Friday, December 6, 2024

Emerging Community Rental Agencies in Poland: A New Approach to Addressing Housing and Depopulation Challenges

REAL ESTATEEmerging Community Rental Agencies in Poland: A New Approach to Addressing Housing and Depopulation Challenges

In Poland, several community rental agencies have already formed and are starting operations, with another dozen or so in the process of being established. Although this is a modest number for almost 2,500 municipalities in the country, experts see great potential in this solution. They emphasize that it could especially be an opportunity for medium-sized cities to combat the phenomenon of depopulation. Community rental agencies, in collaboration with municipalities, mediate the rental of apartments – either municipal or owned by private individuals – to individuals whose earnings do not allow for market rent, but also do not qualify them for social housing.

The first community rental agencies began to form in 2023, although the relevant regulations were passed in 2021. The development of such institutions was halted by the outbreak of full-scale war in Ukraine, which forced municipalities to focus on other tasks. According to the Habitat for Humanity Poland Foundation, which is involved in creating and advising municipalities on establishing such agencies, there are currently 11 in Poland, with several more in the process of formation.

“Community rental agencies are just beginning to be established. If we were to talk about potential, it is still a matter of the next few months to see how many municipalities and how community rental agencies operate. This is a very specialized solution that helps include private apartment owners in the social circuit, i.e., organized and cheaper than the commercial market rent,” says Dr. Alina MuzioÅ‚-WÄ™cÅ‚awowicz, a specialist in housing policy, to the Newseria Biznes news agency.

A community rental agency is an entity created by the municipality that leases apartments from owners and rents them to people in difficult life or financial situations. By providing owners with guarantees of timely rent payment, stable use, and maintenance of apartments in good technical condition, it can acquire premises below market rates.

“We also think that the private housing stock is not sufficiently utilized because many people who have apartments for rent, fearing various events, simply decide not to rent them out, as there is very little trust between private landlords and potential tenants,” says Karolina WiÄ™ckiewicz, an advocacy specialist, Habitat for Humanity Poland.

A Community Rental Agency (CRA) can operate as a limited liability company, joint-stock company, foundation, association, or social cooperative. The municipality, tenant, and landlord sign contracts with the community rental agency, with the municipality tasked with identifying target group individuals for the project and providing rent subsidies. Landlords, in turn, sign a lease agreement. Although they can count on a rate lower than the market rate, they gain the certainty of rent payment, tenant selection, support during renovations, and exemption from income tax on lease revenues. Tenants, on the other hand, gain access to affordable housing, a wide range of activation services, and the possibility of obtaining rent subsidies.

“We use social rental very poorly in Poland because we are still in the paradigm of home ownership, and social housing investors are not able to compete in local markets, let alone the national market, with developer offers. However, we have quite good legislation and institutions that could implement social rental housing. I mean social housing construction companies, social housing initiatives, housing cooperatives, and municipalities or their municipal companies,” explains Alina MuzioÅ‚-WÄ™cÅ‚awowicz.

“Municipalities are aware of this solution, but not all of them. Most often, they are interested in their main task, namely providing housing for people in the most difficult situations, while community rental agencies are rather dedicated to groups that we can define as the so-called rent gap and other people who do not qualify for public assistance but also find it difficult to cope in the commercial rental or housing purchase market,” explains Karolina WiÄ™ckiewicz. “There is a need to change thinking in such a way as to address various needs in the municipality, not only in the context of municipal or social rent.”

An opportunity to popularize CRAs is financial support, such as last year’s Mutually Needed initiative commissioned by the Chancellery of the Prime Minister. Thanks to it, eight agencies were established.

“The fact that one of the competitions from the European Social Fund, FERS, was intended for CRAs and there is allocated as much as 10 million PLN, may perhaps make these agencies be established, as the competition was not only for existing agencies but also for those municipalities that declared their creation,” says an expert from the Habitat for Humanity Poland Foundation.

Alina Muzioł-Węcławowicz points out that the housing offer could be one of the elements that help, especially medium-sized municipalities, combat the problem of depopulation. The availability of housing at relatively low costs is a factor that could encourage young people to stay in these cities. CRAs can also combine renting with other social services for tenants, such as family support, combating unemployment, or helping disabled people.

“Community rental agencies will benefit primarily people who need a roof over their heads, housing, but also active integration. We want these people to be in the community rental agency for a period of one to two years to stabilize their financial, professional, educational, and social situation, and also to receive some social potential and after this empowerment to enter the free market,” explains Anna KolasiÅ„ska, head of housing programs, Habitat for Humanity Poland, Silesia Branch. “In DÄ…browa Górnicza, we are implementing such a program commissioned by the city as part of the creation of a CRA.”

Currently, the agency has 30 apartments for rent and six families benefiting from this form of support. Research is ongoing regarding the services they need, including professional training needed in the labor market or creating local communities.

“The city believes that community rental agencies should be run in cooperation with non-governmental organizations. For residents, this is somewhat of a novelty, we invite them to consultations, tell them what we can offer, and more and more people are convinced to apply for housing through a community rental agency because they did not receive social housing,” says Anna KolasiÅ„ska.

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