Warsaw: a particular history, a particular housing situation (Sept 2020)

Warsaw, a particular history, a particular housing situation By Romain Su, foreign correspondent in Poland for French-language media https://romain.su 17 September 2020

Five historical elements are important to understand why Warsaw looks like it does, in particular in terms of housing:

  • First, the city centre was entirely destroyed in 1944 after the failure of the uprising against German occupants.

  • Second, on top of the nation-wide nationalisation policy pursued by the communist regime after the Second World War, in the specific case of Warsaw a special decree called "Bierut Decree" was adopted to nationalise the entire territory of Warsaw --land, not buildings-- and accelerate this way the reconstruction of the capital, since many owners were missing and waiting for their consent to rebuild this or that would have taken ages

  • Third, after the end of the communist regime, as an allergic reaction to any kind of public planning, all zoning plans in Poland were scrapped in 2003. City councils were supposed to draft new plans after that, but still today only one third of Poland's territory is covered by zoning plans. Even in Warsaw, there are districts with no binding zoning plan, so that building permits are granted under ad-hoc special conditions called "wuzetka" that are not very stringent in terms of landscape, percentage of "biologically active areas" on plots, access to infrastructure…

  • Fourth, another reaction to communism was a frenzy to privatise everything, so alike the UK under Margaret Thatcher in the 1980s, when council housing was massively sold to tenants. Poland did the same with a very large share of "public" housing (not only owned by the state, but also by city councils, large companies, trade unions, housing cooperatives…).

  • Fifth, Poland is the only post-communist country in Central and Eastern Europe that has never adopted a general law settling all disputes over nationalisation. As a result, 30 years later, there are still thousands of cases pending in courts put forward by pre-war legal owners (more often their offspring) who lost their property as a result of nationalisation and now demand restitution, even if the property may have in the meantime been turned into a public service (school, hospital…) or sold off to other private persons who bought it in good faith, now knowing that it is the object of claims.

What does all this mean for housing in Warsaw today, and in a broader sense for many other cities in Poland?

  1. Like other post-communist countries in Europe, Poland (and Warsaw) has a very high percentage of home ownership -- above 80% according to Eurostat.

  2. As a result, the rental market is very tight and mostly addressed at students. In contrast for example to France, a very large share (if not perhaps the majority -- but we lack the hard figures to determine this) of flats or houses in the rental market are furnished, because this type of tenure is considered as temporary until tenants have enough savings and income stability to take a mortgage and buy a flat or stand-alone house.

  3. Until recently, there was actually almost no construction of dwellings for rental purposes, so most dwellings on the rental market were so-called aunts’ or grandmothers’ flats -- after the death of an elderly, their children, already adult and settled in their own flat or home, would rent the dwelling turned empty. It is only since about 10 years ago that developers started to build dwellings (mostly flats) specifically addressed at "investors" (foreign pension funds, REITs, private individuals…) for rental purposes.

  4. This has helped increase the available stock on the rental market, but since it is purely private-driven the profile of such flats is very standardized to be "marketable" (one or two rooms, overall surface usually under 50 sq. m. -- above these parameters flats would be too expensive for a majority of Poles), which also means that it is virtually impossible to find a large flat for rent if you have a large family, for example.

  5. Despite various governmental initiatives launched in the past years (Fundusz Mieszkan na Wynajem, Mieszkanie Plus…), the contribution of public authorities to the construction of new dwellings is close to zero.

  6. The existing publicly-owned housing stock is also very limited because of the privatisation policy of the 1990s, it mainly consists of so-called "social housing" reserved for the poorest households. Because rents are very small and because public authorities do not invest a lot in housing, social housing has serious maintenance problems, aggravated by the fact it tends to be old (the last housing construction boom in Poland was in the 1970s).

  7. Since there is almost no dwellings for rental at regulated prices and as not everyone can afford to rent a flat on commercial terms or to take a mortgage and buy a flat in big cities like Warsaw, a common solution is to escape to neighbouring towns and build stand-alone houses there, where land is available and cheaper. This phenomenon of urban sprawl draws out people from big cities (many of them lose inhabitants, though it is less visible in Warsaw due to the inflow of Ukrainian migrants), shrinks their tax base, and increase congestion costs. And because these neighbouring towns tend to have no zoning plans, they look very chaotic and are not always able to provide basic amenities like sewage, public transport, kindergarten and schools…

  8. For the "lucky" who managed to get ownership titles on the wave of the privatisation, the situation is not always rosy because many are indeed asset-rich, but income-poor. Since there is almost no wealth tax, homeowners are not under financial pressure to move to properties whose value is more suitable to their incomes. But it also means they cannot afford maintenance and renovation. Because there is no supply of accommodation for people with "special needs" (elderly, disabled…), the lock-in can be problematic: imagine you’re 80 and live in a flat on the 4h or 5th floor without elevator… and that is quite common.

  9. Another consequence of the lack of policy is the ghettoisation trend. While "old" districts in Warsaw (and elsewhere) are fairly mixed from a social point of view, because of the indistinctive privatisation policy (under communist times workers could be offered very nice and well-located flats where they would be neighbours with engineers or other higher-class people), the newly built, like Miasteczko Wilanow or Bialoleka, are very homogeneous: 30-50-year-old middle class parents with one or two children, no senior, student, renter or "poorer" people. The question is what they will look like in 20 years when all these people become retired at the same time...