Social Housing Initiatives as chance for your own apartment in times of crisis

The housing needs of Polish society are still enormous, and the current level of their satisfaction is insufficient. The present, very difficult times of the post-pandemic crisis, intensified by “putinflation” and the war in Ukraine, only exacerbated the housing deficit that has existed for years. Will Social Housing Initiatives prove to be a remedy in this situation?

CEO of National Property Stock, Arkadiusz Urban:

The government program of Social Housing Initiatives (SIM) implemented by National Property Stock is directly tailored to today’s times of the post-pandemic crisis and “putinflation”. Times when more and more people lose their creditworthiness but still have rent capacity. During the year since we are implementing this new program, we have established, in cooperation with local governments, 30 SIMs with the participation of over 350 municipalities. For most of them, it is also a great opportunity to implement local anti-depopulation, dignity and pro-development policies. Small and medium-sized municipalities without the government assistance offered by National Property Stock would often not be able to satisfy their most basic housing needs. Moreover, the SIM project offering the construction of apartments for rent with a moderate rent with the option of coming to ownership is a program aimed at sustainable development and equal opportunities for the Polish population, regardless of the place of residence. This is because it gives the inhabitants of smaller centers the opportunity to pursue the same life plans as the inhabitants of larger cities. It is also an important element of raising their standard of living in the place of residence, and for many a chance to get out of a difficult living situation by creating the possibility of obtaining ownership of their apartment.

We provide a kind of fishing rod both for municipalities and, above all, for people who may leave the dead end between commercial flats that are inaccessible to them and the lack of ownership opportunities in the already scarce public housing stock. This is because local governments receive 3 million PLN from the government to take up shares in the new SIM company. Thus, participation in the SIM is, in principle, cost-free for individual municipalities. This is important especially for smaller local governments, which often do not even have a municipal company, let alone building apartments. In addition, each SIM investment can count on 10% of non-returnable support from the Government Housing Development Fund and up to 35% from the Subsidy Fund of Bank Gospodarstwa Krajowego. Additionally, with the entry into force of the National Reconstruction Plan, we also expect an increase in grant support up to 60% if certain energy efficiency criteria for a building are met. This could mean the possibility of reducing the first payment from future residents, as well as the loan, which is not without significance nowadays – because although the loan from BGK for SIMs is preferential (without the bank’s margin and with a three-month WIBOR), currently it’s the interest rate increases drastically, which means that we must also think about another support mechanism in the form of a “guarantee fund”, so as not to shift this additional burden onto municipalities or future residents.

It is worth remembering that the Social Housing Initiatives undertake the construction of apartments not for profit, but to achieve the goal, i.e. to build apartments for rent, with an option of purchase, with a moderate rent. Therefore, the SIMs do not have to “squeeze” the residential space out of a square meter of land during the implementation of the investment in order to maximize profits. Therefore, when implementing individual investments, aspects such as friendly surroundings, recreational areas, increased energy efficiency of buildings, street furniture, etc. are taken into account.

Local governments see all this and see its advantages, hence their great interest in the Social Housing Initiatives program implemented by the National Property Stock. This is one of the best examples of cooperation between the government and local government. At the same time, for residents, it is a chance to have their own apartment with the option of obtaining ownership.

Therefore, we are still observing a growing interest on the part of other communes. We estimate that even every second commune in Poland, which means about 1-1.2 thousand communities, may be included in the SIM program. So we are actually 1/3 of the way in the implementation of the Social Housing Initiatives program. Importantly, we made the “first shovel” on the investment with the participation of National Property Stock already in June this year. We would like to keep this pace, because already this year we will have building permits for approx. 4 thousand apartments, and next year about 8-10 thousand. For comparison, it is worth adding that so far only a few of the largest developers in Poland have built approx. 3,000 apartments per year.