HOUSING AFFORDABILITY IN CITIES IN THE CZECH REPUBLIC.

Preface
Foreword
Acknowledgements
Abbreviations and acronyms
Executive summary
	Key findings
	Key policy recommendations
Assessment and recommendations
	Introduction
	Key findings
		Following the post-1989 massive privatisation of the housing stock, including at the municipal level, homeownership is the main type of housing tenure in the Czech Republic
		Many Czech households are struggling to access affordable housing, especially in cities
			House prices have increased faster than household disposable income
			House prices have risen faster in cities than in the rest of the Czech Republic
			The private rental market offers few housing alternatives due to increases in rental prices
			Living in cities imposes a heavy financial burden on Czech households
		Drivers pushing housing demand up in Czech cities are likely to withstand the COVID-19 crisis
			Many factors have been driving the demand for housing in cities
			Housing demand has been increasing faster in urban peripheries than in urban centres
		Czech cities face a shortage of housing supply
			Construction activity has not caught up with previously high levels from before the 2009 financial crisis
			Construction activity does not happen where it is most needed, while zoning and land use planning do not steer development towards urban areas where housing demand is high
			Private sector housing supply faces several constraints
		The housing stock in Czech cities is often old and needs energy efficiency improvements
		Barriers to the housing market leave some social groups in substandard housing
		Social housing provision does not meet the needs of all low-income and vulnerable households
			The social housing stock in the Czech Republic is too small to meet the demand of all low-income and vulnerable households
			Allocation of social housing varies across municipalities
			Municipalities face obstacles in the development of social housing
		The Housing Policy Strategy provides a dedicated national framework for housing affordability policy in the Czech Republic
		However, its implementation faces legal, institutional and financial challenges
		Direct policy instruments to support housing affordability exist but have limitations
		Municipalities tend to lack a housing policy framework and intermunicipal co-ordination on housing policy remains limited
	Key policy recommendations
		Steer housing development toward urban areas where demand for housing is high
			Provide clear national and regional guidance to local planning policies
			Use local land use planning instruments to encourage private sector construction of affordable housing
			Ensure compact, transport-oriented development to reduce auxiliary costs of housing in cities
			Manage publicly owned land strategically to provide affordable housing where possible
			Monitor the effectiveness of the national reform of the building permit process
		Provide more alternatives to homeownership
			Encourage municipalities to scale up rental housing in their planning policies
			Reform housing co-operatives and engage non-governmental actors to reach housing affordability objectives
		Reinforce the supply of social housing
			Increase public investment in social housing
			Introduce a national social housing legislative framework that guides municipal housing
			Remove barriers to access to social housing
		Ensure the most vulnerable households have access to adequate housing
			Simplify the application process for housing allowances and subsidies, and ensure it remains accessible to those who need them the most
			Strengthen the regulation of dormitories to better protect residents
		Adopt a metropolitan-area approach to housing (including social housing), transport and spatial planning
		Leverage fiscal and financial instruments more effectively to support housing affordability
	Action plan
	References
	Notes
1  Overview of housing affordability in cities in the Czech Republic
	Introduction
	Defining housing affordability
	The Czech housing market has a historically owner-dominated structure
	Many Czech households are struggling to access affordable housing, especially in cities
		House prices in the Czech Republic have increased faster than incomes
		House prices are particularly high in Czech cities, aggravating the housing affordability crisis for urban residents
		Rent prices have increased steadily but at a slower pace than house purchase prices
	Drivers pushing housing demand up in Czech cities are likely to withstand the COVID-19 crisis
		Housing demand in the Czech Republic has been fuelled by various economic, financial and demographic factors
			Strong economic growth and rising real wages until 2020.
			Favourable lending conditions, with low mortgage rates and high availability of credit.
			Changes in household composition and population ageing.
		However, some factors of housing demand are specific to cities
		An increasing share of the urban population lives outside urban centres, creating other social and environmental challenges
	Czech cities face a shortage of housing supply
		Started and completed dwellings have not caught up with their previously high levels
		Construction activity does not happen where it is most needed
		Private sector housing supply faces several constraints
	Living in cities imposes a heavy financial burden on Czech households
		Housing-related expenditures put a substantial burden on Czech households
		Housing cost overburden rates are higher in cities
	The housing stock in Czech cities is often old and in need of energy efficiency improvements
		The housing stock in Czech cities is often overcrowded and in need of renovation
		Housing in the Czech Republic is one of the least energy efficient among OECD countries
		Barriers to the housing market leave some social groups in substandard housing
	Conclusion
	References
	Note
2 Policies for housing affordability in cities in the Czech Republic
	Introduction
	National and local governments in the Czech Republic can influence housing affordability in cities through a range of direct policy instruments
		The Housing Strategy provides a dedicated national framework for housing affordability policy in the Czech Republic
		Housing allowances provide important support to many Czech urban households but are not fully taken up
		While several policy instruments aim at facilitating access to homeownership in cities, their potential downside needs to be taken into account
		The social housing segment varies across municipalities but generally remains small and underregulated
			The social housing stock in the Czech Republic is too small to meet the demand of all low-income and vulnerable households
			Allocation of social housing varies across municipalities
			Municipalities face obstacles in the development of social housing
			More public investment in social housing is needed in cities
		The private rental sector could be further strengthened to provide more affordable options, especially to low- and middle-income households in cities
			Housing co-operatives could be retooled and non-governmental actors activated to strengthen housing affordability objectives
		Urban households that cannot access the private rental market currently rely on substandard housing and need targeted support
	Indirect instruments could better support housing affordability objectives in cities
		Spatial and land use planning systems are not directly aligned with housing affordability objectives
		Better aligning housing policy with transport, energy and other policies could improve housing affordability in Czech cities
		Joint planning of housing across municipal boundaries could be strengthened
	Conclusion
	References
	Notes
		Annex A.  The OECD-MMR housing survey of municipalities in the Czech Republic
		Overview
		Administration of the survey
		Survey data
		Note
Annex A. The OECD-MMR housing survey of municipalities in the Czech Republic