**2. Basic types of housing policy**

Housing policy of the EU countries has a lot in common. A closer view on the housing market and housing policy shows each country having its form, which has been developing for long decades under the influence of local economic, political and geographical conditions, demographic development, process of urbanisation and predominantly under the influence of local traditions and approaches.

The difference between housing policies of particular countries is in many cases specific with the overall distinct acting of a state in the housing market. Such a predominantly "geographic border" dividing different housing systems goes between the north and south of Europe. The Northern EU member states (Denmark, Germany) are characterised by a long tradition of complex, actively intervening housing policy. On the other hand, there are the southern states (Portugal, Greece), whose housing policy from the view of the degree of state intervention into housing is more likely less developed.

Until 1989, housing policy in the Slovak Republic was centralised. Moreover, the state provided housing for all citizens. The state provided building construction centrally, variedly subsidised all forms of housing (mainly subsidising the price of services related to housing, as prices of energies and water), ran housing stock, especially state and cooperative flats, and centralised the administrative system of the redistribution of flats. Therefore, political changes in the Slovak Republic after 1989 required several fundamental changes in the field of institutional arrangement of the public administration, as well as legislative changes. Similarly, as in other fields of economics, also in the sphere of housing, transformation from the rationing system of housing to the system based on the respected market economy was initiated.

In 1993 the independent Slovak Republic was established, and therefore other inevitable changes occurred in the field of housing and housing policy. One of the important decisions was the division of tasks in the frame of housing policy to three levels (central, regional and local). The state stayed a valuable player, who, however, stopped being involved in housing construction but took over the task of a creator of frame documents, via which the state tried to define basic principles and rules, in which the housing policy of Slovakia further moved. A significant impact of the development of housing in the years 1992–2006 was done by a process of massive and inappropriate privatisation of the housing stock, which caused a subsequent decrease in rental flats in Slovakia. Overall, between the years 1992 and 2006 according to OECD in Slovakia, approximately 340ths of council flats and 270ths of coopera-

Decentralisation was another distinct impact, the part of which was also the transfer of competence in the field of housing, territorial planning and local development to the lower management level in the years 2000–2003. It resulted from the assumption that towns and villages will manage to reflect the needs on the local level better. A key player stayed a citizen, who should do his best to provide housing for himself and his family. Quickly this imagination was shown as illusory especially from the view of possibilities and the ability of citizens and especially of specific groups to provide housing exclusively with their own contribution.

According to first conceptions, the role of the state in the field of housing should have been limited just to the creation of conditions for origination of the real estate market. In regard to vigorous withdrawal of the state from financial participation in new housing construction at the beginning of the 1990s (the period of transformation process), the creation of conditions for the implementation of standard tools in the financial market was necessary to help households gain financial sources for the construction or purchase of a house/flat. It is mainly the implementation of the benefit for housing, building society accounts (1992) and mortgages (1999).

Housing policy of the EU countries has a lot in common. A closer view on the housing market and housing policy shows each country having its form, which has been developing for long decades under the influence of local economic, political and geographical conditions, demographic development, process of urbanisation and predominantly under the influence of local

tive flats were privatised.

22 Housing

**2. Basic types of housing policy**

traditions and approaches.

A significant criterion, from which other "borders" develop, is the range of state intervention in the housing market, i.e., the complexity of housing policy. In this spirit we can define two basic types of housing policies:

*The first* of them is labelled as additional and is characterised by an intense relying on the market mechanism, while the state effort is oriented mainly on personalised help for low income and other endangered group of inhabitants; the example of such a country following this type of housing policy is mainly Great Britain.

*The second* is labelled as complex and is characterised by quite extensive state interventions in the housing market, which is oriented, more or less, to all layers of the society. Housing policy of this type prevails in the EU member states; mainly the approach of Germany, France, Netherlands and northern states represents it [1].

In a more detailed way, the type of social policy in the broadest sense of the word, i.e., the type of welfare state differentiates the European housing policy [2].

