Social and Municipal Construction: a chance to improve the housing situation of Poles

The main assumption of the BSK (social and municipal housing) program implemented by the Ministry of Development and Technology is to support local governments in the creation and modernization of residential premises intended for rent with a standard that does not differ from the market standard, whose relatively low rent guarantees that there will be no excessive burden on the household budgets of their tenants. . The tenants of the apartments created thanks to the program are people whose financial status or personal situation does not allow them to meet their housing needs on their own.

The beneficiaries of the program are primarily municipalities that have a statutory obligation to provide housing to their residents. They can obtain non-repayable grants for the creation of their own premises and emergency housing (shelters for the homeless, night shelters, heating rooms, temporary rooms), but also grants for the creation of premises by private investors (e.g. SIM/TBS, housing cooperatives). As part of such cooperation, municipalities use residential premises and thus meet the housing needs of their residents.

The scope of projects under which municipalities receive grants for the acquisition of residential premises is very wide and covers projects from construction to renovation (including renovation of vacant buildings), change of use, purchase of premises and their purchase combined with renovation. It is also possible to support municipalities in purchasing the so-called former company apartments.

A record pool of grants

The current amount of funding under the program, which has been operating since 2007, amounted to PLN 4.5 billion, which allowed for the commissioning of nearly 44,000. apartments. In recent years, the project has gained particular momentum – in 2021, the government decided to increase co-financing from the Subsidy Fund from the current 25 to up to 80 percent. investment costs. Moreover, it is also possible to receive an additional 20%. during construction or modernization, e.g. due to an increase in the prices of construction materials or services.

It is also possible to obtain an additional 5%. support if the investment implements the “For Life” program or is an element of a local revitalization plan. The Ministry has also introduced solutions to make it easier for municipalities to create Social Housing Initiatives supporting the implementation of local housing policy.

The year 2023 confirms the upward trend: – This year, we are allocating a record amount of PLN 1,650 million to support this segment in our housing policy, says Waldemar Buda, Minister of Development and Technology. – This is great support for local governments in meeting the housing needs of local communities. The availability of housing loans for people with medium and low incomes is becoming lower, as are the opportunities to rent apartments on the commercial market. Building tenement houses with public funds is one of the ways to deal with difficult times on the real estate market. Thanks to our program, apartments are created of a good standard, but above all, low rent – emphasizes Minister Buda.

Apartments covered by government funding must meet certain requirements, including: be ready to move in, equipped with a bath or shower, washbasin, toilet and stove.

This year’s giveaway

This year’s program beneficiaries include several hundred entities from all over Poland.

For example, in Skierniewice, thanks to support from BSK in the amount of over PLN 18.6 million. 148 apartments of good standard and low rent will be built for the city’s most needy residents. According to Waldemar Buda, Minister of Development and Technology, Skierniewice has approximately 1,300 municipal premises. As everywhere in Poland, their standard and condition vary greatly. Thanks to government support, the city will be able to implement two large investments, thanks to which the waiting list for public housing will be significantly shortened and those in need will be able to live in decent conditions. In the years 2016-2023, 57 applications were approved from the Łódź Voivodeship. The amount of support granted was PLN 123 million, thanks to which 882 residential premises were built or will be built in the near future. The technical infrastructure necessary for this type of investment was also created.

From the pool for this year – PLN 1.65 billion, over PLN 1.4 billion has already gone to 178 institutions: communes, cities, municipal and municipal companies and non-governmental organizations. Within this amount, with the beneficiaries’ own participation, almost 7.3 thousand will be created. new or renovated residential premises, 302 places in shelters for people in crisis of homelessness and 160 places in night shelters. Apartments, the construction of which began as part of subsidies granted in 2021 and 2022, are also still being put into use. In total, 12.6 thousand apartments will soon be completed. municipal, social rented and sheltered apartments, and over 250 places in shelters, night shelters and heating rooms.

Effects of actions

New apartments are being delivered all the time, construction of which began in the last two years. Throughout the country, local governments, subsidiaries and public benefit organizations received financial support in 2021-2022 to create 12.6 thousand. apartments, of which 8,664 were municipal premises, 3,790 were social rented apartments, 114 were sheltered apartments. There will also be 154 places in shelters for the homeless and 105 places in night shelters and heating rooms. The total amount of funding granted from the Fund only in 2021 and 2022 amounted to approximately PLN 2.2 billion. For comparison, in 2014, only 121 applications were qualified for financial support, and the amount of funding barely exceeded PLN 81 million. A year later, 163 applications were approved (financing of PLN 116.5 million).

Who can apply?

Depending on the type of investment, the program can be used by both a commune and a sole-shareholder commune company, an inter-municipal association or a poviat. Grants are also awarded to non-governmental organizations and other entities conducting public benefit activities.

The program is operationally managed by Bank Gospodarstwa Krajowego (BGK). Applications for financial support should therefore be submitted to BGK in accordance with the path presented on the BGK website: https://www.bgk.pl/programy-i-fundusze/programy/bezzwrotne-wsarty-budownictwa-z-funduzu-doplat/.

Applications can be submitted at any time, are considered in the order in which they are received and qualified by the end of September each year, and the support is paid in the same year.

Filling out the application is not complicated. Thanks to the electronic form of the application, applicants fill in the required fields step by step, indicating the type and characteristics of the project and the cost estimate for its implementation. The support provided is non-returnable. It should be remembered that there is a statutory time limit for its implementation and the need to maintain the created resource for 15 years, which is a guarantee of the correct allocation of public funds.

Due to the nature of the project, a deviation from the above-mentioned rules apply to the purchase of the so-called former company apartments. The commune may keep these apartments in its own stock or sell them on preferential terms to their tenants without time limits.

What costs are subsidized?

The subsidy may cover expenses related to construction (including design, supervision and construction management, site preparation and materials and construction works necessary to implement the project), real estate renovation costs, and in the case of the purchase of a residential building or residential premises – the price less the value market value of the land. The regulations also provide for the provision of additional non-repayable financial support to local governments in connection with the construction of apartments with a higher energy efficiency standard. It is also possible to combine grants with other forms of funding.

Free projects for municipalities

Grants are not the only element of support for local governments. – We make it as easy as possible for local governments to get involved in social and municipal construction. We not only encourage and allocate record funds, but also provide free projects to start investments faster and increase the number of apartments in the commune, says Minister Buda. – We completed a competition for the architectural concept of a multi-family residential building with reduced energy consumption. The winning proposals will soon join the resources of architectural, construction and technical projects of Bank Gospodarstwa Krajowego. When implementing their investments, communes will be able to use them free of charge, adds the minister.