The social housing sector in Prague and Warsaw: trends and future prospects

Abstract

The paper provides an overview of trends and processes of change affecting new social housing provision in Prague and Warsaw. The local responses are reviewed within the context of changes to the national housing system defining the performance of municipal and non-profit housing sectors. The research analyses the mix of policy instruments implemented in three major policy domains—regulatory, fiscal and financial—to promote the production of new social housing in the two cities. The system of new social housing provision is examined as a dynamic process of interaction between public and private institutions defining housing policy outcomes. The outcomes are evaluated through a series of indicators related to housing output, stability of investment, differentiation of rents, affordability and choice. The overview demonstrates how significant shifts in regulatory and fiscal policy, coupled with decentralization of responsibilities for social housing, limit the opportunities for more efficient performance in the sector and its growth. This is particularly evident in Warsaw, where the sector operates as a social safety net. New social housing in both cities has better quality and remains affordable, but access is constrained and waiting times have increased. The research highlights the problem of declining output, dwindling financial resources, and lack of cost recovery due to universal rent control. This is eroding the sustainability of social housing, potentially leading to lower investment and subsequent privatisation. In Warsaw, housing allowances are a municipal responsibility making the liberalization of rents difficult, while Prague has moved in the direction of rent deregulation with a more robust system of means-tested housing support provided by the central government. Such policy choices map a different trajectory for the future of social housing.