You can build an apartment and get money back for another one. Why isn’t Poland doing this?

Today, the state allocates billions of zlotys for social and municipal construction. The problem is that in the case of subsidies, the money no longer returns to the system after financing a specific investment. However, it is possible to create a mechanism in which some public funds work repeatedly – they come back in installments and rents, helping to finance subsequent apartments.

– This is how the idea of ​​the revolving housing fund that operates in Latvia works. Why not with us? – asks Jarosław Jędrzyński, expert of the RynekPierwotny.pl portal.

Poland spends billions

The scale of public financing of housing in Poland has increased significantly. The Ministry of Energy and Technology announced on July 3, 2026 that over PLN 4 billion has been reserved in this year’s social and municipal housing program. After both stages of qualification, support is expected to cover approximately 18,000 people. apartments, nearly 3.3 thousand places in dormitories and approximately 450 intervention places.

At the same time, BGK announced in April that in 2026 it will accept and qualify applications for preferential SBC loans worth over PLN 2 billion. The money is expected to finance at least PLN 9,000. social housing.

Therefore, Poland already benefits from both subsidies and preferential repayable financing. The problem, however, is that they do not create one lasting capital circuit in which the recovered funds would automatically finance the next pool of apartments.

It is worth recalling the Government Housing Development Fund. RFRM financed, among others: municipalities taking up shares in social housing initiatives, but it was not a revolving fund in this sense. After using the money allocated for it, it was liquidated in December 2024.

The new mechanism would not have to replace current programs. Rather, it could complement them and combine grants with repayable financing.

Budget decisions

Analysts of the RynekPierwotny.pl website point out that Polish housing policy is largely dependent on subsequent budget decisions. The state supplies existing programs with new pools of money, and the scale of support depends on the funds available in a given year. When the needs are greater, part of the investment must wait for the next program funding.

A revolving housing fund would work differently. Some of the money would not be a one-time expense, but would return to the system and finance subsequent projects.

Of course, this is not a perpetual motion machine. The fund needs large start-up capital, good management and investments that are able to repay at least part of the costs incurred and at the same time allow rents to be kept at a moderate level.

– The success of such a solution is determined not by the name of the fund itself, but by whether the money will actually return to it and work again for further housing investments – comments Jarosław Jędrzyński, an expert at the RynekPierwotny.pl portal.

The same money can finance additional apartments

The principle is relatively simple. With a classic subsidy, the state provides money for construction and that is where their role ends. In the revolving system, part of the support may take the form of a very long and cheap loan, participation in an investment or another solution thanks to which the funds are gradually returned.

The money recovered from the first investment can then help finance the second, then the third and subsequent ones.

The OECD in its “Brick by Brick” study describes systems in which part of the rents or loan repayments support the construction of additional social and affordable housing. Individual countries organize this circulation of money in different ways.

Latvia is a good example. The model analyzed by the OECD assumes that the repaid financing returns to the fund, and after the loan is repaid, part of the rental income also goes to it. In Austria, a similar effect is achieved through a system of limited-profit entities that reinvest surpluses in housing.

So it’s not about creating a miraculous money-producing machine. The idea is that at least part of the public zloty allocated for housing can be used more than once. Cheap rent means someone has to cover some of the costs

This is where the most difficult part of the whole puzzle begins.

If the apartment is to be rented significantly cheaper than on the free market, its rent cannot cover the very expensive land, high construction costs and financing on commercial terms.

Therefore, such a system needs cheap and patient capital, a very long repayment period and the participation of public funds. Land transferred by the state or local governments on preferential terms may also help.

Not everything has to be financed back. There are expenses that cannot be expected to be covered by future rents. This applies, for example, to expensive development of the area, removal of ground contamination, adaptation of the building to the needs of people with disabilities, and exceptionally thorough energy modernization.

The subsidy should primarily cover that part of the investment that the low rent simply cannot finance. The remaining part can be financed in such a way that the money gradually returns to the system.

And this is where the balance needs to be found. If the installments are too high, rents will increase and apartments will no longer be available to the groups for which they were created. However, if the state covers almost everything with a subsidy, the mechanism will cease to be renewable.

Billions alone are not enough

There is one more problem. Even the best-designed fund will not build apartments if there are no prepared investments. What is needed is land, a local plan or appropriate planning decisions, documentation, design, operator and contractor. Meanwhile, some local governments do not have a properly prepared investment pipeline.

Therefore, the fund should help not only in the construction itself, but also in the preparation of the investment – finance documentation, analyses, development of areas and the development of competences of local housing entities.

The scale and distribution of risk also matter. If most of the money goes to a few huge investments, delaying one of them could have a major impact on the entire program. On the other hand, fragmenting funds into hundreds of very small projects will increase management costs. Therefore, a portfolio of investments from different cities and at different stages of implementation would be needed.

The fund should be assessed after several years, not after cutting the ribbon

In the case of a regular subsidy, success is easy to demonstrate: we spent a certain amount and so many apartments were built.

With a revolving fund, such a balance will be much more complicated. It will be necessary to check not only the number of premises built, but also rent revenues, the level of arrears, vacancies, building maintenance costs and, above all, how many subsequent investments were financed thanks to the recovered funds.

Therefore, the effects of such a solution should be assessed after ten or even twenty years.

Protections against deriving values ​​from the system would also be needed. If a publicly co-financed apartment is sold at a market price after some time, part of the benefit should return to the fund. Similarly, in the case of an operator achieving large surpluses, the rules should indicate what part of the money is left for renovations and maintenance of the stock, and what part is used to build additional apartments.

Inflation may eat away at renewables

Another challenge is time. Money returned after thirty years will not have the same value as today. If a fund borrows money almost for free and then recovers only nominally similar amounts for decades, its real ability to finance new investments may gradually decrease.

Financing conditions must therefore reconcile two contradictory goals: the lowest possible rent for residents and maintaining the real value of capital.

Perhaps the fund would still require periodic recapitalization by the state. The difference, however, would be that the new funds would be added to the money already working in the system, instead of starting financing practically from scratch each time.

There is no need for another large institution

Poland does not have to copy exactly the Latvian, Austrian or any other model. There would also be no need to create one huge office or another extensive institution. The system can be based on existing entities: BGK, SIMs, TBSs, cooperatives or municipal companies.

The most important thing is something else: clear rules for money flow and a guarantee that the funds recovered from one investment will not disappear into current expenses, but will be allocated to subsequent apartments.

The subsidy will still be needed because it is impossible to build truly cheap housing solely on commercial principles. But not every public dollar has to end its journey when the building is put into use.

The most effective system could therefore combine both solutions: subsidize that part of the costs that the low rent cannot cover, and finance the rest so that the money gradually returns.

– Only then the public zloty allocated to housing ceases to be a one-off expense and begins to be used for subsequent investments – summarizes Jarosław Jędrzyński.

Jarosław Jędrzyński, expert of the RynekPierwotny.pl portal