Given the persisting deficit of flats available for low-income households, NIK took under the microscope actions taken by municipalities from 2016 to 2019 (1st half) performed as their own tasks, also with the financial assistance from the state budget for council housing.  

As a result of irregularities identified by NIK in most municipalities, there was a deficit of funds to cover operating costs of council housing resources, and also to pay for modernisation and repairs. NIK stressed among other things: an inefficient collection of receivables for flat rent and inappropriate rental policy, including non-enforcement of payment deadlines. Only in three municipalities, proceeds from rent covered the ongoing operating costs. In none of them did they cover repair and modernisation expenses. though. As a consequence, the buildings and flats were closed down due to their poor technical condition. The buildings constructed before 1945 make up as much as 81 percent of all council housing resources of the audited municipalities and there are about 50 thousand vacant buildings.

Only 2 in 11 audited municipalities motivated tenants to pay their debts. NIK positively evaluated that practice as it translated into debt reduction.

A graph showing that the number of council flats in council housing resources fell from 886.7 thousand flats in 2015 to 840.4 thousand flats in 2018. Source: GUS data

Approx. 10 percent of Polish people still live in overcrowded flats in a poor technical condition. According to Eurostat the deprivation ratio (inability to meet basic needs adapted to European living conditions) places Poland fifth from the end in Europe.

An infographics showing the number of indebted council flats: in 2013: 379 085; in 2015: 335 108; in 2016: 403 906; in 2018: 390 535. Source: GUS data

Despite the actions taken by the audited municipalities, they did not manage to effectively help the persons waiting for council flats. In 11 audited local government units, the number of households waiting for a flat went up by 30 percent and the waiting time was as long as 17 years. The questionnaires in 622 municipalities reveal that in 73 percent of them the housing needs of low-income families were not satisfied.

The Supreme Audit Office established that the municipalities did not analyse the actual economic situation of the local community while identifying the needs of persons seeking housing assistance. As a result, the income criterion could have been wrongly defined and thus the number of households waiting for a council flat could have increased in an unjustified manner.  

Effective resolutions on the flat rent principles (in 4 of 11 audited municipalities) did not ensure transparent principles of the request review and flat rent procedure. Standardised procedures of social control of the rental process were not in place, either. This made it difficult to address the housing assistance to the economically excluded and neediest persons. The lack of detailed and standardised solutions in this area does not allow transparent allocation of flats.

According to NIK, the following changes are recommended:

-          minimum standards of social control need to be defined,

-          municipalities have to start considering long-term housing programmes as an element of rational housing policy,

-          principles of providing housing assistance should be tailored to the actual needs of municipalities’ inhabitants,

-          municipalities should develop and adopt a long-term housing repair policy aimed to stop the progressive decapitalisation of the council housing resources.

NIK positively evaluated the fact that the municipalities undertook investments to satisfy the inhabitants’ housing needs. Though, those needs were met to a small extent only. Nearly 77 percent of municipalities did not hand over a single building after 31 December 2016.

A graph showing municipalities broken down by the number of buildings handed over after 1 January 2016 until the middle of 2019.  622 municipalities in total. 1 – over 4 buildings (0.2%); 10 - 3.4 buildings (1.6%); 61 – no data (9.8%); 72 – 1.2 buildings (11.6%); 478 – no new buildings constructed. Source: NIK’s questionnaire

Municipalities finance the housing economy mainly from their own funds, subsidised by the resources from the Subsidy Fund of Bank Gospodarstwa Krajowego [or BGK: National Economy Bank]. NIK positively evaluated measures taken by the Minister to simplify the procedure of submitting requests to BGK to subsidise municipal undertakings. Now the requests can be submitted without any time limitations.

The long-term housing programmes - if any - are often incomplete. It also happens that they are not fully implemented which makes it difficult to make rational decisions related to the management of council housing resources.

The Minister of construction and housing industry developed a project of the National Housing Programme and legal solutions enabling its implementation which was positively evaluated by  NIK. Besides, the Minister developed and implemented changes in instruments to financially support the council housing development and maintain the council housing resources in a good technical condition. The Minister’s actions could make the way municipalities manage the council housing resources more flexible. It would be possible thanks to the elimination of system irregularities and weaknesses. Though, most of the implemented changes will deal with rental agreements concluded after the new law became effective.

According to NIK, until 21 April 2019, provisions of the Act on the Protection of Tenants’ Rights significantly limited the recovery of flats to be re-used by low-income households. The changes initiated by the Minister of construction in the above Act increased the municipalities’ competence in managing the council housing resources. In case the tenant’s financial standing improved or the rental agreement was terminated, the municipality could increase the rent. The rent could also be increased in case the tenant had a legal title to another flat located not only in a given city or town but also nearby. The currently available tools enable the municipalities to manage the housing resources more flexibly and rationally. However, these provisions came into force on 21 April 2019 so it is too early to assess their legal consequences.  

Recommendations

to the Minister of Development to:

  • take legislative works to define minimum standards of social control of renting council flats,
  • develop - in cooperation with GUS and the Ministry of Family, Work and Social Policy - ways to obtain data crucial to prepare reports on the implementation of the National Housing Programme to make them a reliable source of up-to-date information. The point is to enable the Council of Ministers to evaluate the efficiency and effectiveness of the Programme.

to municipalities to:

  • take measures to meet the housing needs of low-income households based on up-to-date and reliable long-term programmes for the management of council housing resources;
  • adjust the principles of providing housing assistance to the inhabitants’ actual local needs and available forms of satisfying them;
  • ensure transparency of the process of reviewing and handling  requests to rent a flat, using social control for that purpose;
  • conduct long-term, rational housing repair policy to prevent decapitalisation (decrease in the value) of the resources by more effective use of available funds.  

 

Article informations

Date of creation:
10 August 2020 15:01
Date of publication:
10 August 2020 15:01
Published by:
Marta Połczyńska
Date of last change:
11 August 2020 09:43
Last modified by:
Marta Połczyńska
On the left:an old tenement house. On the right: a modern block of flats © Adobe Stock

Low-income households wait long for council flats

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