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ROMANIA
Advisory Services Agreement on
Strengthening the Regulatory Impact Assessment Framework in
Romania
RIA Pilot Project Report:
Analysis on Social Housing
Ministry of Regional Development and Public Administration
July 2015
Table of Contents
Section 1. General information on the initiative ....................................................................... 4
1.1. Responsible department..................................................................................................... 4
1.2. Contact persons .................................................................................................................. 5
Section 2. Rationale for launching the initiative........................................................................ 5
2.1. Problem definition .............................................................................................................. 5
2.2. No-action option (baseline scenario) ............................................................................... 26
2.3. Objectives ......................................................................................................................... 29
2.4. Formulation of options ..................................................................................................... 30
Section 3. Preferred option ..................................................................................................... 32
3.1. Description of the option .................................................................................................. 32
3.2. Financial impact on public authorities .............................................................................. 42
3.3. Economic impacts on businesses and consumers ............................................................ 45
3.4. Social / Health impacts ..................................................................................................... 49
3.5. Environmental impacts ..................................................................................................... 51
Section 4. Alternative options ................................................................................................. 53
4.1. Description of options ...................................................................................................... 53
4.2. Financial impacts on public authorities ............................................................................ 61
4.3. Economic impacts on on businesses and consumers ....................................................... 63
4.4. Social / Health impacts ..................................................................................................... 66
4.5. Environmental impacts ..................................................................................................... 66
Section 5. Public consultation process (art. 7 of Law 52/2003) .............................................. 66
Section 6. Post-adoption arrangements (for preferred option only) ...................................... 69
6.1. Implementation arrangements ......................................................................................... 70
6.2. Monitoring and evaluation activities ................................................................................ 71
Annex 1. Beneficiaries .............................................................................................................. 73
Annex 2. List of participants in consultation meetings ........................................................... 75
3
List of Abbreviations
BPIE Building Performance Institute Europe
CECODHAS European Network for the promotion of decent housing for all – The
European Liaison Committee for Social Housing
DGRDI Directorate General for Regional Development and Infrastructure (in
MRDPA)
EU European Union
GD Government Decision
LPA Local Public Authorities
MH Ministry of Health
MJ Ministry of Justice
MLFSPE Ministry of Labour, Family, Social Protection and Elder People
MPF Ministry of Public Finances
MRDPA Ministry of Regional Development and Public Administration
NGO Non-governmental organization
NHS National Housing Strategy
NIS National Institute of Statistics
NPPSH National Public Policy on Social Housing
NSSIPR National Strategy on Social Inclusion and Poverty Reduction
OPTA Operational Program of Technical Assistance (for Romanian
Government)
PPS Purchasing Power Standards (see EUROSTAT)
PPU Public Policy Unit (in MRDPA)
RGSRCMR Romanian Government Strategy on Inclusion of Romanian Citizens
belonging to Roma Minority, 2015-2020
RIA Regulatory Impact Assessment
SN Substantiation Note
SNR Substantiation Note Report
TWGSH Technical Working Group in charge of analyzing social housing issues in
Romania
(established in MRDPA)
UN United Nations
UNECE United Nations Economic Commission for Europe
4
Section 1. General Information on the Initiative
For the purpose of this Report and according to Law 24/2000, substantiation refers to “instruments
of presentation and substantiation” and is an umbrella concept for (Article 30.1):
Reason note: accompanying legal drafts and legislative proposals;
Substantiation note, in the case of government decisions and ordinances;
Approval report, for all other legal acts;
Impact study, supporting legal drafts of “high importance and complexity”.
Although various in name, all the documents above share a fairly identical content and one single
difference: they accompany acts of distinct nature. Deriving for this, and for the scope of this Report,
a unitary concept will be used to address the issue of substantiation: Substantiation Note.
In accordance with the provisions of the Government Decision 1/2013, as subsequently amended and
supplemented, the Ministry of Regional Development and Public Administration (hereinafter referred
to as MRDPA) develops the governmental policy in the field of regional development, territorial
cohesion and development, cross-border, transnational and interregional cooperation, construction
discipline, territorial landscaping, urbanism and architecture, habitation, housing, residential
buildings, thermal rehabilitation of buildings, real-estate and urban management, public works,
constructions, central and local public administration.
In regard to social housing, MRDPA carries out activities based on the strategic planning functions. For
instance, it develops the National Housing Strategy, the national housing policies and programs, it
plays the role of Secretariat of the National Center for Human Settlements; it prepares regulations in
these fields (developing/updating the legal framework and technical regulations) and it implements
the programs financed from community, national funds, as well as from other sources legally
established.
The preparation of this Regulatory Impact Assessment (RIA) in the form of the Substantiation Note on
Social Housing has been initiated with the view to review the current situation of social housing in
order to potentially substantiate amendments to the Law No. 114/1996 – The Housing Law – and
aiming to formulate a public policy on social housing, in line with the Government commitments
undertaken in the National Strategies on Social Inclusion and Poverty Reduction (2015-2020) and on
Inclusion of Romanian Citizens belonging to Roma Minority (2015-2020).
1.1. Responsible department
The structure responsible for assessing the impact of the regulation is the Technical Working Group in
charge of analyzing the social housing issues in Romania, hereinafter referred to as TWGSL, appointed
by the Minister for Regional Development and Public Administration as per the Order 1507/2014. The
Working Group is composed of specialists from the main departments of MRDPA, relevant for the
implementation of the assessment, from the strategic planning, technical, economic and legal areas.
1.2. Contact persons
Anca GINAVAR – Head of Service in the Directorate General for Regional Development and
Infrastructure (DGRDI), [email protected];
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Teofil GHERCA – Head of Service in the Directorate General for Regional Development and
Infrastructure (DGRDI), teofil.ghercă@mrdpa.ro;
Bogdan GHINEA – Evaluation-examination adviser DGRDI, [email protected];
Florin DEMIAN – Public Manager PPU, [email protected];
Viorela KOVACS – Public Manager PPU, [email protected];
Cătălin BĂLAN – Public Manager, DGJRP, [email protected];
Oana SACHELARI – Head of Service DGMFRUA, [email protected];
Section 2. Rationale for Launching the Initiative
The purpose of social housing is to contribute to social inclusion of the beneficiaries by ensuring good
housing conditions, which facilitate their integration/ reintegration into the labour market, obtaining
and maintaining a good health condition, adequate access and adequate attendance of education
and/ or vocational training and active social participation.
The issue of social housing is therefore very comprehensive and it covers aspects related to building
social dwellings, means of accessing dwellings by different social categories, as well as managing the
stock of social dwellings by the owners and their current in-use maintenance by the inhabitants.