Nowadays, the already classical typology of regimens of the welfare state allows us to derive four basic theoretical types of the European housing policy, the carriers of which, in the practice, are the EU countries [3].

*The first type* of housing policy is derived from the social-democratic welfare state, which does not understand a human being just as a workforce and is based on the utilization of the citizen principle at providing social services. From the view of housing policy, it is a regimen, which supports the same access of all citizens to housing. The state actively intervenes in the housing market and supports mainly rental and cooperative housing. From the economic view, it is the ineffective model and in the long term not sustainable. Representatives of this approach are mainly the northern states.

*The second type* of housing policy is derived from so-called corporatist or work and performance-related model of a social state, whose social policy derives mainly from the work activity of an individual in the labour market and emphasizes on the traditional social differentiation of the society. For housing policy of this type of a welfare state, there is a typical and significant reliance on the market mechanism; the state intervention into the housing market is also quite active and focused on all forms of housing in the housing market. Germany, Austria, France and the Netherlands represent a housing policy of this type. *The mentioned model might be considered as the closest model of housing policy in the Slovak Republic*.

*The third type* of housing policy is derived from the liberal state of public and social services, whose main characteristic feature is the emphasis on the activity of an individual and state interest to provide the help just for those who need it and cannot solve their difficult situation themselves. In the field of housing, the state help is oriented just to low-income and handicapped groups. Financing of housing is through private sources, and public ones are provided partially. In the EU the examples are mainly England and Ireland.

to counterbalance the lack of savings generally needed for house purchases. A different situation is observed after 2010, when a combination of stable development on property market and the modest growth of disposable income, accompanied by falling interest rates, led to

Housing Policy in the Slovak Republic http://dx.doi.org/10.5772/intechopen.78611 25

The present condition of housing in Slovakia is the result of complicated historical development. Before 1989 the whole system of housing construction development unwound from the system of planned management of the national economy, which meant the state share in complex housing construction is almost in the whole range. After the year 1990, the responsibility

In the Slovak Republic, the system of tools for the support of housing was realized in the form

• subsidy for the procurement of rental flats, technical facilities and removal of systemic defects in blocks of flats in the Act No 443/2010 Coll. on subsidies for the development

• the contribution for housing (the Ministry of Labour, Social Affairs and Renewal of

• premium loans for procurement of rental housing and renewal of the housing stock

• subsidies for procurement of alternative rental flats, technical facilities and building plot (the Ministry of Transport and Construction of the Slovak Republic, hereinafter MDaV SR).

• bank guarantee for the renewal of blocks of flats for the loan provided by the state hous-

• state subsidy for young, the height of which is determined by the state each year in the Act on the state budget—the Ministry of Finance of the Slovak Republic (hereinafter MF SR), • state premium to building savings, the height of which is determined by MF SR; the process of determination of percentage height of the state premium is automated and unwinds from the formula, which is defined in the Act on Building Savings (**Figure 1**).

It might be said that the state created a particular (some) system of supportive tools for the development of housing differentiated according to the income structure of households.

constant improvements in the affordability of housing [5].

of direct or indirect support.

**1.** The direct state support:

(SFRB),

**2.** Indirect state support:

**4. Institutions and economic tools to support housing**

for the financing of housing moved from the state to citizens in Slovakia.

of housing and the Act No. 134/2013 Coll. (MDaV SR) as amended,

• the contribution for insulation of a family house (MDaV SR),

Housing Stock, hereinafter MPSVaR SR),

ing development fund (hereinafter SFRB),

*The fourth*, the theoretically determined type of housing policy, is derived from the so-called rudimentary welfare state, whose social policy in the broadest sense of the word is not developed, so the state provides for citizens just a rescue social net. This approach is usually also related to the conception of housing policy, which means that any care for housing is left on a citizen and the state is involved minimally. The examples of this approach are more likely agrarian countries, such as Portugal or Greece.
