Vojtěch Lavička: Czech municipalities fouling their own nests by cancelling housing benefits

Almost 20 municipalities in the Czech Republic have decided to cancel the disbursal of welfare benefits issued to tenants living in problematic localities for their housing. This step - which to me is a stupid one, to put it mildly - has been facilitated by an amendment to the law on aid to those in material distress.

The amendment took effect at the beginning of July. It allows housing benefits to be taken away from tenants living in specific neighborhoods or streets.

The first municipality to take advantage of it was the North Bohemian town of Jirkov, and some other examples are Bílina, Děčín, Duchcov, Karviná, Kladno and Most. The decree does not apply retroactively, so it only affects new applicants for support for their tenancy in the municipality.

Of course, that is no comfort, as the vast majority of tenants in socially excluded localities have rental contracts for one year at the longest, so the new conditions will eventually apply to them. The state, therefore, has created yet another step through which the housing situation can deteriorate.

The municipalities first sold off their own housing stocks to real estate speculators, losing an opportunity to undertake effective community work with "problematic" residents by leveraging their access to housing. The national housing fund that is meant to be part of the so-called social housing that various national administrations have promised to build here practically does not exist.

Apparently it has not been possible to build up the necessary political capital needed to support this issue. All of this plays into the hands of the owners of residential hotels and real estate speculators who lease 20-meter-square "boxes" for usurious rents.

Any low-income family has just one chance to pay the rent - applying for state housing benefits. Now these people have lost that option.

What will happen next? According to Martin Šimáček, the former head of the Czech Government Agency for Social Inclusion, the situation will deteriorate:  "The housing benefit frequently covers almost all of these tenants' rents."

"Traffickers in poverty, therefore, will look for other sources of money. They will just adjust the conditions under which people reside in their properties," Šimáček predicts.

"For example, they will ask people to work off their rents for them under the table, or to pay them in a different way, to cover the rent from their other welfare benefits," he believes. I personally doubt that these families will manage to cover their rent from other benefits, though.

Rather, their motivation to address their situation in an illegal way will grow, and crime may rapidly increase locally. There is nothing surprising about this, anybody pushed into a corner will frequently behave in an extreme way.

For that reason, I consider this step short-sighted. The boomerang that these local authorities have just launched will come back to them in the form of a higher crime rate, including the involvement of organized crime.

If local authorities believe they can just get rid of their "inconvenient" residents, or choke off the big profits made by real estate speculators, they are mistaken. Only time will tell how big of a mistake this will prove to be.