In Romania, the number of people with difficulties concerning the access to adequate housing is still
significant, and tends to increase in the case of several vulnerable groups. Increase in social
polarization1, in both large and small cities and in rural settlements as well, generates more difficulties
for poor households, both to access a convenient dwelling and to increase the number of those which
are practically excluded from reaching housing, either being homeless or living in insalubrious
conditions.
The main regulation on social housing is the Law No. 114/1996 – The Housing Law – subsequently
amended and supplemented, republished and complemented by its implementation guidelines. Other
legal instruments contribute to regulate the issue of social housing: some elements related to social
dwellings can also be found in the Law on local public administration 215/2001, as well as in the Law
on preventing and combating social marginalization 116/2002, and Law on social assistance 292/2011.
2.1. Problem definition
2.1.1. International legal framework on housing
Access to housing is a fundamental right that can be deemed a prerequisite for also accessing and
exercising other fundamental rights and a dignified life. Romania has signed the main international
and European conventions that frame the right to housing, as follows:
Convention on the Elimination of all Forms of Racial Discrimination on 15 September 1970
International Covenant on Civil and Political Rights, on 9 December 1974
International Covenant on Economic, Social and Cultural Rights, on 9 December 1974
International Convention on the Elimination of All Forms of Discrimination Against
Women, on January 7, 1982
Convention on the Rights of the Child, on September 28, 1990
1 See, for example, the article “Situatia saraciei in Romania, in context international, in 2013” (Poverty situation in Romania, within the international context, in 2013), in “Calitatea Vietii” no. 4/2013, ICCV, Bucharest
6
European Convention for the Protection of Human Rights and Fundamental Freedoms, on
20 June 1994
Framework Convention for the Protection of National Minorities, on 11 May 1995
Revised European Social Charter, on 7 May 1999.
The Universal Declaration of Human Rights states that “everyone has the right to a standard of living
adequate for the health and well-being of himself and of his family, including food, clothing, housing
and medical care” (UN, 1948, art. 25 par. 1). The revised Social Charter of the Council of Europe
includes an express reference to “the right to housing” and calls on all its signing parties to take
measures designed “to encourage access to housing of an adequate standard, to prevent and reduce
homelessness, with the view to its gradual elimination, to make cost of housing affordable for those
lacking sufficient resources” (art. 31).
Based on the principle of subsidiarity, housing is a public policy area of exclusive competence of the
Member States of the European Union. Various housing strategies and policies implemented by the
Member States reflect different realities in respect of the size and structure of the housing stock by
type of ownership or holding of units, which, in turn are reflected in different approaches to means
and extent of support granted by public authorities for the improvement of access of households to
adequate housing.
However, housing related problems are significantly influenced by the EU regulations and guidelines,
especially those referring to environment, energy, regional development, and free movement of
persons, goods and services issues. Also, it is worth noting that housing can be frequently found on
the European agenda, taking into consideration its social, heritage and economic implications for the
real estate market. Therefore, various European documents such as joint declarations of European
Ministers responsible for housing or reports and resolutions of the European Parliament and
regulations and directives create a common framework for public action at the European level.
For the current exercise, the European Parliament Resolution of June 11th, 2013, on social housing in
the European Union [2012/2293(INI)] is highly relevant as it provides useful guidelines to both
changing the current Romanian housing regulations and to the development of an integrated public
policy on social housing that takes into consideration both the construction framework and relevant
social inclusion objectives.
The social housing policy of the European Union focuses on providing decent dwellings at accessible
prices for the households that face difficulties in finding a house in the conditions and price of the
market, due to their members’ specific problems and needs (persons with disabilities or elders,
immigrants, students, large families, etc.), while maintaining the social mix at the urban level and
promoting social integration through housing.
International approaches on social housing
According to UNECE,2 defining a single, clear-cut concept of social housing is not an easy task as its
content varies across countries. Usually the concept is used to define “social rental housing”, although
sometimes it also encompasses such realities as cooperative housing, owner occupied housing that
2 United Nations Economic Commission for Europe, Guidelines on Social Housing: Principles and Examples, New York and Geneva, 2006
7
meet legally imposed criteria to qualify as social housing3 or other arrangements. Social housing stock
generally only reflects a physical dimension of the social housing policy employed by one country.
In international housing statistics, rental-housing stock is often divided into “private rental” and
“social rental” dwellings although, in some instances, social housing stock also comprises privately
owned dwelling rented for social housing purposes. Social housing dwellings are usually built with
public-sector support, granted provided specific conditions are met.
Across Europe and between the Western and in transition countries, the following are the most
important factors enabling a distinction to be made between social rental dwellings and other types
of dwellings.
Social rental housing in Western European countries
The following principles are commonly used in Western European countries4 to deal with social
housing:
Public support is usually granted to social housing dwellings construction. Public support, either from the central and/ or the local governments, is granted to social rental housing corporations. Construction support may target both new buildings and major repairs to existing ones aimed at increasing housing production, improving the quality of dwellings, promoting renovation and lowering the capital costs. Support instruments include loans granted by the government, interest subsidies, grants, guarantees or tax reductions, in various combinations. From the tenants’ perspective, a cost-pricing model is widely used to determine the level of the rent. Capital expenditures and all operating expenses paid by the owner, such as the cost of administration, maintenance and repairs and often heating are included in the rent. Many countries regulate the rents and keep them below market levels so that tenants benefit from lower capital costs.
Social dwellings are usually allocated to the population groups in most need. This can
be done using selection criteria set by central and local governments, which can be based
on income ceilings and/or an explicit or implicit rating system that take into consideration
various factors affecting housing needs.
Ownership of social rental housing is subject to restrictions, so that the government can
guarantee that the support it grants actually serves its housing policy aims. In the most
common ownership arrangements, buildings are owned by local authorities (either
directly or via municipally owned companies) or non-profit organizations.
Residents of social rental dwellings usually enjoy better protection against eviction than
residents in private rental dwellings.
Residents of social housing are usually involved in decision-making. Tenant participation
is either required by law or a practice developed by social housing owners.
3 This approach is important to be considered in the Romanian context, where the overwhelming majority of housing stock is privatized and most of occupants own their dwelling. Although this aspect is considered, in the SN, the inclusion of this category of dwellings under the “social housing” label has to be more in-depth analyzed, given the magnitude of the situation and the economic and social implications.
4 The following review refers especially to Central and Northern Europe. The development of housing policy and social housing in most South European countries has, to a certain extent, been different because of delayed urbanization and stronger rural settlement, which have resulted in the governments’ of these countries being less involved in housing.
8
Social housing in the countries in transition
There is no common definition of social housing in the countries in transition. However, the
following are common features.
Publicly supported rental housing is generally targeted at low-income and generally
disadvantaged households, as poor economic conditions and widespread social housing
problems, especially homelessness, pressure governments to address the most stringent
needs only.
