The Ministry of Rural Development is planning new proposals to change the terms of a subsidy program called Construction. This change should expand the range of people who can acquire social housing. The changes would also apply to extensions, renovations, and refurbishments of dilapidated buildings.
Currently, applicants whose salary is less than 1.6 times the minimum subsistence level are entitled to rent a social apartment. If a municipality provides 100% subsidy for social housing, it must do so for at least 20 years. Therefore, the municipality is naturally interested in whether it can provide a sufficient number of homes to eligible applicants. If eligibility for social housing is related to average wages, the target population may be extended to younger people
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At present, it is the average wage standard that determines eligibility for flats. Currently, 0.7 times the average wage of a one-person household is being considered. This means that an income of up to approximately 23,000 CZK would qualify for tenancy. The average wage, unlike the minimum living wage, has increased every year, while the minimum living wage has not changed since 2012. The living wage for adults is SEK 3 410.
The state subsidizes the full cost of social housing construction to municipalities. However, this subsidy only applies to one-fifth of the apartments in a specific purpose-built building. For the remaining apartments, municipalities may use regular commercial loans or borrow from a housing fund. What is new is that the subsidy will also apply to extensions and renovations of dilapidated houses. This reform will allow municipalities to reconstruct unoccupied buildings within the municipality and not necessarily to build on greenfield sites.
The proposal also provides for cases where a family\’s income exceeds certain limits. No one can evict the family, but the municipality must rebuild the apartment into a new social flat, simply by changing the apartment\’s status to Affordable.