Social Housing in Europe

What is social housing?

A new act on subsidies for housing development, valid since January 1st 2011, has adopted a definition of social housing as “housing acquired with use of public funds, addressed for adequate and humanly decent housing of individuals who are not able to ensure housing with their own effort and meet the conditions under this Act. Social housing is also permanent housing in residential buildings or accommodation financed from public funds and provided within the care under specific regulations”.

 In the Slovak Republic, two types of housing stock can be considered as social housing: new social flats constructed using a state subsidy under the ownership of municipalities, earmarked for social needs and occupied according to defined and a small part of the existing public stock owned by municipalities.

As regards to this latter, it should be noted that dwellings are occupied by sitting tenants of former state owned housing who have not bought their dwellings and who still benefit from a permanent right to use the dwellings and regulated rents which are usually extremely low.

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Who provides social housing?

Social housing is provided only by municipalities. Until the end of 2010 there was a legal opportunity to access public funding for social housing provision by non-profit organisations, created and controlled by the municipality, but this option was never really implemented and it is not contemplated in the new legislation.

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How is social housing financed?

New social housing construction is financed using a combination of subsidies and soft loans. Funding comes from state budget and the State Housing Development Fund, a revolving fund created in 1996.

Subsidies cover up to 30% of construction costs, excluding land price, and soft loans have an annual interest rate of 1% with a repayment period of up to 30 years and with maximum 80% loan to value ratio.

To increase provision of new public housing for low income households, the programmes comprise a third element, a subsidy programme for technical infrastructure necessary for housing construction. The financial responsibility of running the social housing stock, however, rests with the municipalities. Social housing rents in new municipal housing are based on long-term cost recovery and they can be up to 5% of the construction costs per year. Housing allowances are available only for those whose income is below the minimum subsistence level.

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Who can access to social housing?

The main criterion for access to housing is determined by the income level of the households. Limits to floor area of the dwellings also apply. Socially vulnerable groups may be given priority in the lists of applicants (handicapped, single parents with small children, deinstitutionalized patients, mentally handicapped and homeless). The final decision on the actual allocation rests with the municipality. In the case of municipal stock let to tenants of former state owned housing, no specific criteria apply.