“Social housing” may be defined in various social housing acts and programs, which,
however, are poorly if at all implemented. In other instances, part of the housing stock
can be labelled as social housing, but the term “social housing” is not used in policy
documents or legislation.
Municipal rental housing seems to be the most common way to define or label social
rental housing in countries in transition. This approach can be seen, for instance, in
Bulgaria, Romania, the Russian Federation, Slovakia and Slovenia.
The definition of social housing used by the European Liaison Committee for Social Housing
(CECODHAS) is widely used in the region. CECODHAS considers that “despite the great diversity of
forms of social housing in the Member States [of CECODHAS], the primary role of social housing is to
help households with problems in gaining access to decent housing on the market to find
accommodation in an adequate social and urban mix. The common feature of social housing in the
Member States is the existence of rules of allocating housing to benefiting households. Defining these
rules for allocating housing is the responsibility of the Member States and their public authorities. They
are aimed at overcoming the problems of the system of allocating the supply of housing on demand
through the free working of the market, problems that result from a structural deficit of decent and
affordable housing.”
2.1.2. Background information on housing at the national level
Romania is currently confronted with serious challenges related to the dwelling of social housing and
social services. At present, in Romania as well as in other countries, the insufficient number of social
houses exacerbates social disparities and aggravates the social integration processes (see Table 1).
Almost 20 years since the adoption of the Housing Law 114/1996, in the context of strong social and
economic changes, a reassessment thereof is required as regards both the timeliness of its provisions,
the impact of its application and the adequacy to the new challenges. This Substantiation Note intends
to provide evidence and information to support such a reassessment.
Table 1. Number of completed dwellings between 2000 and 2011
Source: Territorial statistics of NIS, 2011.
2000 2005 2010 2011
Private funds 24703 27742 45983 43062
Public funds 1587 5126 2879 2357
Total 26290 32868 48862 45419
0100002000030000400005000060000
9
During the communist era, the transition from a mainly agrarian society to a society based on massive
industrialization was accompanied by significant migration flows towards urban areas, which, in turn,
required massive construction projects of collective housing, financed and built by the State.
After the fall of the communism, there has been a privatization process of the existing housing stock
and the State has given up its role of main finance provider for and developer of housing construction.
The housing stock has been massively privatized at the beginning of the 1990s (98% of housing stock
in Romania is now privately-owned, and in the cases of collective housing units, the overwhelming
majority of housing units is owner-occupied) and only the dwellings that were occupied by very poor
families in these collective units remained in state property (scattered, isolated in buildings).
The housing stock that was subject to nationalization or confiscation after the war (mansions, villas,
blocks of flats built in the between-wars era, etc.) has been subject to a less coherent path: part of the
(sometimes later created5) flats have been sold to occupants and other dwellings or buildings have
been subject to restitution to previous owners or are still under claims disputes in justice. On one
hand, the whole complicated and unpredictable process contributed to a deterioration of the estates,
either because of improper use or because of lack of resources and predictability concerning the
future, thus impeding investment decisions and conservation measures. On the other hand, in many
cases the quality of housing was very low, mainly in the case of artificially divided units, or people
remained very vulnerable to eviction.
The Romanian government has committed through legally binding documents to meet specific
objectives on housing, both in relation to sustainable development, poverty reduction and social
inclusion and the inclusion of Romanian citizens belonging to disadvantaged groups, including Roma
minority. In this context, serious analyses of both national housing policies and programs and of the
applicable legal framework are deemed necessary6.
The current legal framework
The legal framework governing the housing sector is represented by a complex package of legislation
that has been adopted in stages, as the portfolio of housing programs has increased.
The lack of a housing strategy to guide the legislation and programs on housing has led to various
classifications of the types of housing owned or developed by the local authorities, which are poorly
adapted to local, various and continuously changing needs.
Definitions
According to art. 2, c) of the Housing Law no. 114/1996, social housing is defined as the housing unit
allotted with subsidized rent to individuals or families whose economic situation does not allow them
access to housing ownership or rental under market conditions.
5 By subdividing either whole mansions or larger flats in between-the-wars buildings in smaller habitable spaces/ flats, very often lacking or using in common amenities as kitchens, bathrooms, toilets.
6 In this respect, two ongoing and complementary exercises are intended to substantiate the Government’s future action in social habitation policy formulation. Both exercises are performed under the assistance of the World Bank. One of the exercises refers to the present regulatory impact assessment and the other one is carried within the project titled "Coordination and efficient and transparent selection of infrastructure projects financed from the structural funds and from the state budget for 2014 - 2020", implemented by MRDPA with financing from the Operational Program for Technical Assistance (OPTA).
10
According to Art. 30 paragraph (3), a) of Law no. 292/2011, "social services are classified into social
and accommodation services provided for fixed or indefinite period in: residential centers, protected
housing, homeless (overnight) shelters, etc." Accommodation in such institutions is accompanied by
other social services such as personal care, integration/ reintegration, etc. Institutions characteristics
differ from case to case depending on the type of beneficiary they address.
From the perspective outlined above, it is the Romanian authorities’ understanding nowadays that,
under the current legal framework, social housing is not included in the category of social services
since making available of adequate living spaces to disadvantaged populations, without such services
being accompanied by other social services provided to those individuals, in those premises, by certain
specialists, cannot be considered a social service. However, the current social services framework – as
defined by the Law no. 292 and connected legislation – allows room for the inclusion of social housing
into the broader category of social services, to ensure their more integrated approach.
Box 1. The Romanian social services system
The Romanian social services system is regulated and defined by Law no. 292 of 2011 on social
assistance (Chapter III „The Social Services System”, Section 1 „Social Services Definition and
classification”). According to the law, the system of social services refers to activities designed to
address social and special needs, at the individual, family or group level, in order to enable
overcoming of difficult situations, prevent and combat the risk of social exclusion, promote social
inclusion and contribute to the improvement of quality of life. Therefore, social services are
considered of general interest. They are organized in different flows and structures, according to
the specific activity/ activities conducted and the particular needs addressed for each category of
beneficiaries.
Social services require a proactive and integrated approach of the needs of beneficiaries in relation
to their socio-economic, health, education and social environment. Starting from the needs of each
individual, social services may be designed to have larger addressability, targeting groups or
communities. In order to achieve consistent, uniform and effective social actions, that benefit
individuals, social services need be organized and offered in an integrated manner, along with
employment, health, education and other social services of general interest, respectively.
Social services can be classified based on various criteria, namely: purpose, categories of recipients,
regime of assistance, place of delivery, legal regime of social services providers, access
requirements.
According to their goal, social services can be classified as: assistance and support services
intended to ensure the basic needs of the individual, personal care, recovery/ rehabilitation,
insertion/ social reinsertion services etc.
