Funded by the European Union The residential dwelling`s rental market in Poland. Slow development. ERES Conference Regensburg University 10th June 2016 Andrzej Rajkiewicz National Energy Conservation Agency, Poland 649656 — RentalCal — H2020-EE-2014-2015/H2020-EE-2014-3-MarketUptake Page 1 Date: 12-Feb-15 Titel/Content of Presentation
General information about Poland � Population 38,5 million � Area 312 000 km 2 � Inflation rate: -0,5 %/y (2015) � Houshould`s disposal income: 320 € /person/month (2014) � Houshold`s expenditures: 267 € /person/month (2014) � Dwelling cost: 20% of houshold`s expenditures (2014) � Energy cost: 11,5% of houshold`s expenditures (2014) � GDP per capita 10 675 € (68% UE average) � 1 € =4,4 PLZ (February 2016) � 50% of population live in detached houses, 50% in live in dwellings � 80% of total housing stock constructed before 1985 uses 2-3 times more energy for heating than the current regulations require � dwelling overcrowding index 44,2% (17,1% in EU)
Housing policy goals � 1945-1989 - after second world war losses and due to industrialisation and urbanisation, typical was centrally-steered construction of large settlements by housing co-operatives and enterprises in order to assure low- cost dwellings, being in co-operative, municipal or state institutions and enterprises ownership � 1990 – - the transition of Poland towards market economy caused large scale privatisation of the dwellings located in the municipal and other buildings, which become the form of condominiums, while the housing co-operative survive rather as facility managers of existing housing stock - the role of extension of the housing stock based on increasing demand on dwellings has been undertaken by private developers, which construct the multifamily buildings in order to immediate sale of dwellings to private persons, who form automatically the condominiums 649656 — RentalCal — H2020-EE-2014-2015/H2020-EE-2014-3-MarketUptake Page 3 Date: 12-Feb-15 Titel/Content of Presentation
Housing policy goals � 1995 - - rental dwelling`s state program (called TBS, implemented by municipal special purpose companies), for low income family, available for housholds, which monthly disposal income doesn`t exceed 1,3 of regionally typical salary, 93 000 dwelling so far, next 30 000 during commitment by BGK bank running the special fund � 2014 – - Rental Dwelling`s Fund of BGK – commercial fund for institutional creation of new dwellings for rental purposes, fully equipped and located in good urban areas � 2016- - 03 June -Government`s announcement about new program for construction of low-cost buildings for rental purposes exclusively, with buy-out option by tenants 649656 — RentalCal — H2020-EE-2014-2015/H2020-EE-2014-3-MarketUptake Page 4 Date: 12-Feb-15 Titel/Content of Presentation
Funded by the European Union 649656 — RentalCal — H2020-EE-2014-2015/H2020-EE-2014-3-MarketUptake Page 5 Date: 12-Feb-15 Titel/Content of Presentation
Residential dwelling`s rental market data � 4 % of dwellings are rented based on market prices (EU28 average=19%) � 12% of dwellings are rented for rents below the market level (UE28=11%) Households structure in Poland by ownership title of flat own buidling 1,4% 3,4% 0,6% 1,4% own apartment 7,6% cooperative 0,5% familly relation 4,2% 37,8% rented from private owner rented from cooperative 9,5% rented from local authorites rented from the State Treasure rented - social (TBS) 16,1% rented from employer 17,6% 649656 — RentalCal — H2020-EE-2014-2015/H2020-EE-2014-3-MarketUptake Page 6 na Date: 12-Feb-15 Titel/Content of Presentation
Financing schemes for refurbishment of residential buildings Thermal refurbishment Fund (1998-2008) the program provided a 25% subsidy to the loan extended for � owners of buildings (home-owners assocications, co-operatives, private ones, public – municipally owned, special social purposes with not limited ownership) for up to 80% of total cost of thermal refurbishment measures the precondition was to achieve at least 25% energy savings � through measures to be financed, confirmed by the energy audit
Creation of the financing scheme – justification � Act of 1998 � Reduction of heating cost covered by households by 30%-40%, � Improvement of technical standard of 50 000-100 000 buildings, � Reduction of energy intensity of budgetary sector (schools, hospital offices) � Increase of Energy security through saving of 7-14 million Mg of coal, � Reduction of green-house gases emission and other negative environmental impact, � Creation of several dozen of thousand of work places, � Facilitation social acceptance for marketization of energy prices
