Czech rents in social housing could rise

23 March 2021

Rents in social housing could rise only if inflation per household exceeds five percent. Leases for these apartments would be for two years, subleases would be prohibited. This presupposes the overall amendment of the group of deputies of the CSSD and ANO, including the Minister for Regional Development Klára Dostalová (for ANO) to the social democratic draft on public benefit housing companies, which is in the second reading of the parliament.

The parliamentary regulation contains, for example, the definition of a social flat and the circle of people who could apply for its allocation. The condition would be that they have low incomes – for example, for a three-member household to the average gross monthly wage, and unsatisfactory housing. The tenancy agreement would be renewed every two years if it were found that the tenant could no longer secure adequate housing on the market. The marginal amount of rent at the time of the effectiveness of the law would be 64.70 crowns per square meter per month, it is stated in the amendment, which renames the draft to the law on the availability of housing.

The amendment continues to provide for the possibility of establishing a public benefit legal entity in housing. Its purpose would be to provide housing at a cost. These public benefit companies would be registered by the authorities in compliance with the legal conditions. They would build or buy houses on a non-profit basis. If they were only investors in the construction, the contractor would be entitled to a profit of up to 15 percent according to the regulation.

The original Social Democratic draft also assumed that municipalities would gain the right to ask up to a quarter of new flats for their purposes from developers when permitting the construction of flats. Developers would only pay the cost price. The applicants promised to reduce the price of flats by up to a third from the law. Addressed analysts and developers, on the other hand, stated that the law would make apartments more expensive.

The opposition ODS and TOP 09 did not push through the rejection of the bill in the first reading or its return to the authors for revision, which is generally perceived as a softer form of rejection. The draft is discussed by the Administrative, Constitutional-Legal and Social Committee.

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