According to the categories of beneficiaries, social services can be classified as social services
for children and/ or families, people with disabilities, elderly, victims of domestic violence,
homelessness, individuals with various addictions (alcohol, drugs, other toxic substances,
internet, gaming, etc.), trafficking victims, detainees, persons subject to an educational or non-
custodial under probation services, persons with mental disorders, people in isolated
communities, long term unemployed individuals, as well as support services for beneficiaries’
caregivers.
According to their regime of assistance, social services are classified into services with
accommodation and without accommodation. Social services with accommodation are
delivered for fixed or indefinite terms in residential settings, protected housing, homeless
11
shelters etc. Services without accommodation are delivered in day care centers and / or home
care facilities, social canteens, mobile food delivery assistance, social ambulance etc.
According to their place of delivery, social services can be delivered: at the beneficiary's home,
in day or residential centers, at the domicile of the person providing the service or in the
community.
According to the legal regime of providers, social services can be organized in public or private
structures.
According to their access requirements, social services are delivered under either standard or
special regime. Standard services are delivered under a regular regime of access, contracting
and documentation. Other social services are provided under a special regime but ensuring
extensive eligibility and accessibility such as preventive measures under reduced bureaucracy
or social services that can be accessed by recipients provided their anonymity is observed (drug
or alcohol addicts, sex workers, victims of domestic violence etc.). Given their specificity, such
special regime services can be provided without concluding any contracts with the
beneficiaries. The third category includes services provided under special regimes, governed by
special laws.
Additionally, it is considered that although the legal frameworks on housing and social inclusion are
complementary, and do not pose major matching problems, in practice there are gaps in the
implementation of specific policies and programs.
Dwellings
In accordance with the legislation in force, the establishment of the social housing stock is performed by means of new constructions and rehabilitation of existing buildings. Social dwellings can be located only on the land belonging to local administrative units and the law forbids their sale. They are allocated by the local territorial and local administrative authorities that manage them, based on the criteria established by the aforementioned on an annual basis, in accordance with the legal provisions.
The local councils control and are responsible for the social dwellings stock located on the territory they administer.
The social dwellings are financed from the local budgets, within the limits of the annually approved
budgetary provisions of the local councils, for which purpose a distinct sub-division of expenses is
established within these budgets.
In addition to the local contributions, the state supports the construction of social dwellings by means
of transfers from the state budget, established on an annual basis to this regard within the budget of
the Ministry of Public Works and Spatial Planning,7 by means of the yearly state budget law.
At the same time, in accordance with the legal provisions in force, the individuals and economic
operators can support the construction of social dwellings by means of donations or contributions.
Beneficiaries
Law 114/ 1996, on housing, with subsequent amendments, identifies the categories of potential
beneficiaries of social housing. Several conditions need to be simultaneously met by potential
7 The Ministry was named as such at the time of the adoption of Law 114. MRDPA is its successor.
12
beneficiaries. First, the per capita income of potential beneficiaries needs to be below a certain
threshold. Second, potential beneficiaries need to meet the necessary conditions that allow their
inclusion in the predefined and rather limited categories mentioned in the law. Third, potential
beneficiaries of social housing must not: i) own a housing unit, ii) have sold a housing unit after 1990
and iii) be tenant in another housing unit belonging to the state stock.
According to the current legal provisions, families or individuals with a net monthly income per person
in the last 12 months below the monthly net average earning per economy8, are entitled to rent social
housing. Net monthly household income is determined based on the income statements and other
proving documents. The lease agreement is concluded between the beneficiaries established by the
local council and the mayor or other authorized person, for a period of 5 years. The lease agreement
may be extended based on beneficiaries’ statement of income and other required supporting
documents. As per the law, the rent the beneficiaries are required to pay should not exceed 10% of
their family monthly net income, calculated for the last 12 months. The difference up to the nominal
rent is to be subsidized by the local budget.
Social housing can currently be allocated by local authorities, based on their annually established set
of criteria, to one or more of the following nine categories of potential beneficiaries:
1. Individuals and families evacuated or to be evacuated from housing units returned to their
former owners
2. Youth, aged up to 35
3. Youth from social protection institutions and who have reached the age of 18
4. Individuals with first and second degree of disability
5. Disabled individuals
6. Pensioners
7. War veterans and widows
8. Beneficiaries of Law no. 341/20049
9. Beneficiaries of the provisions of Decree-Law no. 118/199010
The Housing Law also mentions that “other individuals or families whose economic situation does not
allow them access to housing ownership or rental under market conditions, in compliance with the
provisions regarding subsidizing the rent” have access to social housing, without being more precise
on the categories.
The categories of beneficiaries, however, must be harmonized in an integrated approach to managing
public housing stock and delivering other complementary social protection services and/ or benefits,
starting from the current and formally assumed definition of vulnerable groups in the national social
security system.
Annex 1 presents a detailed description of beneficiaries by programs adopted by the Government of
Romania up-to-date.
8 As announced by the National Institute of Statistics in the latest statistical bulletin prior to the moments of review of the social housing request and social housing allotment.
9 On gratitude to the heroes, martyrs and fighters who contributed to the Romanian Revolution of December 1989, and to people who have sacrificed their lives or suffered from anti-working-class uprising in Brasov in November 1987, as amended and supplemented
10 On rights to persons persecuted for political reasons by the dictatorship after 6 March 1945, as well as those deported abroad or prisoners
13
2.1.3. Strategies on social housing
Romania has adopted or is about to complete various national sector strategies relevant for housing.
These strategies are promoted by various governmental bodies and include:
National Strategy on Social Inclusion and Poverty Reduction (2014-2020), recently
approved (May, 27, 2015);
Inclusion Strategy of Romanian Citizens Belonging to Roma Minority for the period 2015-
2020 (GD 18/2015);
National Strategy on Social inclusion of Young People Leaving the Child Protection System
(GD 669/2006);
National Youth Strategy 2015-2020 (GD 24/2015);
National Strategy on Social Inclusion of Persons with Disabilities 2014-2020 (submitted for
GD approval);
Territorial Development Strategy of Romania in 2035 (in public consultation, prior to
approval);
National Strategy on Housing, which will be prepared by MDRPA.
All of the above mentioned strategic documents include several direct measures related to social
housing issues or measures with indirect impact. The key challenge is to translate the strategic
objectives and ways of action in integrated activities to be implemented in a coordinated manner,
based on a functionally legal, institutional and operational framework.
