Czech Govt Agency for Social Inclusion in Roma Localities: Privatization will impoverish more people

A detailed piece of research commissioned by the Czech Government Agency for Social Inclusion in Romani Localities has found that the situation of those living in 16 apartment buildings in the southern part of the Czech town of Duchcov could significantly deteriorate should the buildings be privatized. The cost of increased rents, estimated at between 1 -2 million crowns annually, might even have to be borne by the state through its welfare program to ensure those in material distress meet the minimum standard of living.

“We presented the first results of this detailed research to the town leadership last week. Today town councilors will also have the results available as background material for tomorrow’s decision on whether to privatize the buildings in southern Duchcov,” said Agency director Martin Šimáček on 22 February.

The report was commissioned in mid-January and involved interviews with almost 90 % of the 48 households that would be affected. “One-third of those living in apartments that have been sold to private owners are households below the poverty line. The planned increase in rents by the new owners will push another three to six families below the poverty line. This will result in a palpable increase in the concentration of poverty in these buildings, whereby almost half of the residents would be below the poverty line,” says Štěpán Ripka, the author of the research.

It can also be assumed that costs for the state will significantly rise as a result of the privatization. Once rents are raised, the state will have to contribute more to these households to help them achieve the minimum standard of living (CZK 845 304 annually should the rents be raised by 50 %, CZK 1 157 472 annually should the rents be raised 100 %). Increased expenditure for more families in material distress will represent other costs (CZK 288 036 annually should the rents be raised by 50 %, CZK 721 272 annually should the rents be raised 100 %).

The study also warns that the situation of children living in the privatized buildings will also deteriorate. As a result of the sale, between five and 10 new children will fall into poverty, while others will experience a tangible decline in their social situation.

The Agency has been warning since last year of the possible negative results should the apartments in southern Duchcov be sold to private owners. That sale, as well as the town’s rejection of all of the Agency’s planned proposals, was the reason the Agency stopped collaborating with the town at the end of January.

The report is available (in Czech only) at http://www.socialni-zaclenovani.cz/vyzkum-privatizace-domu-v-duchcove-privede-desitky-lidi-pod-hranici-zivotniho-minima