The residential dwelling`s rental market in Poland. Slow - - PowerPoint PPT Presentation

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Funded by the European Union

The residential dwelling`s rental market in Poland. Slow development.

ERES Conference Regensburg University 10th June 2016 Andrzej Rajkiewicz National Energy Conservation Agency, Poland

General information about Poland

Population 38,5 million Area 312 000 km2 Inflation rate: -0,5 %/y (2015) Houshould`s disposal income: 320 €/person/month (2014) Houshold`s expenditures: 267€/person/month (2014) Dwelling cost: 20% of houshold`s expenditures (2014) Energy cost: 11,5% of houshold`s expenditures (2014) GDP per capita 10 675€ (68% UE average) 1€=4,4 PLZ (February 2016) 50% of population live in detached houses, 50% in live in dwellings 80% of total housing stock constructed before 1985 uses 2-3 times more energy for heating than the current regulations require dwelling overcrowding index 44,2% (17,1% in EU)

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Housing policy goals

1945-1989

• after second world war losses and due to industrialisation and

urbanisation, typical was centrally-steered construction of large settlements by housing co-operatives and enterprises in order to assure low- cost dwellings, being in co-operative, municipal or state institutions and enterprises ownership 1990 –

• the transition of Poland towards market economy caused large

scale privatisation of the dwellings located in the municipal and

• ther buildings, which become the form of condominiums, while

the housing co-operative survive rather as facility managers of existing housing stock

• the role of extension of the housing stock based on increasing

demand on dwellings has been undertaken by private developers, which construct the multifamily buildings in order to immediate sale of dwellings to private persons, who form automatically the condominiums

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Housing policy goals

1995 -

• rental dwelling`s state program (called TBS, implemented by

municipal special purpose companies), for low income family, available for housholds, which monthly disposal income doesn`t exceed 1,3 of regionally typical salary, 93 000 dwelling so far, next 30 000 during commitment by BGK bank running the special fund 2014 –

• Rental Dwelling`s Fund of BGK – commercial fund for

institutional creation of new dwellings for rental purposes, fully equipped and located in good urban areas 2016-

• 03 June -Government`s announcement about new program for

construction of low-cost buildings for rental purposes exclusively, with buy-out option by tenants

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Funded by the European Union

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Residential dwelling`s rental market data

Households structure in Poland by ownership title of flat

37,8% 17,6% 16,1% 9,5% 4,2% 0,5% 7,6% 1,4% 0,6% 1,4% 3,4%

• wn buidling
• wn apartment

cooperative familly relation rented from private owner rented from cooperative rented from local authorites rented from the State Treasure rented - social (TBS) rented from employer na

4 % of dwellings are rented based on market prices (EU28 average=19%) 12% of dwellings are rented for rents below the market level (UE28=11%)

Financing schemes for refurbishment

• f residential buildings

Thermal refurbishment Fund (1998-2008)

• the program provided a 25% subsidy to the loan extended for
• wners of buildings (home-owners assocications, co-operatives,

private ones, public – municipally owned, special social purposes with not limited ownership) for up to 80% of total cost of thermal refurbishment measures

• the precondition was to achieve at least 25% energy savings

through measures to be financed, confirmed by the energy audit

Creation of the financing scheme – justification

Act of 1998

Reduction of heating cost covered by households by 30%-40%, Improvement of technical standard

• f 50 000-100 000 buildings,

Reduction of energy intensity of budgetary sector (schools, hospital

• ffices)

Increase of Energy security through saving

• f 7-14 million Mg of coal,

Reduction of green-house gases emission and other negative environmental impact, Creation of several dozen of thousand of work places, Facilitation social acceptance for marketization of energy prices

Adjustment and improvement of the scheme

Thermal refurbishment and renovation Fund (2008-)

• the program provides a 16% subsidy to the loan extended for
• wners of buildings (condominiums, co-operatives, private ones,

public – municipally owned, special social purposes with not limited ownership) for up to 100% of total cost of thermal refurbishment measures

• the subsidy cannot be higher than 2-years heating cost savings
• the precondition is to achieve energy savings through measures

to be financed, at least 25% confirmed by the energy audit,

• in the case of renovation of buildings constructed before 1961 the

subsidy accounts to 15% of total renovation cost, by minimum of 10% of energy savings, confirmed by renovation audit, renovation measures of common sapces are also eligible

Adjustment and improvement of the scheme

• justification

Act of 2008

Special attention to old buildings owned mostly by condominiums, which are in bad technical condition Facilitation of financing through elimination of own equity requirement, Thermal refurbishment will be implemented in 6 million m2 of residential multifamily buildings Renovation of buildings will be implemented during 2008-2012 respective in:150, 300, 900, 1400 i 1900 buildings Filling in the renovation gap estimated to 42 billion PLZ (approx. 10 billion€) and thermal refurbishment gap estimated to approx. 43 bilion PLZ (approx. 10,2 bilion€) The subsidy will be neutral for the budget in short term perspective, because of tax recovery

Historical overview-budgetary spendings versus demand on subsidy

Source of data: Bank Gospodarstwa Krajowego

Budget spendings and other indicators 1999-2014

Item Figures Number of buildings subsidized 32 473 Subsidies awarded value (total) 1,774 billion PLN (0,442 billion €) Total investment value 11,124 billion PLN (2,649 billion €) Subsidy per building 54 630 PLN (13 000€) Total investment value per building 342 562 PLN (81 562€) Yearly heat cost savings generated thanks subsidies 0,796 billion PLN (0,199 billion €)

Source of data: Bank Gospodarstwa Krajowego, own calculations

Budget spendings and other indicators 1999-2014

Item Figures Average interest rate of loans (2014) 5,26% Market coverage in % of buildings 8% (yearly 0,5-0,8%) Share of thermal refurbishment subsidies (2014) Share of renovation subsidies 73% 27% Share of subsidies for HOAs 55% Share of subsidies for co-

• peratives

35% Share of subsidies for others 10% Cost of energy use reduction (2015) 100 PLN/GJ (25€/GJ)

Source of data: Bank Gospodarstwa Krajowego, own calculations

Key success factors

raising heat prices increase of creditworthiness of people and building`s owners (in large cities) mobilization of professionals (energy auditors, facility managers, banks) low interference by politics strong promotion by all stakeholders, including producers of materials and equipment

Tenants cost neutral energy efficient refurbishment of a building

Source of data: own calculations based on data provided by the SM Marysin Wawerski in Warsaw

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Rental housing refurbishment – current trends

The private owners of buildings are eligible to use the support scheme, but they don`t use it frequently – lack of good cases There is one crowd-funding initiative aimed to invest in rental dwellings, renovate them and rent commercially – 350 dwellings so far 2012 was founded association of rental real estate owners „Mieszkanicznik” („Dwellinger”), which has over 1200 members and acts to civilize the rental market in order to make it more transparent, fair and to take care on technical conditions of the rented stock

the association is involved into RentalCal steering commitee and declared to participate in testing and dissemniation of the RentalCal tool among it`s members the energy efficiency issue will be presented November 2016 by NAPE team to the participants of yearly congress of the „Dwellinger” there are further discussions how to promote the RentalCal results in this milieu