2.1.4. Stakeholders in the housing sector
The complexity of legal framework has also led to an equally complex distribution of roles and
obligations of the various public authorities, which are now in need of better coordination. The main
relevant institutional actors in this field are:
Institutional actors
The central level: Ministries
MRDPA has the responsibility to develop and implement strategies, policies and programs in the fields
of urban and regional planning, housing, infrastructure and local development. Ministry of Labour,
Family, Social Protection and Elderly (MLFSPE), both directly and through regional structures,
establishes and implements social assistance policies targeted at vulnerable groups, including creation
of social emergency centers.11 Although there is one set of integrated national goals in the field, the
approach of the above-mentioned authorities to vulnerable groups is different. MRDPA manages
investment programs, according to the legal responsibilities mandated by GD 1/201312. Part of such
investments contribute to improving the living conditions of economic marginalized groups,13 while
MLFSPE manages social welfare programs for vulnerable groups (mainly transfer payments).
The two ministries have complementary responsibilities and act within poorly integrated specific legal
frameworks. In several areas of legislation and action the two institutions need to improve mutual
11 See GD no. 197/2006 – Annex no. 7
12 According to art. 2 and 4 GD 1/2013.
13 According to art. 2 GD 1/2013.
14
coordination in order to grant housing rights (according to Law no. 116/2002 on preventing and
combating social exclusion, whose implementation is coordinated by the MLFSPE), and to ensure free
and unhindered access to housing as a right of every citizen (as per the Housing Law no. 114/1996,
whose implementation is coordinated by MRDPA).
Development and implementation of social housing programs or programs for disadvantaged areas
should be subject to concerted action and investment. However, an analysis of the programs carried
out so far displayed limited coordination of the two authorities in this regard.
The consequences of this aspect are reflected, for example, in the approach to Roma marginalization.
MLFSPE underlines the priority interventions and support measures for the integration of Roma
communities by initiating and coordinating the implementation of the Governmental Strategy for the
inclusion of Romanian citizens belonging to the Roma minority.
In parallel, MRDPA initiated in 2008 a pilot program titled "Social housing for Roma communities"
which has so far not resulted in completed housing, partly due to insufficient budgetary allocations.
Additionally, improving the living conditions of Roma communities by means of increasing their access
to infrastructure (water, sewer, and roads) cannot be currently ensured for informal settlements.14 In
order to be able to develop such investment projects, MRDPA should first create an appropriate legal
and technical framework, within which these areas (i.e. informal settlements) could be identified,
assessed, documented and connected to utilities.
In respect to social housing, the two authorities have distinct responsibilities and approaches.
Strategic documents initiated by the Ministry of Labour underline the importance of social housing to
improve living conditions and social integration of vulnerable groups. The National Youth Strategy for
2015-2020 and the National Strategy on Social Inclusion and Poverty Reduction (2014-2020) include
specific sections on the design of new programs of social housing construction or development.
Specifically, the above mentioned strategic documents offer guidelines for the legal provisions
necessary to ensure access to affordable housing for disadvantaged groups and to meet the goal of
developing a social housing stock to cover 20% of the needs by 2020. By promoting these strategies,
the government aims to design social housing development programs. The programs should focus in
scope also on the homeless and other persons who cannot afford a dwelling.
Also, increasing access to housing is essential to meeting one of the objectives of the Europe 2020
Strategy, namely to reduce the number of people at risk of poverty or social exclusion. There are
various vulnerable groups who face extreme poverty, such as the homeless and people living in illegal
settlements or makeshift of inadequate dwellings and which are not sufficiently covered by existing
housing assistance programs.
According to the National Strategy on Social Inclusion and Poverty Reduction (2014-2020), the
government aims to assess the social housing needs of vulnerable groups and to establish a national
strategic framework specifically targeting housing policy and involving inter-sector coordination and
cooperation between central and local authorities. However, until now, government commitments to
have social housing built by MRDPA were limited, as proven by the low budgetary allocations. In 2011,
social housing programs in Romania were allocated 2.66 PPS per capita, while the average in the EU-
28 was above 145 PPS (according to Eurostat).
14 Each investment project financed by public funds has to be justified by the number of households which are expected to benefit from that investment. Informal settlements are not reflected in official statistics in terms of number of dwelling units, thus in such instances the request for funds cannot technically be formulated.
15
Other ministries and institutions in the Romanian administration are relevant for social housing issues:
The Ministry of Public Finance, and in particular the minister delegate for budget and MRDPA
are responsible for issues in the field of budget structure and allocations, taxation.
The Ministry of Justice is active on the issues of enforced evacuations and on the approval of
normative acts;
The Ministry of Health is a relevant actor as regards matters of public health and unhealthy
housing conditions.
County councils
County councils have responsibilities in the field of housing, namely:
Funding and management of protected housing and assisted housing;
Providing access to housing for persons aged up to 35 who cannot afford to buy housing on
the market.
The Departments of Social Services and Child Protection are responsible for managing these actions,
in addition to develop and implement the strategies for social services at the county level.
County councils are mandated by Law 116/2002 on preventing and combating social exclusion, to
support access to housing for young people aged up to 35 who cannot purchase a home at the market
prices. The law allows the county councils to fully cover the advance for the acquisition or construction
of a dwelling, and, alternatively the rent for a period of up to three years. Based on existing guidelines,
the amount of the advance to be covered by this instrument should be established at the beginning
of each fiscal year by the County Council (or the General Council of Bucharest). The figures can be
adjusted periodically depending on the trends in consumer and housing prices.
According to current legal provisions, the budgets for such investments may be covered by a quota of
the amounts redistributed to the County Councils from the central budget, a share of the of county
councils own revenues from local taxes imposed on people who own but do not dwell or lease
dwellings, as well as from donations, sponsorships and other sources allowed under the law.
The provisions of this law, however, are in stark contradiction with other housing policy principles and
relevant legislation that encourage eligible persons (i.e. persons that have limited resources) to buy
or build housing units. In other words, low-income beneficiaries that cannot buy a home on the open
market are addressed by policies and programs that require from beneficiaries significant financial
contributions.
As regards the annual tax set by law for the possession of vacant housing, there are some limitations.
First, the provision can be interpreted as discriminatory because it only applies to natural persons and
not to legal persons. On the other hand, it is unclear whether and how it would be possible to actually
implement it in the absence of enabling legal and financial mechanisms. Indeed, according to the Tax
Code (art. 252), individuals who have two or more housing units are required to pay a tax of 65% for
the first building, excluding main residence, a tax of 150% for the second building and a tax of 300 %
for the third building or any additional buildings. However, there is no clear financial mechanism to
ensure that collected tax is to be allocated by the local authorities to investments in housing, in
accordance with the obligations under the Law no. 116/2002.
16
In this regard several legal and budgetary aspects need to be clarified, taking into account that housing
support for disadvantaged people is economic justified and considered a priority in all national
strategies.
