional information

Funding

The article was prepared under the Research Project sponsored by the Czech Science Foundation [grant number P404/12/1446].