Illegal trade in apartments solution to housing shortage

30-11-2000

Whole generations of Czechs, one after another, have grown up, lived and grown old in cramped living conditions. The problem of young married couples being forced to live with their parents, even after they have had children of their own, may be less frequent than it used to be, but it's still a problem. And for a solution to that problem, many are forced to rent illegally. Olga Szantova reports:

In this part of the world, when you speak about people with nowhere to live, you do not necessarily mean 'the homeless' in the usual sense of the word. Many Czechs still live four or five to a room, with two, even three generations sharing a small apartment. True, after the collapse of communism, private construction firms started building expensive apartment buildings, and many people--those who could afford it, of course--started building their own homes.

But that doesn't help the rest of the population, and, as always when there's a shortage, the illegal market flourishes. Pick up any newspaper, and you'll find dozens of advertisements like this. "Will rent apartment in any kind of ownership, rent contract required." Which means: "if you're renting an apartment and don't live in it and wish to sublet it, I'll pay you, and pay you well, for letting me move in and for helping arrange the necessary papers to cover up the fact that I am actually living in your spare apartment illegally."

Yes, many people do have spare apartments, despite the shortage. If you have an older member of the family, a grandmother, for example, your child officially moves in with her, and when she passes away, the grandchild inherits the right to live in the apartment. Now, if he doesn't actually move in, you rent that apartment to somebody else for a much higher sum than the rent you are paying. And, in addition, you charge the sub-tenant for enabling him to move in, in the first place. If the owner finds out, he can take you to court, but it takes years before the issue is even dealt with. And as long as regulated rents remain low, you can make a very nice profit during that time.

The only solution, many say, is to do away with subsidized rent, so that someone who rents illegally won't be making such a profit. Rent has traditionally been very low, staying practically the same from 1964 to 1992. It then went up fivefold but still remains low and is kept that way by a law which covers 90 percent of all apartments in the Czech Republic.

Apartment building owners are calling for change, because the rent they collect won't even pay for maintenance. And nobody would think of building cheap housing if he can't make a profit. But the government is reluctant to take the unpopular step of total deregulation. Incomes in this country are low and many say a third of the population could not afford to pay higher rent. So, while the solution could end the illegal market in rented apartments, it could, at the same time, considerably increase the number of homeless people in the true sense of the word.

30-11-2000