Czech trafficking in poverty: Residential hotel owners cashing in on state welfare

Overpriced rents, poor hygienic conditions, families with children living in one small room, strange contracts, infectious diseases: This is life in the residential hotels for the impoverished in Ostrava as described by an analysis performed by the Life Together (Vzájemné soužití) association and publicized yesterday at a press conference by experts criticizing another recent analysis published by the Czech Regional Development Ministry (MMR). That MMR analysis has stated that "social residential hotels" could become one component of social housing in the Czech Republic.

The Life Together analysis is available here (in Czech):  http://www.romea.cz/dokumenty/ubytovny_Ostravsko.pdf

"What led us to to publish this material was the idea that we should compile all of our experiences with residential hotels in the city of Ostrava into one publication. We are doing so in response to the existence of these facilities, their growth, and primarily in response to their unsuitable conditions and the undignified living experienced by those in them. We also wanted to draw attention to the record expenditure of finances for housing benefits from the state budget through the Labor Office into the pockets of the owners of these places, as well as to draw attention to the trafficking in poverty that this represents. However, we are also responding to a final [MMR] report entitled ‘Task B.10/BP Social residential hotels as long-term housing for the socially vulnerable’ (Úkol B.10/BP Sociální ubytovny jako dlouhodobé bydlení pro sociálně slabé), whose authors… claim ‘social residential hotels’ could become a component of social housing as one of the degrees of a graduated housing scheme…." the Life Together analysis begins.

More residential hotels, but not for short-term accommodation

During the past five years the number of residential hotels in the Ostrava area has significantly risen. "According to the census, there were approximately 24 residential hotels in Ostrava in 2012 with a capacity of 7 192 people," the Life Together analysis states. According to the authors, the way these facilities are used has changed:  The residential hotels are not serving as short-term residences, but are housing primarily families with children on a long-term basis.

The target group or type of persons housed in these facilities has also changed. Today, families with many children are their primary tenants. According to the Life Together analysis, they often live crammed into small rooms of about 20 by 20 meters. "For example, even an eight-member family will live all together in a room just 20 meters square," the analysis reports.

"These rooms often do not have their own bathrooms. In most residential hotels, each family has neither its own bathroom nor its own kitchen. Together with the other families on that floor (as many as 10 or more), they share a single WC, which is sometimes even shared by both men and women. In some places each floor has two WCs, one for men and one for women, and in some places there are enough toilets for three families, but there are no separate toilets for small children. It is also often the case that these WCs are either in disrepair or out of order. The WC areas smell strongly and are not maintained. The occupants of a single floor also usually share a single shower. Should there be more than one shower on a floor, only one of them works and the rest usually do not," the Life Together analysis reports.

Tens of millions from the taxpayers to the residential hotel owners

The rents paid for this accommodation are simply astounding. "It is startling to see how trafficking in poverty is flourishing today. Record sums are flowing into the pockets of the residential hotel owners with the support of the state. The entrepreneurs’ profits continue to climb," the Life Together analysis reports.

For example, in one residential hotel, two adults and four children live in a room that is 18.85 m2 and pay a total of CZK 24 000 per month. Currently the owners are exploiting these opportunities and before they lease rooms to clients, they ask the clients to agree that the Labor Office will deposit their rent payment directly into the landlord’s account from the aid in material distress benefit distributed by that office. This condition is established directly in the lease.

"The person housed agrees that a portion of his or her aid in material distress benefit will be sent by the Labor Office to the account. Should the resident change the payment of this benefit so as to receive it himself or herself in full, this will be considered a gross violation of the lease contract and the resident will be immediately evicted,” the analysis cites one of the leases.

According to information published in the media, the Labor Office’s contact site in Ostrava disbursed roughly CZK 87 million in housing benefits in 2011. During 2012, a total of CZK 172 million in these benefits were disbursed there, twice as much as the year before.

"Since last year a maximum has been set for the housing costs covered by this benefit. This tightened the restrictions, but one residential hotel landlord in Ostrava is still making between CZK 15 000 and CZK 24 000 from the welfare provided to a six-member family,” explain the authors of the analysis.

According to the Life Together analysis, Labor Office staffers base their calculation of housing costs on the amounts customary for a given locality or municipality and the number of persons in the household. They do not, however, consider whether the housing is just one room or a three-room apartment. The money then flows directly to the landlord’s account and the client never even sees it.

Proposed solution: Social housing with an accompanying program

At the conclusion of the Life Together analysis, the authors propose several measures for resolving this unsustainable situation. One tool could be the provision of social housing with an accompanying social work program, followed by an opportunity to access housing run by either a municipality or a nonprofit organization.

"Employment is the best tool against social exclusion. It is a universal solution that strengthens individual responsibility and social self-realization while supportings the country’s economy. It ensures a certain social status for people and gives them greater certainty about their futures,” the Life Together analysis says.

In order to stop residential hotel landlords from sucking the state budget dry, the analysis recommends setting an upper maximum limit for housing compensation requiring landlords to follow the normative costs for housing and not to set higher rents. Residential hotels of a short-term nature serving tourists would then have the option of acquiring the status of “social residential hotels” should they meet precisely defined technical parameters. The analysis also says that audits of the residential hotels should be performed prior to their starting operations in order to prevent situations in which people are forced to move out and potentially become homeless because a facility has not been permitted for this kind of use, does not meet hygienic norms, and must therefore be closed.