Local councils
According to Law no. 114/1996, local councils control and are responsible for the social housing stock
in the territory of their administrative-territorial units. Local councils have shared responsibilities in
respect of housing for poor and vulnerable groups. Housing programs are implemented in partnership
with MRDPA, while cooperation with county councils is needed in respect of assisted and protected
housing for young or homeless people. Concerning the policy actions towards youth, the legal
framework governing the relationship between the ministry and local councils is clear, nevertheless
the actions to be taken towards improving the situation for homeless individuals require further
analysis and clarification, but it is not sufficiently clarified with respect to responsibilities towards
homeless individuals.
Public utilities companies at the local level, in many cases being autonomous in relationship with local
authorities, have also relevance when it comes to implementation of social housing programs.
2.1.5. Other stakeholders
A number of other stakeholders, external to public administration area, are relevant when designing
and implementing social housing legislation, programs and benefits. Among them, the following
stakeholders can be mentioned:
1. Private players in the field of housing construction and related activities:
Commercial companies whose scope of business is the design/execution of construction
works including urban public works;
Real estate developers;
Various independent experts, regulated in different laws: project review specialists;
technical experts licensed by MRDPA; technical experts licensed by the Ministry of
Culture; geo-technicians; licensed energy auditors;
Manufacturers and providers of construction products;
Banks involved in financing projects related to housing or social housing.
2. Non-governmental organizations:
Organizations representing, defending, promoting the interests of the various categories
of beneficiaries;
Local, national or international organizations defending or promoting objectives in the
domains of housing or social housing (e.g. Habitat for Humanity);
Professional organizations acting in a related field, grouping architects, urban planners,
entrepreneurs, engineers (UAR, RUR, APUR, ARACO, AGIR, OAR, AII, OPSEC, ANEVAR).
17
3. Academic and other specialized research institutes:
National Institute for Research - Development in Construction, Urbanism and Sustainable
Territorial Development “URBAN - INCERC”;
University of Bucharest – School of Sociology and Social Assistance;
Romanian Academy - Institute for Life Quality Research;
Romanian Centre for Economic Modelling
Technical University of Civil Engineering of Bucharest;
“Gheorghe Asachi” Technical University of Iasi, Technical University of Cluj-Napoca,
Polytechnic University of Timisoara, and others.
“Ion Mincu” University of Architecture and Urbanism.
4. Unrepresented stakeholders that are in fact potential beneficiaries
Individuals and families that meet the conditions to benefit of social housing under the current legal
framework may not be organized in or represented by associations to defend their rights in interaction
with public authorities; in such cases methods of communication, consultation and involvement of
these categories should be identified in order to prevent them to remain an amorphous mass, at best
a passive recipient of social assistance.
2.1.6. What are the underlying drivers of the problem?
Discussions with stakeholders (see Section 5 below) have highlighted a number of dysfunctions, most
of them on the topic of people in poverty.
Among them, the following problems might be highlighted:
Insufficient housing stock when compared to the number of requests. As reported by local authorities and organizations that support people who need it in order to access housing, the number of individuals who need social housing is much higher than the number of available housing units. However, requests from local authorities for funds provided by MRDPA are often lower (in term of added sums) than the allocated funds through the state budget law. The explanation might be partially found in other below listed problems.
Local authorities lack adequate, evidence-based policies. This holds notably in the field of construction, renovation, rehabilitation of housing relative to the needs of different categories of beneficiaries, where little real statistical data/information is available and authorities rather react to solve acute crisis situations.
The responsibilities of the various structures charged with issues pivoting around social housing (including construction, management and social services) are not explicitly correlated. At the local level there are instances where some degree of coordination is present. However, such instances do not reflect the existence of specific legal requirements but rather the understanding of the importance of coordination processes at the individual level. Such cases and the politicians and professionals involved can be extremely relevant for problem solving and good practices dissemination.
18
Information on the stock of social housing is not sufficiently transparent. According to the ideas expressed during the meeting with the stakeholders, the lack of transparency is due to “fear of abuse”; there might occur abusively “invasions” of dwellings or there might be the case of such housing units becoming the target of criminal groups interested in restitution.
In the capital city of Bucharest, there are unclear responsibilities between the Bucharest City Hall and sector City Halls. According to an input collected in the consultation phase for this RIA: "it is difficult to know where to file the case [to access/benefit of social housing, particularly for those evicted or in deep poverty]. Main city hall office sends us, we send applications/cases to it, from the sector city hall. And so we walk dossier from each other."
The lack of clear and complete information on administrative procedures, in particular regarding the steps that need to be taken in order to obtain social housing and the institutions that must appealed.
Inadequate information available to all beneficiaries, given that most of the information is posted on the official websites of municipalities. Given that persons affected by these decisions include evacuees with low internet access the only way such beneficiaries can get relevant information is directly from the public authorities (whether the Directorates General for Social Assistance and Child Protection, or via notice boards of institutions), and they might not be even aware of this, given the limited pro-active approach of some authorities.
According to non-governmental organizations, one of the recurring problems is the lack of possibility to defend people to be evacuated. According to them, there were cases where restitution was not made on the basis of complete files or was made on the basis of false documents (in this respect there are processes on the illegality of restitution of property). In many cases, evacuees do not have the resources to address the issue in the relevant court in order to defend their rights and do not have the qualifications necessary to assess legality of the documents based on which an evacuation is carried.15
Lack of human resources – particularly at local level, and quasi-absent in small towns and in rural administrative units - necessary to manage the processes of planning and implementing programs of construction and/or rehabilitation of social housing at the local level.
Difficulties in managing the housing stock publicly owned – upgrading, maintenance, repairing, servicing with utilities; in case of old stock of social dwellings the costs might prove higher than the budgetary possibilities, and for recent investments these further maintenance/servicing costs are under-estimated or not thought about at all, leading to un-manageable situations (even medium size cities asked after several years to be allowed “to sell” the social housing stock, in order to “get rid of the problem”)
Inadequate financing structure at the local level. The National Strategy on Social Inclusion and Poverty Reduction (2014-2020) states that social housing in Romania is financed primarily from municipal budgets, with limited additional funds, from the state budget, which are provided occasionally. Local authorities have an interest to expand the existing stock of social housing in response to the increase of local demand but lack necessary financial, land and/ or vacant buildings resources. Also, administration and financial management of social housing poses significant challenges: for example, because of unpaid utility bills by some tenants, in the absence of individual meters, the entire building may be disconnected from the utility grid. Evictions are common when arrears are present.
15 The situations are complicated and often suspicion of corruption arises, when restitution claims are “sold” to intermediaries; in many cases both the former owners claiming for restitution and the occupants (more or less legally) are in fact “losers” in the process.
