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USAID Mission to Poland
Europe & Eurasia
>> E & E Home >> Poland >> Assistance Areas >> Housing
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Activity Reports
Report on Housing
Housing
Work to solve Poland's pressing housing problem received considerable and sustained SEED-funded USAID assistance. A description of the assistance is provided below, or you may wish to consult a complementary historical view prepared by the USAID / Poland staff. You may also wish to consult a report developed by a USAID contractor. For more detail, look up descriptions of key activities.
We also suggest you refer to two housing-specific websites: http://www.polandhousingfinance.org (in English) and http://www.kin.cc.pl/polhousfin (in Polish), and the Development Experience Clearinghouse (type Poland into their search engine) for more reports on housing issues regarding Poland.
USAID assistance to develop Poland's housing sector
Over the last 10 years, the Polish housing sector has evolved from a centrally planned system, which was heavily subsidized and inefficient, to a market-based system, which is more efficient and linked to real demand in the growing Polish economy. The process of restructuring the housing sector was difficult and took a long time. In the first half of the 1990s, annual housing production dropped by half -- from over 134,000 units in 1990 to less than 62,000 in 1996. Since 1996, housing has grown steadily at the rate of over 10% annually to over 80,000 units in 1998. Since the official statistics on housing completions suffer from underreporting, a growth rate of 15–20% in housing production seems more accurate.
In large part, the recovery in housing production was possible due to Poland's successes in macro-economic reform, marked by a more than 4% average annual growth of real wages, and significant decrease in inflation from over 40% in 1992 to below 10% in 1998. Nonetheless, housing completion growth would not have occurred at the current scale, if restructuring of the legal and financial frameworks had not been done. In addition, these reforms were accompanied by the difficult process of mental re-orientation of Poles, who had to stop thinking about housing as a social good, which the government owes to every household by definition, and to assume for themselves the primary responsibility for providing shelter.
USAID played a major role in the reform of the housing and housing finance sectors in Poland. USAID started its housing reform support program in 1991. This program had three main goals:
- the development of a non-subsidized, sustainable housing finance system;
- direct assistance to the private participants in the real estate market (investors, developers, builders, brokers, appraisers and property managers) to increase competition and the quality and quantity of housing delivery services; and
- assistance to the public sector to help central and local governments better regulate and allocate limited public resources to support and complement a supply of private housing.
Market System
In the 1990s, USAID, working hand in hand with the GOP's Ministries of Finance and Construction, the Polish Banks Association, and the General Inspectorate of Banking Supervision, played a primary role in helping create a number of key components for a market driven housing sector. These components, include:
- the Mortgage Fund, an apex mortgage refinancing entity which leveraged commercial banks’ interest in mortgage lending and provided them both the long-term capital and the know how necessary to initiate mortgage lending;
- a comprehensive mortgage lending training curriculum used by three bank training institutes;
- the Housing Finance Committee of the Polish Banks Association, which ensures exchange of experience among particular banks and represents mortgage lenders’ interests in front of government, parliament, and other partners; and
- a dialog between the mortgage industry and the General Inspectorate of Banking Supervision on the regulatory framework for mortgage lending in Poland.
USAID was a major donor organization supporting the development of market driven housing finance in Poland. Over the last five years, the volume of non-subsidized mortgage loans extended by Polish banks has grown from several hundred in 1995 to more than 100,000 in 1999. Currently, over thirty Polish banks offer various mortgage products for their customers.
Professional Associations
USAID also successfully supported other participants in the private real estate sector. Working in cooperation with eminent U.S. organizations such as the Eastern European Real Property Foundation (National Association of Realtors) and the National Association of Homebuilders, USAID had major input in the establishment and strengthening of Polish sustainable professional organizations -- real estate brokers (1500 members), appraisers (3000 members), builders and developers (over 1500 members). In each case, the Polish partners not only were assisted in organizing issues but also supported through the introduction of professional standards and comprehensive training programs. Polish federations of real estate brokers and valuers were among the leaders in the establishment of the intra-regional professional networks, which allow for exchange of experience between real estate specialists from various central European and NIS countries.
Research and Policy Development
To assist the public sector in better management of public housing policy, USAID, accompanied by a growing number of local research and consulting organizations, provided advice to the GOP in drafting a new housing strategy, which was adopted by the government in 1999. The new strategy attempts to increase the effectiveness of government interventions in the housing market. It also provides an alternative set of instruments allowing for withdrawal from the income tax exemption mechanism, currently used to support new construction. Abolishment of the income tax deduction is a key component of a tax reform prepared by Deputy Prime Minister Balcerowicz.
Housing Strategies
USAID has also supported the development of local level housing strategies, models of rent policies, and alternative approaches to restructuring and privatizing property management services. Over the last decade, approximately one hundred Polish local governments were assisted in various aspects of local-level housing. Under a program managed by the Cooperative Housing Foundation, a group of 35 self-sufficient local housing support agencies were created. Over the lifetime of the project, they supported the construction of over 1,700 affordable homes in democratically-managed cooperatives, leveraging more than $30 million in investment. Another USAID housing program supported the creation of over 70 local-level, not-for-profit Rental Housing Societies (TBS). Estimates suggest that these TBS designed projects and ressociated financing for the development of over 1000 rental units worth more than $20 million.
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Last Updated on: March 13, 2002 |
