The Polish government has approved funding for construction of 30,000 new apartments providing low-cost rental housing in five of Poland’s largest cities, with the “Fundusz Mieszkań na Wynajem” plan.
Not enough apartments to rent in Poland
Conflicting statistics from Eurostat state 4% apartments in Poland compared to 40% in Western Europe, numbers that cause outright disbelief by locals. Without knowing the exact measures used, it’s possible that undeclared income from black market rentals, or unoccupied former communist buildings, are skewing statistics.
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Funding consists of 4.5 billion złoty in loans from state bank “Bank Gospodarstwa Krajowego” and 750 million złoty in aid. The target cities for construction are Warsaw, Katowice, Wroclaw, Krakow and Lodz. Some apatments have already been deployed in Gdansk and Poznan. Long term the plan is to build 90-100 thousand apartments.
The government assumes at least 50% of the beneficiaries will be families with children.
There is skepticism that the prices will be at a significantly lower price, as prices for Fund rental apartments already available in Poznan are no cheaper than market rates.
Apartment blocks in the program should meet “average” standards for family housing. Assigned space is 35sqm for a single, 50sqm for 2-person household and an extra 10sqm for each person in the family. Rent in the apartments should be 40 to 50% lower than commercial levels. Where a tenants’ income climbs above the eligibility threshold, rent may be increased by 1% for every 1% their income is above the threshold. Income reviews are made every three years.
According to Maciej Górka from accommodation portal domiporta.pl the prices are too high.
The purpose of starting the programme was to provide homes for a relatively lower price than current market prices. Poznań has shown that the Fund did not propose rents lower than those that are in reality offered on the market. Probably in Gdansk, the situation will be similar, because of how the Fund is structured, it is a commercial project and it has to make money. Also, if you look at the current Gdansk prices, we can assume that the cheapest flats will begin at 1300 złoty. We are talking here about efficiencies. A 2-bedroom apartment for the price it will be approximately 1700-1800 zł per month, plus bills.
..After the initial prices suggested by the Fund, there was a lot of interest, but the smallest housing sizes, and largest premises, unfortunately, are expensive, therefore, relative to the market probably unattractive.
..The most awaited location is Warsaw, because here the rental market is currently the biggest, with the highest profitability, but the highest prices. Also the people interested in renting apartments from the Fund in Warsaw may feel disappointed because of this: that the present price proposals are in line with what the market offers. It’s not cheaper.
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If all the goverment subsidised construction is doing is providing housing at the same as market rates, it’s difficult to see the justification of spending tax money in this way, but the full story will not unfold until Warsaw rental prices are made known.
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