19
Limited capacity in local authorities to develop and manage social and protected/ assisted housing for vulnerable groups in an efficient and socially responsible manner, in the absence of adequate legal and financial support mechanisms (see details above).
The legal framework does no longer allow local authorities to purchase housing units on the open market, which could, in some cases, offer the chance of a quick response to the needs of poor people, as construction is a lengthy and costly process.
The lack of mechanisms allowing NGOs to put pressure for housing interventions in crisis situations (the “habitat for humanity” types or others); in the good circumstances, the partnership limits to streamlined paper processing and less often to land allocation, usually not in serviced areas.
The legal framework is insufficient in relation to the issue of forced eviction of vulnerable categories. The protection of such categories in relation to possession is not covered. For example, individuals and families belonging to Roma minority do not usually have real estate property rights and dwell informal settlements. Such cases have been tolerated for decades by the local authorities but this group is vulnerable to any action of the authorities that might intend their relocation.
Insufficient legal provisions related to building shelters and other housing categories of social assistance as provided by specific legislation.
Difficulties in management of social housing stock/ public property housing, due to tenants’ lack of adequate resources to bear the maintenance costs.
Table 2. Rate of debt of social dwellings at the level of the city 16
Source: MDRPA
80 Almost two thirds of the cities reported that they register outstanding debts for utilities and rent related to social dwellings – Analysis developed by MRDPA and the World Bank, Study on Social dwellings developed in the September – November 2014 period.
9
9
5
16
23
4
12
18
15
7
0
4
2
17
16
28
11
5
22
10
21
18
20
41
24
10
27
21
23
20
17
24
17
20
82
57
76
58
59
64
44
47
65
66
74
69
73
57
56
39
63
5
13
10
5
0
12
3
10
10
5
4
4
9
4
17
6
0% 20% 40% 60% 80% 100%
N-E
S-E
S-Muntenia
S-W
W
N-W
Center
1.6-9.9K
10-19.9K
20-49.9K
50+K
Q1 - The smallest rates of poverty
Q2
Q3
Q4
Q5 - The highest rates of poverty
All cities with social housing
De
velo
pm
en
t R
eg
ion
Po
pu
lati
on
Siz
e
(20
11
ce
nsu
s)
Inco
me
po
vert
y ra
tes
(AR
OP
)T
OT
AL
Zero debts
Debts to rent, non-responseregarding util ities
Debts to rent and util ities
Non-response
% of Cities with
social housing with:
20
The housing stock and housing costs
The main and synthetically defined key driver of the problem is the mismatch between demand and
supply of social housing in Romania. The massive privatization of the housing stock after the fall of
communism has put Romania confronted with various challenges. On the one hand, Romania has one
of the highest home ownership rates in Europe.
An entrenched culture of home ownership even among young segments of the population, a less
robust rental market,17 and unfavorable banking terms explain and help perpetuate the high degree
of ownership in Romania where 96.6% of citizens own property compared with 70.7% in the EU-27
countries.18 State property accounts for only 1.13% (2.1% in municipalities and cities and 0.7% in
communes) of the total stock.19
On the other hand, the housing costs are more and more a burden for lower-income households, both
for those owning a house (because of relatively high level of utilities costs, compared to income), and
even worse for those who have to additionally pay a rent (even if this a subsidized one, in the case of
what the Housing Law no. 114/1996 defines as social housing). For example, for the poorest households
(the first “decile” of income), the cost of utilities only (without taking into consideration the rent or “Prima
Casa” mortgage, when the case applies) is 43.7 % of the monthly income.20
In terms of the stock for social housing, 25% of the social housing units within apartment
buildings/condominiums were erected before 1977, while 84% of the social housing units within
individual buildings were erected before 1977. Figure 1 shows the age of total social housing units,
with 42% built before 1977. Given that the normal lifecycle of a building is, in average, 50 years, it can
be concluded that these buildings require urgent rehabilitation/ strengthening works, in order to be
brought to the current technical standards and extend the normal lifecycle thereof. The advanced
degree of degradation of the buildings is, however, a constant feature for most of the housing stock
nationwide, including that in private property.
Figure 1. Total social housing by year of construction
Source: MDRPA
17 According to a recent World Bank housing assessment, “little data is available to gauge the size of the rental market in Romania, but unofficial figures suggest that it could be 15-20% of the housing stock in Bucharest and other major cities, and it is largely informal - without any official or enforceable contracts. This may be partially attributable to pro-tenant rental laws, and a high VAT (24%) and income tax on rental income. The very limited supply of ‘formal’ rental housing has high rents, making it beyond the reach of most middle and low income households. The absence of a robust rental market of course restricts labour mobility; in the case of Romania, it is also unintentionally sharply increasing the demand to purchase (rather than rent), thereby further exacerbating the owner-renter imbalance. World Bank (2015), Housing in Romania – Towards a National Housing Strategy, Final Report, August 18 National Institute of Statistics and Eurostat, quoted by CBRE, Bucharest Area Residential MarketView, H1 2013. 19 National Institute of Statistics, 2014. 20 Housing Budget Survey, INS, in “Raportul Contributii la strategia in domeniul locuintelor”, november 2014, p. 118
21
Regarding the discrepancy between demand and offer of social housing, Figure 2 shows that the
necessary amount of social housing is more than two times higher than the offer. It should be
considered that the existing social housing is already occupied, while the demand emphasized in the
chart represents the required number of housing units in addition to the existing stock. It should also
be mentioned that the data on demanding represents only the registered applications for social
housing units and not the overall number of those in need, which cannot be known and which, in
order to be estimated, requires the statistical data to be interpreted.
Figure 2. Demand and supply of social housing (in urban settlements)
Source: MDRPA
The second aspect of this Figure 2 refers to the ratio between the number of housing units in demand
– in fact registered applications – at the level of local governments (LPA, authorities of local public
administration) and the number of housing received/brought into service financed by implementation
of existing MRDPA programs. As it results from the above data, the two programs for construction of
social housing carried out by MRDPA only partially satisfy the LPA needs. It is possible that some LPAs
are not aware of/ do not deem as priority the need for social housing, and as a consequence the data
aggregated at MRDPA level is under the actual need for social housing at national level.21
2.1.7. Why government intervention is required?
The legislation framework (centered around the Housing Law No. 114/1996, but with its numerous
modifications) needs further updates and should provide for balanced solutions to the social housing
problem, as appreciated by most of the stakeholders consulted for this Report. Most of the programs
initiated have had limited impact yet, as the overwhelming majority of local authorities have decided
not to apply for governmental funds, or/and have been unable, financially and/or institutionally, to
develop and implement projects in the area of social housing.
21 As stated, including in the stakeholders meetings, but also in literature, the social housing stock is perceived by many local authorities as “loss-making”, because of difficulties to build and to manage it, and costs generated by bad-payers of rent and utilities costs.
