Govt Expects Up to 10,000 New Public Rental Flats Over Next 10 Yrs, Proposes New Service to Help Owners Rent Out Properties

By , 11 Jan 2021, 17:27 PM Politics
Govt Expects Up to 10,000 New Public Rental Flats Over Next 10 Yrs, Proposes New Service to Help Owners Rent Out Properties CC-by-0

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STA, 11 January 2020 - The government expects that up to 10,000 new public rental apartments could be available within five to ten years under recently adopted housing act changes. "The key objective of housing policy is to secure more public rental flats," Environment Minister Andrej Vizjak told the press on Monday.

The amendments to the housing act, adopted by the government last week and submitted to parliament, allow the national housing fund and municipal housing funds to borrow more.

Vizjak expects the new rules would mean an extra EUR 200 million in fresh borrowing, with an additional EUR 100 million coming from the EU's recovery and resilience fund.

According to him, this will be quite a handful for the housing funds, and anyway "we don't want to exaggerate, we want sustainable growth".

While the extra borrowing will lead to new housing developments, a second major provision of the new act would establish a public service acting as an intermediary and manager of rental homes.

Vizjak said this public service would manage rental flats on behalf of owners who are currently reluctant to rent out their properties due to risks.

In this scheme, tenants would pay non-profit rent, while some of the gap to commercial rent would be covered by the state.

"We estimate 20% of flats are unoccupied in Slovenia. In Ljubljana alone it is estimated there are 25,000," Vizjak said.

The government expects about 100 apartments would enter this scheme in 2022, rising to 500 the year after and up to 2,000 per year beyond 2025.

Arguably the key measure of the bill is the gradual increase in non-profit rent over three years from EUR 2.63 to EUR 3.50 [ed. per m2?] in a system of points assigned to a property.

Non-profit rent has remained unchanged since 2007 and no longer allowed housing funds to earn a return on their assets that they would then reinvest into new housing.

To offset any negative impact on those with the lowest incomes, state subsidies will increase.

"This means the measure does not undermine the socio-economic status of the weakest while allowing housing funds ... to continue building non-profit flats."

Vizjak said these were the most urgent changes to housing legislation, while the government will embark on a comprehensive overhaul of housing legislation within a year.

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