1. A global multidisciplinary network on housing research and learning WHAT IS THE ADDED VALUE OF PUBLIC RENTAL HOUSING PROGRAMME AS SOCIAL INNOVATION Gojko Bežovan Faculty of Law, University of Zagreb, Croatia Josip Pandžić Faculty of Law, University of Zagreb, Croatia Bratislava, 25 September 2015 Second International Conference

2. SUMMARY Zagreb’s public rental housing programme as social innovation Public rental housing programme in city of Zagreb has been created to meet the needs of young families with children who are not eligible for residual social renting housing and they can’t afford housing loans to buy appropriate flats. Private renting housing market in cities is a fate for majority of young families renting small and expensive housing units, mostly without contract and, being sub- tenants and almost socially excluded people. Public rental housing programme comes like innovation to meet pressing housing needs. Homeownership programme is not sustainable

3. Housing estate of Novi Jelkovec, Zagreb – Location in the City

4. Housing estate of Novi Jelkovec – Zagreb

5. Housing Tenure Structure in Zagreb 2001 – 2011 Housing tenure Households 2001. 275,464 Total percentage 100.0% Households 2011. 303,441 Total percentage 100.0% Homeownership 222,697 80.8%259,83385.6% Private renting 11,742 4.3% 15,0104.9% Social housing 9,630 3.5% 6,5892.1% Renting part of flats 2,630 0.8% 3,4781.1% Housing – relatives 23,375 8.5% 16,3255.4% Others 5,731 2.1% 2,1600.7%

6. Housing market challenges Croatian economy in recession sixth consecutive year and lost 12.9% of GDP. Unemployment in 2014 was 17.3%. From 2008 to 2013 risk of poverty was from 17.3 to 19.5%. Budget deficit was 4.1% of GDP in 2014 and public debt reached 78% of GDP. Migration of young to the West. Demand for housing loans going down and estimations say that about 16% of housing loans are in repayment risk. Share of housing loans in GDP in 2014 is 18.3%. From 2009 to 2014 housing prices in country went down by 33.5% in Zagreb by 35.1%. Level of rent decreased, estimated by 25%. Housing loans in Swiss Franc, increased number of evicted families and now it is a public issue.

7. How does public rental housing programme reach target groups? Recent survey of 270 families conducted in this housing estate shows that before 64.8% were sub- tenants, and 21.9 living with parents. Households exposed to an uncontrolled and instable housing market of private renting sector and those living with families became tenants in affordable public rental housing. Previously, they lived in small and inadequate flats so their housing needs were not met Program turned out to be very efficient, successfully reaching target population

8. Level of quality of life Research done is focused on the following variables to measure the impact of this social innovation on tenant’s welfare: (1) Objective (number of rooms, flat size and rent costs); and (2) Subjective (satisfaction with housing quality and safety; satisfaction with the neighbourhood environment and infrastructure)

9. Table 1: Comparison of housing conditions before and after entering the programme IndicatorFlatNMSDtp Number of rooms Before2692.13.96 -13.72.000 Now2693.11.80 Size in m 2 Before26757.7526.33 -14.390.000 Now26785.3817.26 Rent costs Before1821625.31518.70 -1.964.051 Now1821700.65246.20 Housing quality assessment Before2685.672.16 -9.740.000 Now2687.421.87 Satisfaction with environmental- infrastructural factors Before26223.154.63 -.810.418 Now26223.474.29

10. IndicatorHousingNMSDTp Safety Before2703.561.29 2.212.028 Now2703.331.26 Quality of green spaces or parks Before2703.691.31 -2.094.037 Now2703.931.11 Environmental cleanliness Before2703.691.06 2.572.011 Now2703.431.29 Privacy Before Now 270 3.38 4.39 1.36.97 -9.588.011 Table 2. Comparison of satisfaction with particular environmental-infrastructural indicators between former and present housing