Adjustment and improvement of the scheme Thermal refurbishment and renovation Fund (2008-) � the program provides a 16% subsidy to the loan extended for owners of buildings (condominiums, co-operatives, private ones, public – municipally owned, special social purposes with not limited ownership) for up to 100% of total cost of thermal refurbishment measures � the subsidy cannot be higher than 2-years heating cost savings � the precondition is to achieve energy savings through measures to be financed, at least 25% confirmed by the energy audit, � in the case of renovation of buildings constructed before 1961 the subsidy accounts to 15% of total renovation cost, by minimum of 10% of energy savings, confirmed by renovation audit, renovation measures of common sapces are also eligible
Adjustment and improvement of the scheme - justification � Act of 2008 � Special attention to old buildings owned mostly by condominiums, which are in bad technical condition � Facilitation of financing through elimination of own equity requirement, � Thermal refurbishment will be implemented in 6 million m 2 of residential multifamily buildings � Renovation of buildings will be implemented during 2008-2012 respective in:150, 300, 900, 1400 i 1900 buildings � Filling in the renovation gap estimated to 42 billion PLZ (approx. 10 billion € ) and thermal refurbishment gap estimated to approx. 43 bilion PLZ (approx. 10,2 bilion € ) � The subsidy will be neutral for the budget in short term perspective, because of tax recovery
Historical overview-budgetary spendings versus demand on subsidy Source of data: Bank Gospodarstwa Krajowego
Budget spendings and other indicators 1999-2014 Item Figures Number of buildings subsidized 32 473 Subsidies awarded value 1,774 billion PLN (0,442 billion € ) (total) Total investment value 11,124 billion PLN (2,649 billion € ) Subsidy per building 54 630 PLN (13 000 € ) Total investment value per 342 562 PLN building (81 562 € ) Yearly heat cost savings 0,796 billion PLN generated thanks subsidies (0,199 billion € ) Source of data: Bank Gospodarstwa Krajowego, own calculations
Budget spendings and other indicators 1999-2014 Item Figures Average interest rate of loans 5,26% (2014) Market coverage in % of buildings 8% (yearly 0,5-0,8%) Share of thermal refurbishment 73% subsidies (2014) Share of renovation subsidies 27% Share of subsidies for HOAs 55% Share of subsidies for co- 35% operatives Share of subsidies for others 10% Cost of energy use reduction 100 PLN/GJ (2015) (25 € /GJ) Source of data: Bank Gospodarstwa Krajowego, own calculations
Key success factors � raising heat prices � increase of creditworthiness of people and building`s owners (in large cities) � mobilization of professionals (energy auditors, facility managers, banks) � low interference by politics � strong promotion by all stakeholders, including producers of materials and equipment
Tenants cost neutral energy efficient refurbishment of a building Source of data: own calculations based on data provided by the SM Marysin Wawerski in Warsaw
Rental housing refurbishment – current trends � The private owners of buildings are eligible to use the support scheme, but they don`t use it frequently – lack of good cases � There is one crowd-funding initiative aimed to invest in rental dwellings, renovate them and rent commercially – 350 dwellings so far � 2012 was founded association of rental real estate owners „Mieszkanicznik” („Dwellinger”), which has over 1200 members and acts to civilize the rental market in order to make it more transparent, fair and to take care on technical conditions of the rented stock � the association is involved into RentalCal steering commitee and declared to participate in testing and dissemniation of the RentalCal tool among it`s members � the energy efficiency issue will be presented November 2016 by NAPE team to the participants of yearly congress of the „Dwellinger” � there are further discussions how to promote the RentalCal results in this milieu 649656 — RentalCal — H2020-EE-2014-2015/H2020-EE-2014-3-MarketUptake Page 16 Date: 12-Feb-15 Titel/Content of Presentation
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