Development of housing finance system in poland - lessons learned

Abstract

As in other countries under economic transformation, a complete, efficient system covering housing needs and enabling effective development, allocation, and operation of the resource and beneficially affecting the entire economy has not been in place in Poland yet . Its weakest link has turned out to be the housing policy, the relevance of which was crucial because the system had to be built from scratch. From the transformation outset there was no comprehensive and based on foreign experience (while taking Polish particularities into account) concept of the sector’s mechanism in place. First and foremost there was neither a vision of the institutional and regulatory structure, nor an implementation action plan. Some partial aims were pursued instead, and unrealistic solutions searched for to improve the population’s housing condition with no capital expenditure and at no social cost. These were typically found at financial institutions that were supposed to generate surplus capital by themselves, or in budgetary expenses that due to a multiplier effect were to convert into budgetary surplus. Changes in the sector were mainly prompted by external factors (inflation, budgetary deficit, banking system reform), while the housing policy was rather intermediate intervention oriented. The residential sector by decision makers was treated as a social shock absorber and a political battlefield. Therefore more difficult decisions aimed at development of an efficient market structure were avoided (rent raises, evictions), political promises were made largely in vain, and the public housing resource was privatized by means of giving it away. In a similar manner, i.e. with prior assessment of neither decision purposefulness, nor target meeting effectiveness, the sector subsidising policy was implemented. Analysis of the successive governments’ official housing programmes and practical actions thereby undertaken shows that over the last dozen or so years the housing policy was aiming at residential development, and not at the entire