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Rental housings for 20 thousand families. Is the government planning on creating a Rental Apartments Found?



The government is about to initiate a Rental Apartments Found. The plan is to spend 5 milliard PLN over the period of 4 years, starting in 2014, on apartments for 20 thousand families.


When is the bill about to be drafted and who is going to manage the Fund?


The biggest asset of such apartment would be the amount rent payment. It is said, that these rent amounts would be 60 per cent lower than usual commercial ones. Creating a Fund is one of government's remedies to improve poor economic conditions and bring rental market to life. The Found is to be managed by Bank Gospodarstwa Krajowego since next year.


The organization, however, requires the adoption of a new act, and the bill is not even prepared yet. Considering the length of legislation process, it is highly doubtful that the act will be adopted next year. And still the government is about to have other extra expenses connected with the commencement of the Mieszkania dla Młodych program then.


The tight budget is another obstacle, and as for now, it seems nearly impossible to find any extra money to spend on cheap apartments. The housings, if purchased, would become a frozen capital, which is to be returned, but in the long-term perspective. It is estimated, that the rate of return would be approximately 4 per cent.


The government buys form developers

Starting the Fund means purchasing housings form developer companies. It is said that the government would buy app. 2,000 apartments in the biggest cities in our country first. The plan is to invest in whole buildings, rather than buying separate apartments, which would facilitate the management. Administration and management of such buildings would be entrusted to companies which specialize in this kind of economic activity. The companies would be selected by tender.


Boosting the rental market

Functioning of the Found is aimed at boosting the rental market, which - in comparison with the western countries - is poorly developed in Poland. There are relatively little investments in rental properties, and as a result, rent payments are higher than in the western Europe.


The poor condition of the rental market stems also form the fact that the average salary in Poland is much lower than the average salary in the West. Thus, the relation of rent to salary reflects the weakness of Polish rental market. Rent payment lies more heavily on the budget of an average Polish person than on the bugdet of an average German or Frenchman.


So, if the Found actually comes into life, rent rates would significantly drop. As a result, the interest in rental properties should increase, especially among those less wealthy and those who, having their own capital, don’t want to make a long-lasting commitment to the bank.


Mateusz Kozłowicz


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