2.2.3. Privatisation and Restitution

Nations, n.d). One of the reports by the UN-Habitat (2011) approximates the number of people living in poor conditions in cities around the world, at around 1.1 billion (UN-Habitat, 2011). The right of housing includes many aspects, not just the right of owning a dwelling. For example, the essential services such as utilities, water, electricity, and safe communities are included (United Nations, n.d). Besides being legislated, it became an official strategic area of national interest and a major political objective (Alpopi, 2014). The housing market during the transition period from communism to democracy was affected by two main policies: privatisation and restitution.

2.2.3. Privatisation and Restitution

The TENLAW (2014) report shows that after 1990 around 2.2 million dwellings were sold to their occupants at very low rates which solved the transition from a nationalised system to a private one (TENLAW, 2014). Privatisation, was at that moment, an affordable solution and it is different to what is happening today with the housing market as there is a clear shortage that affects especially three groups: the population at risk of poverty, young adults, and the mobile population (TENLAW, 2014). The transfer of property from the state to private individuals had negative and positive consequences. From the TENLAW (2014) and Habitat (2015) reports a list of these consequences can be compiled:

 The numbers of social houses decreased (Habitat, 2015). The government was not able to provide social homes because of the economic transition from state controlled economy to capitalism (Habitat, 2015). The state before the revolution invested 8.7% of the state budget into housing and afterward it was less than 1% (Iacoboaea, 2006). This is linked to what the

Habitat for Humanity (2015) report refers as replacement value (Habitat, 2015). This represents the money gained from selling the homes, which is reinvested into building new social or affordable homes and balance the needs of the housing stock (Habitat, 2015). In Romania through privatisation, these costs have never been covered, as it was not intended to have this sustainable aspect (TENLAW, 2014). The ideology behind privatisation was that the users had the right to their homes (TENLAW, 2014).

 The new proprietors had to deal with the maintenance of the bought homes. The housing was of low quality and people could not afford the housing costs. (Habitat, 2015)  The new buyers were the old tenants and the way they became owners was accessible (TENLAW, 2014). They had to pay 10% of the government appointed price for their accommodation in advance and afterwards several instalments which were loaned by the state (TENLAW, 2014).  The new owners benefited after the rise in inflation in the early 1990s which lowered their loan massively (TENLAW, 2014).

Other effects identified by Dan (2003):  The fast change from one system to another created a vacuum of policies and laws regarding housing standards and maintenance (Dan,2003).  It lowered the availability of inexpensive rent (Dan,2003).

The Habitat for Humanity report concludes that “It was a profitable measure for the tenants at that moment but it created a disadvantage for the next generations” (Habitat, 2015, p. 90). This is also supported by the Eurostat (2013) statistics that show that the young adults and the poor are the most affected by the lack of housing (Housing Europe, 2015). Tsenkova (2014) indicates that at that moment, it was the logical measure in order to promote the economic stability of the individual and of the new capitalist market (Tsenkova, 2014). She also shows that it was a system implemented by most of the former communist countries and on short term, it helped the population survive the transition (Tsenkova, 2014). Beside privatisation Romania also implemented restitution. This gave the former owners, whom the communists confiscated their homes, the right to retake their properties and evacuate the tenants (Tsenkova, 2014). Although it was considered the just measure, it was highly abused of, because of corruption, and many were left without their homes and without any affordable solutions (Tsenkova, 2014).

This section has shown that in the last 80 years Romania has been through several housing crises and that the communist control has had an impact on the housing stock. The methods used by the communist regime to deal with the housing needs, have affected the way Romanians think about housing in general and especially affordability (Panaitescu, 2012). The regime policies and