The government proposes to halt most of the housing development fund programs

Prague - The government plans to halt most of the existing programs of the State Housing Development Fund next year. Out of 11 different programs, it intends to suspend eight and introduce one new one. This follows the government's commentary on the proposed fund budget for 2008, which was approved by the parliament on Wednesday.
    Among the programs to be canceled are, for example, subsidies to municipalities for the construction of rental apartments for people with specified incomes, support for cooperative construction, assistance for repairing properties damaged by floods, or two out of three types of loans for young people for repairs and modernization of housing. A new guarantee for loan repayments that municipalities or private investors take out for the construction of rental apartments is being introduced.
    The fund's income is expected to be 1.25 billion crowns, with total expenditures of 3.2 billion. Of this, 1.5 billion is earmarked for a program to repair panel apartments. Approximately the same amount will go towards loans for young people for construction or acquisition of housing; the government intends to subsidize this purpose with about 50 million crowns.
    This year, the budget for the key program Panel, after the increase approved by the parliament in November, is to reach 4.3 billion crowns. The commentary on the budget deems the current level of assets as minimal. "Lower amounts would not be able to ensure the necessary effect of the chosen function of the fund," states the commentary.
    The fund's income relies solely on revenues from its own equity; it will thus have to do without funds from the state budget. Until 2005, the main source of funding for the fund was the transfer of resources from the National Property Fund.
    The continued provision of non-repayable grants will, according to the government commentary, lead to a significant reduction in the fund's financial resources in the coming years. "As a result, the fund will no longer be able to continue realizing any of the grant programs," describes the situation in the commentary. State housing policy, according to the commentary, tends to favor reimbursable forms of support.
    "I am certainly very dissatisfied with the budget for next year, as it will restrict a number of very useful programs, especially the Panel program, which would actually need much more money to support the renovation of panel apartments," said Deputy Minister for Regional Development Petr Pávek to ČTK. The ministry originally requested up to double the amount that the fund received for these purposes for the repair of panel apartments. "The cutback of this program is very unfortunate from my perspective," he added.
    The approved budget proposal is similarly perceived by the chairman of the Union of Czech and Moravian Housing Cooperatives, Vít Vaníček. "We are definitely disappointed because the total amount of 3.2 billion, and out of that 1.5 billion for the Panel program, is absolutely insufficient," he told ČTK. The amount designated for repairs of panel apartments will, according to Vaníček, be enough only for the first quarter of next year. "It's a pity that the parliament, in dividing the pie, preferred memorials in municipalities and towns over an issue that affects one-third of the inhabitants of this country," he stated.
    Vaníček also sees the planned reduction in state support for the Panel program as a problem, which he claims the Ministry for Regional Development is preparing together with the fund. This is expected to drop from four to 2.5 percent. The proposal to reduce state support by 2.5 percentage points is also included in the government's commentary on the fund's budget. The fund's director Jan Wagner confirmed the information about the planned reduction in state assistance but declined to discuss specific figures, stating that nothing has yet been decided.
    In 2005, approximately 9,000 apartments were repaired under the Panel program, while last year it was about 45,000 apartments. This year, it is estimated that up to 120,000 apartments will be undergoing reconstruction in housing estates.
    The cancellation or limitation of some programs is also criticized by the shadow minister for regional development from the ČSSD, Radko Martínek. "Subsidies for young people under 30 for apartment renovations are being eliminated, support for cooperative construction is being dismantled, and a whole series of other projects is being shut down," Martínek told ČTK. According to him, the budget for the repair of panel apartments should at least be increased, subsidies for the construction of apartments for socially needy people should be maintained, and loans for young people for repairs and modernization of housing should be extended.
    On Wednesday, the deputies did not accept an amendment from social democrat Jan Babora, who proposed reallocating 50 million crowns within the fund's budget to support the construction of cooperative apartments. The proposal from shadow minister Martínek, who wanted to provide one billion crowns for the construction of rental apartments for people with specified incomes, also failed.