The discussion about the rent gap in Poland has been gaining momentum for quite some time, very often fueled by information about micro-valley prices or queues stretching for miles to participate in "apartment for renovation" programs. What has influenced the widening of the rent gap?
As part of our #ReportThursday series, we present documents, reports and guides on architecture, cities and local government that are certainly worth publicizing and promoting. This week we look at the report "Rent Gap in Poland in 2010-2022. Description of the preliminary results of the study," which was compiled by Adam Czerniak and Jan Kroszka. The publisher of the document is Polityka Insight.
The report is available on the website of the think tank Polityka Insight.
The report "Rent gap in Poland in 2010-2022. Description of preliminary results of the survey," which was developed by Adam Czerniak and Jan Kroszka; the publisher of the document is Polityka Insight
© Polityka Insight
Who can afford an apartment today?
We define the rentgap as the percentage of households that earn too little to buy or rent an apartment for themselves at the market price, while earning too much to obtain government-subsidized housing.
How did analysts determine the rent gap? The first indicator was to determine the types of households - housing needs are different, for different family sizes. In addition, other factors were taken into account, such as the average price per square meter in Poland, the minimum disposable income for a household to take out a mortgage, or the determination of utility costs. On this basis, seven groups of households were identified. Among them were groups using uncrowded owner-occupied housing to those households unable to meet their needs without support. Defining the methodology is crucial if we want to maintain an appropriate perception of the data. Adopting several standards and distinguishing between them should be the basis for assessing the rent gap.
Among the factors defining the rent gap were issues of property price
© Policy Insight
how did the gap change?
Analysts noted two trends in the rent gap. The first was its decline between 2010 and 2019 from 44% to 35%. This was due to demographic processes and wage growth.
The second period adopted in the report was an increase in 2020-2022. Then the rent gap, according to analysts, did not change, but there were significant changes in its structure. Those most in need, defined in the report as groups B-D, saw no change. The situation was different in the household groups defined as A-C - here, proposed subsidy programs including a 2% loan led some people who previously could not take out a loan to the possibility of taking one.
An important element of the survey was the definition of household groups
© Policy Insight
The situation studied by the analysts covers the years 2010-2022, so it refers to historical data. This is an invaluable source for assessing the effectiveness and impact of housing programs in recent years.
directions of change
The report not only summarizes changes in the rent gap in recent years, but also points to solutions that can help confront the problems of the gap. Among the proposals are arguments for creating housing policies over a minimum of a decade and a half, increasing the supply of housing in local governments, making full use of the potential of social housing, or moving away from general solutions such as loan subsidies in favor of precisely targeted household support programs. Among the solutions is also the strengthening of private institutions involving the development of the PRS, or institutionalized private rental market, and REITs, or real estate investment funds.
The problem of the rent gap cannot be solved by applying a single magic panacea. Fighting it requires multiple tools and resources from different institutions. Closer time data on the rent gap based on research by the Warsaw School of Economics was cited by Magdalena Milert in her article Rent Gap in Poland, or Queue for M.
The report is available on the website of the think tank Polityka Insight.
