Even if there is money, where to build? A problem without a solution

Pressed on whether any money is earmarked for loan subsidies in next year’s budget, Minister of Development and Technology Krzysztof Paszyk assured on Tuesday on TVP Info that in the first year of operation the subsidies will cost around PLN 500 million.

Minister of Development on the budget for credit subsidies

– In the following years it will of course increase, but it is not an amount that dominates the budget allocated for housing – said the minister.

We were supposed to learn more about the subsidies that have been announced for months – and criticized by the coalition partners – yesterday, because the topic was to be discussed at Wednesday’s meeting of the Economic Committee of the Council of Ministers. Was it? Perhaps, but none of the meeting participants shared the details of this conversation with the media.

Let’s assume that money for subsidies will be found, and the program will be planned in such a way that it will not increase property prices to the same extent as its predecessor, “Safe 2% Credit”. However, this does not solve the basic problem: developers in cities have nowhere to build. Small blocks, sometimes a few – there will still be room for that. Larger estates with infrastructure – there is practically no chance for that.

There is nowhere to build in cities

Wednesday’s “Puls Biznesu” recalled that in 2023, land prices rose by over 20 percent, and data from the National Bank of Poland show that in 2023 as many as 57 percent of investors had difficulties in acquiring land for development, while a year earlier it was 34 percent. At the same time, “PB” stated that “the Civic Coalition promised to release land in the campaign preceding last year’s parliamentary elections – especially from the resources of state treasury companies and the National Property Resource.”

“However, there is no sign of KZN keeping its promises – it is doing great, and the Ministry of Funds supervising it does not intend to liquidate it. At the end of 2023, the institution established seven years ago owned 181 state treasury properties with a total area of ​​800 ha,” we read in “PB”.

What is the National Property Resource?

The National Property Resource is an institution that manages real estate owned by the State Treasury, including real estate entrusted to the National Support Centre for Agriculture and the Military Property Agency. It acts as a so-called land bank, which collects and manages State Treasury real estate. These properties are to be designated for the construction of apartments with attractive rents, in the form of lease or lease with the option of obtaining ownership. It was the land managed by it that was to determine the success of the social housing programs implemented by the previous government. It did not work out – all of them were quickly completed before the set deadline.

“Fuses” in the loan subsidy program

The main objection critics have to the subsidy program is that it will increase property prices. We know this from last year, when as a result of “throwing” subsidies onto the market, prices in the largest cities increased by a dozen or so percent over the year, and in several centers the increase exceeded 20 percent. Minister Paszyk assures us that this will not be the case this time, because the project (which we still do not know) includes “safety devices.”

– We have quarterly limits on granting aid, which means we are counteracting the kind of demand peak that previously caused an increase in housing prices – said the minister. – There will definitely not be entire annual tranches, it will be limited, for example, to quarterly limits on applications that will be considered, so then we will stabilize and spread the amount of money that will reach the market over time to prevent a demand peak – he noted.