11. Differences regarding the satisfaction with environmental-infrastructural factors exist within the neighbourhood with regards to four housing blocks (A, B, C and D). Table 3: Differences in level of satisfaction with environmental-infrastructural factors regarding housing blocks Environmental- infrastructural factors BlockNMSDFp Safety A1023.321.299.889.447 B533.091.244 C233.48.994 D923.421.294 Quality of green spaces or parks A1023.551.191 9.478.000 B533.811.287 C234.26.810 D924.33.813 Environmental cleanliness A1022.871.295 25.837.000 B532.961.358 C234.13.626 D924.14.897

12. Housing estate of Novi Jelkovec with A, B, C and D housing blocks Event Name

13. Coping with the crisis Part of the problem with which this population was dealing were related to housing costs; a big share of usually low-income households’ budget – especially if they were renting flats in the private rental market – was spent on housing costs while other needs regularly remained unsatisfied. These households still use various strategies of coping with high housing costs (Table 4). Part of tenants with lower education and with low income rent larger flats and they have problems with paying rent and living cost, not eligible for housing allowance (flat examples are following)

14. Table 5. Frequency distribution for strategies of coping with high housing costs Coping strategies YesNo f%f% Limit energy consumption20677.26122.8 Limit expenses for other needs20777.56022.5 Work overtime12446.314453.7 Spend our savings6223.720076.3 Sell assets176.424893.6 Rent out part of flat00.0266100.0 Look for a cheaper flat259.424190.6 Financial aid from family and friends5821.720978.3 Seek housing allowance238.624391.4 Have additional jobs9334.817465.2 Bank loans18267.98632.1 Other135.920794.1

15. Big flat examples: (1) 3-room flat – 100.03 m 2 (2) 4-room flat – 134.57 m 2 Event Name

16. Additional findings With the purpose of better understanding the position of different families as users of this innovation we tested two hypotheses: Hypothesis 1: Tenants with lower education and lower income which live in larger flats have more complaints related to conditions and costs of housing. The hypothesis has partly been confirmed that tenants with lower monthly income estimate housing costs as higher. Hypothesis 2: Tenants who were previously rented smaller flats are more satisfied with housing conditions. The hypothesis has partly been confirmed that they are more satisfied with the size of flats. Furthermore, they are more satisfied with facilities and the environment in this housing estate.

17. Conclusion (I) With reaching target groups vulnerable on the housing market (93%) this innovation fulfilled an important part of its mission. The residents’ quality of life in public rental housing has been visibly improved compared to their previous housing. They live in new, decent and sufficiently large flats with stabile contracts where they can control their life and make plans for their future. Stabile housing contract for five years means real social integration, demographic investment and contribution to social cohesion. As the housing estate where they live is still in construction, the level of the quality of life in that respect is partly reduced. However, inside this housing estate the quality of life differs in terms of green spaces, parks and a clean environment. During the crisis households with a lower income have been threatened with a rather high rent and high living costs. They cope with these challenges mostly by limiting other expenses for other needs and consumption of energy, borrowing from banks and making more money.

18. Conclusion (II) In terms of internal organisation and mode of working, the innovation is rather stabile and only a marginal number of tenants terminated contracts and left housing. There is more room for the interaction of this innovation with the local welfare system. As output, this innovation made affordable decent housing for vulnerable social groups. The residents' wellbeing and quality of life have been enhanced and this is the outcome of this innovation. The innovation addressed the vital needs and enabled beneficiaries to plan their future – contributing thus to social integration, active citizenship and strengthened social cohesion - which is considered as the impact of the innovation. In that way this innovation has clear contour of social investment project.

19. This project is funded with support from the European Commission (Project number 539369-LLP1- 2013-1-ES-ERASMUS). This publication reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein. If you would like more information about the content of this presentation please contact: info@oikonet.org [gojko.bezovan@pravo.hr] [jpandzic@pravo.hr] or visit our web site www.oikonet.org