Housing in the hands of politics

It is estimated that up to 85 % of new housing units built by 2008 still remain unsold inSlovenia. The Slovene government has planned to buy some of these housing units and lease them as subsidized social housing. Many objections have been raised against this intention, as this could be a message to the investors that the quality of new buildings is not important, as when the new housing is not interesting enough for the market, the state is always there to help.

The spatial planners inSloveniaare aware of the fact that apartments are not a typical good. They are therefore upset by the idea of buying the surplus of the housing market by the government even if this plan is backed with good intentions, such as the solution to the crisis in the construction industry or the provision of sufficient amount of social housing.

Media have reported about the critical views by experts from different backgrounds. One of them is the economist dr. Andreja Cirman. She claims that the excess supply of apartments on the market is „largely defective“. She considers that the apartments remain unsold simply because of their price, which is not in line with their quality and location.

“Celovški dvori” housing project in Ljubljana is still predominantly empty. 

If the “defective” products will be bought by the government and the stock of social housing will be made of them, this will result in additional economic loss. The fact is that “defective” apartments are not just like any product, which can be discarded, destroyed and disposed of.  It is not as simple as to just cover the costs of wrong business decision. Their inappropriate location, high floor-space indices, low quality of construction and other weaknesses make them unattractive to buyers and unsuitable for living. “Defective” apartments are located in “defective” buildings that degrade the living environment. The living environment is a public good, and this is why the construction should be planned and such degradation should be avoided. “Defective” apartments are therefore a national economic burden. Its renovation is possible only through integrated housing and urban development policies. If the government will purchase such a poor housing stock as it is, this will be the message to the investors, that the quality of housing inSloveniais not important. This would result in continuous construction of low quality housing stock in the future as well. Good quality of housing is not without reason a key component of successful urban development policies worldwide.

The article was first published in the 3rd Biannual Report of the Slovenian URBACT National Dissemination Point

Original article (in Slovenian)

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