Government tackles social housing profiteering

The Czech government has moved to curb widespread profiteering from social housing. The draft legislation, which was approved by the cabinet this week, should stop hostel owners from charging exorbitant rents for substandard housing. However, social workers say that the socially disadvantaged need access to the housing market which is often denied due to their race.

Photo: Filip Jandourek

There are around 4,000 hostels in the Czech Republic providing substandard accommodation to those who have nowhere else to go: the poor and the unemployed, and, in many cases, the Roma community.

The lack of state or communal social housing projects has turned such hostels into a lucrative business, with owners often charging enormous rents covered by state welfare payments. Official figures show that in 2011, 850 million crowns were paid out in housing welfare; since then, the amount has skyrocketed to 2.8 billion.

The government now wants to end this practice by introducing legislation that should cap rents in these facilities, and change the rules for providing housing welfare payments. The bill was put forth by Minister of Labour and Social Affairs Michaela Marksová.

Michaela Marksová, photo: Filip Jandourek

“One of the measures that will prevent such profiteering is that welfare payments will relate to the living area. Until now, hostel owners place eight people in one room, and each of them received the highest possible welfare payment. That will no longer be possible because these people will be legally considered a household, and the payments will not increase according to the number of people.”

The legislation also caps the rents that can be charged to welfare recipients to amounts in line with the local housing market. In addition, local authorities will have to approve accommodation standards in these hostels as a condition for providing welfare payments. And Minister Marksová says the government is set to increase the number of staff at Labour Offices in affected areas who will be making sure all these conditions are met.

The previous caretaker Czech government also attempted to clamp down on social housing profiteering when it tried to come up with a framework for the issue. But its planned overhaul came under fire by NGOs and social workers who said it would in fact make things worse by cementing the status quo.

One of the NGOs working in socially excluded communities is People in Need. The group welcomes the government’s latest effort but says much broader changes are needed to ensure everyone has access to the housing market. Martin Kovalčík is a spokesman for the NGO’s social integration programmes.

Photo: Jan Beneš

“One of the most common reasons why people end up living in those hostels is that they cannot afford to pay deposits to landlords. Also, there is rampant discrimination: when a Romany wants to rent, it’s quite common they are turned down just because of their race, which makes it extremely difficult for these people to rent regular apartments or houses.”

Mr Kovalčík says one way cities and towns could help open up the housing market for the socially disadvantaged would be to assist them with security deposits while providing guarantees to landlords.