2.3.5. Social Housing

2.3.5. Social housing

The Romanian government defines social housing, in the Housing Law no. 114/1996 as a dwelling that is assigned by the state to an individual or a household that cannot afford the costs of owning or renting a home (MDRAP, 2016). The social houses are rented by their occupiers who receive financial help from the state (MDRAP, 2016). The rent is much lower than the market value and is calculated at 10% of the yearly household income, and paid monthly (MDRAP, 2016). Local authorities manage all social homes (MDRAP, 2016).

A study from 2005 shows that, in Romania, from 1000 applications for social housing, only 165 are solved. (Constantinescu and Dan, 2005). In Romania, only 2.5% of the population rents subsidized homes, whereas, in the EU the average is around 17% (Constantinescu and Dan, 2005). This results in almost 85% of unresolved cases and shows an inefficiency of the local authorities in dealing with this issue.

Local authorities are the only investors in social housing in Romania (MDRAP, 2016). This is also the case for other European countries such as Bulgaria, Hungary, Slovakia, Estonia, Lithuania, and Latvia (Tsenkova & Polanska, 2014). All these countries have similar historical context, especially the fact that communist regimes ruled them until 1990 (Tsenkova and Polanska, 2014). This indicates that the way the communist regimes dealt with housing (see section 2.2.1), may have influenced the local authorities in having monopoly over the social housing. This is contrary to other countries from Europe with different historical contexts. For example, the Housing Europe Report from 2007 shows that in western European countries, in the 20th century, because of urbanization and changes in the industries, private investors were the main developers of social housing (Housing Europe, 2007). The report indicates that companies and charities tried to provide housing to a large mobile population of workers (Housing Europe, 2007). Habitat for Humanity 2015 study shows that today, there is an increasing number of public-private partnership models related to affordable housing all around the world (Habitat, 2015). These providers are non-profit or minimum profit associations that use a different mix of financing methods, such as subsidies, the private market and funds or guaranteed loans (Habitat, 2015).

In Romania, there are not any public-private investments in affordable or social housing (Habitat, 2015).

In conclusion, the housing situation now in Romania is in a crisis that affects young adults (section 2.3). Lack of housing and bad quality housing affect the user’s health and development (section 2.3). There are present and past factors that accentuate this crisis, such as: the rising prices of homes and the communist large accommodation stock (section 2.3). Some of the major findings are:

 The costs related to housing are increasing and 15.1% of Romanians are overburdened, which is higher than the European average (section 2.3.1).  There are around 10 million Romanians that live in overcrowded conditions, the highest percentage in the EU (section 2.3.2.). There are more than one million unusable dwellings in Romania, due to low quality.

Six million people use less than 8 m2 of space compared to the 38 m2 EU average. (section 2.3.2.)  Severe house deprivation is the worst in the EU and only 66.7% of homes have running water (section 2.3.3)  The rising house prices have made it more difficult for young adults to buy a home and they have a small share of the housing stock, 12% (section 2.3.4)  The local authorities are inefficient in providing social housing, with 85% of applicants not receiving one. There are not any private investments in affordable or social housing. (section 2.3.5)