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August 10, 2022



Prague City Council disagrees with Czech bill to consolidate two housing benefits into one

9.7.2019 6:51
Czech Labor and Social Affairs Minister Jana Maláčová is interviewed by ROMEA TV during a working session of the Chamber of Deputies' Health and Social Committee that was held at the infamously excluded Chanov housing estate (2019). (PHOTO:  ROMEA)
Czech Labor and Social Affairs Minister Jana Maláčová is interviewed by ROMEA TV during a working session of the Chamber of Deputies' Health and Social Committee that was held at the infamously excluded Chanov housing estate (2019). (PHOTO: ROMEA)

Prague City Council is disturbed by the latest bill about housing benefits to have been produced by the Czech Labor and Social Affairs Ministry. The bill would abolish existing support through the "housing contribution" and "housing subsidy" and replace those options with a single new benefit.

The disbursal of housing benefits to people in material distress who live in residential hotels is meant to be abolished without any replacement, while the disbursal of housing benefits to households in rental apartments is to be significantly limited. From the perspective of Prague City Council members, the "housing contribution" is the main pillar of state policy supporting affordable housing.

The growing cost of housing rent especially impacts low-income households, specifically seniors living alone and single parents. For that reason, from their perspective, it is necessary to valorize the higher normative costs of housing to actually correspond to the price of rents today.

The current bill does not, however, assume that is the case. "At this moment, when the capital city of Prague must substitute for the Government's role in a significant way in the area of the schools and pay CZK 1 billion [EUR 40 million] to top up the undervalued salaries of teachers, I cannot imagine that we, as a self-governing entity, would be able to allocate financing in order to make up for what is supposed to be the state's role in the social area as well. I perceive it essentially to be misconduct by the current Government of the Czech Republic that the most vulnerable groups in the population - disabled people, senior citizens and single mothers - are having their basic living needs made insecure by limiting the disbursal of welfare benefits in the area of housing," says Mayor of Prague Zdeněk Hřib.

The bill also does not assume that the capacities of the Labor Office would be increased to cope with the change, so staffers who will be overwhelmed by the new agenda of welfare cuts for all recipients of the existing "housing contribution" will have no choice but to tangibly delay the disbursal of all benefits. As a consequence of those delays, people will fall behind on their rent, which in many cases could lead to their losing their housing.

That situation already happened once during the so-called Drábek reforms, when welfare disbursal was significantly delayed by the changes to the state's database systems. The capital city would then have to address a crisis, instead of such persons being able to remain in their rental housing.

This year the capital will be subsidizing social work in the area of support for housing by adding a total of 25 new full-time positions. Prague recently adjusted the way it chooses those living in city-owned rental housing in order to focus on those who are actually needy, and the vast majority of such renters are in need of both kinds of housing benefit.

The "housing subsidy" serves to cover the costs of housing during the first three months of a rental before the "housing contribution" kicks in, as well as during different kinds of crisis situations. By abolishing the subsidy, people will lose that option, so it can be anticipated that renters could have problems with paying their rent from the very beginning of a new rental relationship with the city.

The idea that Prague and its municipal departments, during a three-year transition period, would be able to resolve the housing situations for all currently receiving "housing subsidies" to live in residential hotels in the capital is unrealistic. Currently there are roughly 100 such facilities on the territory of the capital, and the city is primarily concentrating on addressing the situations of families with children and senior citizens living in such places.

Hundreds more households are finding themselves on the brink of homelessness annually, though, and Prague does not own enough apartment units to be able to resolve their situations during just three years - nor does the current rental apartment market in the capital have that kind of capacity. In addition, members of the coalition now governing the Prague City Assembly are seriously concerned that the change could launch a migration wave that would have a very negative impact on the capital, similar to what happened when the residential hotels in the town of Kladno were all abolished.

Representatives of the city governments of both Ostrava and Prague have repeatedly called on the ministry to include them in the round tables about housing benefits that have been attended by representatives of other cities. However, they have repeatedly been told that there was no room for them to attend, even in cases where it could be demonstrated that some of the invited attendees had declined the invitation.

What is mainly paradoxical about that situation is the fact that the planned changes would impact the residents of Ostrava and Prague above all. Ostrava is home to the highest number of "housing subsidy" recipients in the country, while Prague has the most recipients of the "housing contribution".

While the ministry has assured the Prague city leadership that its changes will be based on careful analyses and will not have negative impacts on the most vulnerable groups in the capital, such as families with children and senior citizens, it has now fully drafted the wording of a law that contradicts those proclamations. "We disagree with such important adjustments to the welfare system, changes that will have a direct impact on tens of thousands of our residents, on safety in the city, and on the regional network of health care facilities and social services, not being discussed with us. We disagree with the existing bill on housing benefits and we are demanding it be withdrawn from consideration. We are also asking that the Government begin to fulfill its program declaration and design a bill on social housing. It will not be possible to abolish the existing financial supports for the cost of housing in substandard facilities until a functional law on social housing has been adopted," says Adam Zábranský, the Prague City Council member who is in charge of the housing and transparency agenda.

The adoption of the current bill would do the most harm to the most impoverished layer of the population. "The bill on housing benefits is bad because it takes the only instrument that now exists for addressing the root causes of homelessness away from municipalities, one that is aiding them with keeping the most impoverished strata of the population in rental housing. It is expensive and ineffective to provide social services to people who are already living on the street, because such services can only ameliorate the consequences of homelessness. Children would by far suffer the very worst impacts if the proposed bill were to become law. They would most probably end up in expensive institutional care, which can never be considered the equivalent of being raised in a family," says Milena Johnová, the Prague City Council member in charge of health care and social policy.

fk, translated by Gwendolyn Albert
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