If we want to objectively assess the state of housing affordability in the Czech Republic, the litmus test is without a doubt the situation in the capital. Prague is a magnet for residents, but although it is very attractive for many reasons, even a family with a decent income cannot afford to buy their own home here. At the same time, there is also a lack of sufficient supply of rental housing in the metropolis. Our metropolis already has at least an approved housing development strategy, and at the same time it is finalizing an action plan, which should be in a five-year period.
“Prague has also taken concrete steps to improve the conditions for the acceleration of construction, in the form of so-called contributions, i.e. a unified methodology for making contributions from private investors to public infrastructure. The contributions were approved in January this year. Prague is also working on the development of important transformation and development areas,” reminds Jaromír Hainc.
The biggest problem is still the clearance rate
Marcel Soural agrees that the city of Prague is doing its best to speed up in the metropolis, but according to him, the stumbling block is not the reluctance of the city, but the complex mechanisms that hold back permits and construction. “Everything depends primarily on simplifying the entire process of approving and permitting buildings, which starts with the Building Act. The new construction law was worked on for four years. And the moment it was accepted, its effectiveness was suspended. Now it is being worked on again, but we are all at a loss as to how the result should turn out. In my opinion, the state is completely unaware of its responsibility for the destinies of people and citizens of the republic,” he adds.
According to Jaromír Hainc, it is really crucial to build and create suitable conditions for the development of the city. According to him, it is completely secondary whether the apartment will be rented or owned. “We need to make sure that we really speed up the construction and simplify the processes. We also have to give cities and municipalities the opportunity to mark out the places in the territory where they should build,” he adds. Jan Zůrek. At the same time, he reminds us that a lot has changed in Prague since the 1990s. “We should not forget the development we have achieved. Everyone who needs to work here lives somewhere. It may be of less quality than with longer distances, but it lives,” he says.
From the developers’ point of view, the state will also help the city develop faster, because the state apparatus decides what the laws will be. According to Marcel Soural, the state must therefore show the will to start changing something, and last but not least, the officials also need to be changed. “If we want to achieve a zoning decision, we have to get roughly 75 stamps in Prague. This is simply unbearable. In addition, we are told by such bodies that will never have anything to do with our building. It just delays the process,” describes the experience of the development and construction company Trigema.
Apartments in the very center of Prague do not solve the problem
The discussion was also about whether Prague should become more densely populated, or whether the trend of expanding it to the outskirts will continue. Antonín Juriga claims that the city center itself is not as attractive in terms of residential housing as a wider center with good accessibility. “The center of Prague is not so much desired by citizens who live and work here, but rather by tourists or foreign students. We therefore focus on investments in rental housing, which are more likely to be in the wider center or on the outskirts of Prague. It is important for us that people get to their jobs quickly,” he explains.
Recent statistics from the Czech Statistical Office say that since the beginning of the 1990s, around 500,000 new houses have been built for housing. This is roughly a fifth of the existing housing stock that exists here. Thus, in the last ten years, construction has been faster than population growth. So mathematically it seems like everything should be fine. But Antonín Juriga quickly refutes these considerations. According to him, we have to live with the fact that there are many people in Prague who do not have permanent residence here, but work in the capital. “People have always migrated to large settlements, and this is still the case today. Demand simply exceeds supply and this trend will continue. The reason for this is the fact that the legislation does not yet allow flexible development of the construction of new apartments. And the number of people in the household is also decreasing,” he points out.
The standard is increasing, therefore more apartments are needed
Jaromír Hainc reminded that we must also take into account the gradual increase in housing standards, which is one of the main reasons why in recent years demand still exceeds supply. “During the census in 1991, the average area per person in Prague was 16 m2. 20 years later it was 32 m2. This means that the standard has been doubled and that space is constantly increasing. And we are still not close to the standard in Western European countries,” he describes.
There is a small percentage of rental apartments in Prague
When we compare Prague with the surrounding metropolises, it is also necessary to mention the disparity between rental and owner-occupied housing, which is unusual in the world. In this parameter, Prague and the entire Czech Republic are completely different from Western European cities, such as Amsterdam, Vienna or Munich. While in our country the share of rental housing is 23 percent, in Austria and Germany, according to Eurostat, half of the population lives in it.
“To illustrate the situation in the Czech Republic, it is also important to say that the share of rental housing owned by the city or the state is only a very small percentage. For example, Prague owns only 30,345 apartments, which is less than five percent of the entire housing stock. For example, in Munich it is 12 percent. Therefore, compared to the previous period, Prague is trying not to privatize, but on the contrary to achieve the largest possible share of apartments, in order to be able to provide housing for the necessary groups of residents,” notes Jaromír Hainc.
Around 200,000 cars come to work in the metropolis every day
Housing in the vicinity of Prague, i.e. in the Central Bohemia region, is growing the fastest in the entire country. However, this has a very negative impact on the metropolis, because if someone builds outside of Prague, it is in most cases a family house. “Such a person most likely uses a car much more often, which means a great burden on the public infrastructure. At the same time, the data shows that if someone lives near the center or in the built-up environment, the costs of infrastructure are several times lower compared to someone who lives on the outskirts,” adds Jaromír Hainc.
While almost all large western cities have a very well-developed transport infrastructure, according to the discussing experts, our metropolis did not think much about it. Around 200,000 cars come to work in the metropolis every day. “Prague wasted time pondering something that shouldn’t have been pondered. We forgot that, as such a large and important city, we should have a city ring, the Prague Ring. That we should create a network of suburban trains and connections here, so that people who cannot afford expensive ownership or rental housing can get to the capital without any problems,” says Marcel Soural.
But this problem does not concern the city center itself. Available studies also show that, in terms of mobility, Prague regularly ranks at the forefront of various world rankings. Its public transport system has a big share in this. “The traffic in the center is really very good. The problem is the commuting of people who work for Prague, but simply cannot afford to live here,” adds Jan Žůrek.
“Czechs are known to always underestimate themselves. I think that in many places in Prague we are within easy reach of the services we need. It is therefore necessary to acknowledge our successes and tell ourselves where we were good, and what we could transfer from that to areas where we are still not doing so well,” adds Jaromír Hainc.
The demand for rental housing with quality services is growing
The share of rental apartments in Prague is less than a third. According to experts, the percentage will increase, not only because of the price of real estate and mortgages, but also because of the different thinking of the younger generation in particular. Young people want to invest money in their life, in their education or perhaps in travel. That is why various rental housing projects are starting to appear, especially in Prague. This is also confirmed by Antonín Juriga, representative of the first institutionalized rental housing concept in Prague under the name XPlace.
“XPlace is a unique concept of lifelong rental housing. Its uniqueness lies in the fact that it wants to place over 1,000 rental apartments for every life situation in the near future, from students to families to seniors, and it wants to establish a long-term, high-quality and fair relationship between tenant and landlord. He wants to maintain not only the level of the standard offered, but also the high quality of the management equipment, i.e. to the newly provided services. When a tenant needs to change their apartment, they will be happy to refer to the XPlace offer again, because they will already know what they are getting into. In the past, we provided hotel services for a short period of time. There it became clear that quality is not about golden faucets in the bathroom, but about services. I am convinced that it is similar with rental housing,” concludes Juriga.