At today’s session, the Government adopted the Decision on Adopting the Affordable Rental Programme. According to the Programme, as future tenants, multimember families with low incomes between the ages of 25 and 45 will be awarded the highest number of points, while also considering other life circumstances. The Programme was presented by Deputy Prime Minister and Minister of Physical Planning, Construction and State Assets Branko Bačić.
“In March this year the Government adopted the National Housing Policy Plan, which envisaged three priority goals - affordable housing, sustainable housing and managing space for housing purposes. While developing the Plan, we ascertained that there are 600,000 vacant housing units in Croatia and a shortage of 236,000 housing units to achieve affordable housing. This is when we decided that Affordable Rental Programme would be the fastest solution to activate the necessary housing units,” Minister Bačić said while presenting the Affordable Rental Programme.
The Affordable Rental Programme focuses on activating state- and privately-owned vacant apartments which, along with payments to owners, would be made available for rent to citizens who cannot resolve their housing situation on the market.
“We plan to activate, on the one hand, vacant apartments owned by natural persons, and, on the other hand, vacant housing units owned by the Republic of Croatia - there are about a thousand of them. Currently we are preparing to activate around 300 such apartments,” the Minister said.
The target groups are households with unresolved housing situation and with no ownership of residential real estate, households with minimal to average incomes, young persons and families with several children, persons with disabilities and persons whose professions are listed as shortage occupations.
The Programme will be implemented by the Agency for Transactions and Mediation in Immovable Properties (APN), while local self-government units will provide APN with data on needs in their respective territories and with lists of shortage occupations, based on which APN will publish public calls for owners of vacant apartments and interested tenants in the media and on its website.
The affordable rent is paid to the Agency for Transactions and Mediation in Immovable Properties (APN), and it cannot exceed 30% of monthly household income, reduced by utility costs. The difference to the market price will be covered by the state. Apartment owners will receive compensation in the amount of the local median rent, paid in two instalments.
For instance, a family with a total income of 2,000 euro would pay rent for an apartment of 60 square metres according to the following formula: income x 0.30 - €2.50/m2 = 600 - 150 (utilities), which would ultimately result in 450 euro per month. If their income were to increase, so would the rent, while in the event of a decrease in income, the family would be entitled to request adjustments. The difference up to the amount the owner receives would be compensated by APN.
At least once a year APN will gather information on the overall income of the tenant and all immediate family members for the previous year from the Tax Administration. If the tenant’s or immediate family members’ income increases by more than 15% per year, the tenant is obliged to inform APN on the new income circumstances within 30 days from the date of the increase.
Scoring criteria
Scoring criteria for tenants who apply are income and the number of immediate family members, the number of preschool children and the number of school children, the tenant’s age, professional qualifications, degree of disabilities (or of an immediate family member), residence, the need for shortage occupations in the local self-government unit.
With regard to scoring the tenant’s income, if it amounts to between one and one and a half minimum salary, they are awarded the maximum number of points - 10. For incomes between one and a half and two minimum salaries, 7 points are awarded, 5 points for incomes between two and three minimum salaries, 3 points for incomes between three and four minimum salaries, and if the income is higher than four to five minimal salaries, 1 point is awarded.
Points also vary according to the number of immediate family members. If the tenant is single, the person is awarded 1 point. If there are five or more family members, the maximum 9 points are awarded. Additional 2 points can be awarded if the tenant is a single parent, adoptive parent or a member of a single-parent family. The tenant is awarded 3 points for every child.
With respect to the established degree and severity of disability of the tenant or an immediate family member, 10 points are awarded for a child with developmental disabilities, 8 points for 100% disability, 6 points for 80-100% disability or bodily impairment, and 4 points for 50-80% disability.
Additional 8 points can be awarded to applicants if they are persons without appropriate parental care, persons up to 30 years of age leaving the social and alternative care system, children of a deceased or missing Croatian war veteran from the Homeland War.
With regard to the applicant’s age, the maximum number of points, 12, is awarded to tenants between the ages of 25 and 45, 8 points to those between 18 and 25, 6 points to persons between 45 and 55, and 4 points to those above the age of 55.
Local self-government units can define two categories of shortage occupations - 8 points can be awarded for the first one and 6 points for the second one. Half a point is awarded for each year of residence in the local self-government unit where rent is requested, but no more than 10 points.
In the event of the same number of points, priority is given to family members of deceased or missing Croatian veterans, war invalids, volunteers and veterans.
The owner of the real estate they wish to rent should prove the apartment has been vacant for two years. Together with HEP bills, bills from other utility providers will also be accepted as proof. Exceptions to the two-year rule will be precisely defined by the Affordable Housing Act, which should enter public consultation by the end of the year.
Payment to owners
The owners of real estate included in the Affordable Rental Programme are entitled to compensation equal to the amount of the local median rent.
It will be paid in two instalments - 60% immediately upon transferring the real estate to APN and the remaining 40% after half of the contracted period has passed.
For instance, for an apartment of 60 square metres in Zagreb for a contracted period of five years, the median rent is 660 euro per month. This amounts to 7,920 euro per year, or 39,600 euro for five years. The first instalment would be 23,760 euro and the second 15,840 euro.
If the real estate is not usable, the owner is obliged by contract to put it in usable conditions within six months.
APN will rent the real estate free of people and belongings, except for items necessary for the regular use of the real estate, whereby APN is not responsible for the condition of these items, except for kitchen elements and white goods appliances if they are in the rented real estate.
The tenant is obliged to take care of the housing unit and conduct regular maintenance, which is further defined by the rental agreement.
The agreement on granting the use of the apartment is concluded between APN and the owner, after selecting the tenant, while the rental agreement is concluded between APN and the tenant.
APN carries out all administrative and technical tasks for Programme implementation and keeps a database of expressions of interest and concluded contracts. APN will publish public calls for both tenants and landlords.
“We plan to publish public calls by the end of the year - one for owners whose apartments have been vacant for more than two years so they could enter the rental market, and the other one for tenants who cannot acquire affordable housing. According to the priority list, these apartments will be occupied,” Minister Bačić announced.
Source: HINA/MPGI
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