22
The transfer of responsibilities to local authorities meant in fact, in most cases, transfer of difficulties:
to distribute the publicly owned housing stock, to manage it, to collect the rent and utilities costs. Part
of the housing stock locally owned is formed by previous bachelors’ hostels and/or building sites
barracks, in poor state and with inadequate level of sanitation, demanding investments difficultly
affordable for local budgets, especially in small towns and rural areas. In many cases, consistent areas
in towns or cities decayed and became poverty pockets and subject to various types of segregations.
Given the above-described situation, the framing problem might be defined as follows:
In the context of social polarization and imbalances between various local public budgets, given the
size, structure and state of the housing stock, in general, and of social housing stock particularly,
the gap between needs and supply of social housing is increasing, with various groups being to a
high degree un-addressed (the extreme poor, for example), with housing stock in decay and with
the need to further develop national public policy concerning social housing.
The lack of information and therefore lack of adequate reaction of central and local governments in
relation to the size and diversity of the needs; the quasi-total lack of regional/local policies, the dire
economic situation of many settlements, particularly small towns and a legal framework that needs
to be updated, are all contributing to the widening of social housing problem.
A National Public Policy on Social Housing appears thus as an absolute priority. The lack of this policy
is contributing to a number of situations, such as incoherence in actions, and arbitrarily designed
and/or partially implemented programs and projects, inefficient allocation or lose of public funds,
distrust between authorities at various levels, reluctance to partnerships of any kind and thus
ultimately increasing already high levels in poverty. In the framework of the likely future adoption of
a National Housing Strategy, having a clear national public policy on social housing will help identifying
priorities, targeting specific groups, allocating resources adequately and better coordinating among
institutional actors.
In order to effectively contribute to the overarching goal of the proposed National Housing Strategy –
to make adequate housing accessible to all income groups by 2030 – all actions in the field of social
housing – articulated in programs or projects - should be based on a National Public Policy on Social
Housing, better incorporating the social realities in the country into the social housing approach.
This policy has to be correctly substantiated based on accurate data and knowledge of processes of
change, adequately reflecting the differences between social groups’ needs but also between various
local contexts – economic, social or spatial/regional. Articulating the relevant provisions of the
National Housing Strategy (in the making) and of the National Strategy on Social Inclusion and Poverty
Reduction (recently approved), the policy on social housing has to integrate and assure coherence of
relevant provisions of other strategic documents approved by the Government of Romania22.
In order to be successful in its implementation, a National Public Policy on Social Housing must be
implemented based on and with the help of a coherent, reliable and instrumental legislation covering
two aspects in a balanced and integrated package:
22 Strategy concerning social inclusion of roma minority people, 2015-2020 (recently approved), National strategy concerning social inclusion of youth leaving the child-protection system (2006), National Strategy for youth 2015-2020 (2015), National strategy concerning social inclusion of persons with disabilities, 2014-2020, Strategy concerning spatial development of Romania (2015).
23
Framework provisions, such as the definition of responsibilities and roles of various
“actors” and of public authorities at all levels, as well as principles like partnerships or
community participation; and,
Operational provisions, such as financing mechanisms, fiscal and other instruments,
specific priorities, criteria, etc.
Based on this clear and comprehensive legal framework, the responsible institutions, at both central
and local level, will develop and implement specific programs and/or projects, answering the needs
of specific target groups, or addressing specific situations in certain areas, and thus adapted to both
local conditions and to particularly established priorities.23
As proven already, the statement of a policy and adoption of a legal framework are not enough and
that is why another priority consists in building an inter-institutional framework, both at central and
local level, operational in implementation of the policy and legal provisions, and capable to undertake
and manage particular situations, to design, articulate and implement programs and projects adapted
to local/regional context.
Within the context of decentralization, the creation of an appropriate institutional framework and the
definition of a mechanism of any kind (legal, fiscal, financial, participatory) become relevant only if
the managerial and technical capacity is built at county and local level (and for some subjects/types
of actions, at central level too). This should be done in such a way that local authorities will be ready
not only to better use the opportunities generated by EU, national or other types of programs, but
also to be more responsive and creative in addressing local problems in the area of social housing, as
part of regional and urban development planning and management.
A critical area is information sharing and information quality (structured and up to date) both within
central authorities, between various levels of public administration and among local authorities. The
setting up of mechanisms and practices regarding dialogue and information sharing will, on one
hand, assure knowledge and transparence concerning the decisions and actions carried on and, on
the other hand, it will provide chances for quicker reactions and interventions/programs/projects
better suited to the recipients in need (many of which, affected by extreme poverty or other
vulnerabilities, are more or less noticeable or even marginalized).
2.1.8. Who is affected, in what ways, and to what extent?
Social housing beneficiaries
The main eligible or potential categories of beneficiaries of social housing, as identified in the Housing
Law, are described in section 2.1.2 of this Substantiation Note. They include individuals and families
evacuated or to be evacuated from housing units returned to their former owners; youth, aged up to
35; youth from social protection institutions and who have reached the age of 18; disabled individuals
with first and second degree of invalidity; disabled individuals; pensioners; war veterans and widows;
beneficiaries of Law no. 341/2004 and; beneficiaries of the provisions of Decree-Law no. 118/1990.
23 The policy establishes the priorities and ways of action, the legal framework defines the responsibilities and mechanisms/instruments, and the programs and projects are the operational plans adapted to local/specific conditions and priorities. Some confusion between the law’s and programs’ role and content is still present, including in the content of Law 114 (Knowledge Exchange Workshop, MDRPA/World Bank, July 24, 2015, Bucharest).
24
However, the main vulnerable groups in Romania, as identified by the National Strategy on Social
Inclusion and Poverty Reduction (2014-2020), are far more diverse and include:
1. Poor persons, under the following sub-groups: poor children, especially those living in
families with many children or single-parent households; employed poor, especially low
skilled workers (mainly in rural areas); self-employed persons in agriculture or other fields;
youth and people who are unemployed and are not participating in any form of education
or training (NEETs); persons aged between 50 and 64 years who are not employed and
excluded from social assistance programs.
2. Children and youth lacking parental care and support, under the following sub-groups:
children abandoned in health facilities; children living in large or poor-quality orphanages;
youth leaving residential care; children and youth living on the streets; children whose
parents are working abroad, especially those with both parents abroad and those
experiencing long-term separation from their parents; children deprived of their liberty;
and teenage mothers.
3. Single or dependent elderly persons: elderly people living alone and/or in complex needs
of dependency.
4. Roma: Roma children and adults at risk of exclusion from families that lack sustainable
income.24
5. Other vulnerable groups may include: drug addicts; ex-convicts or individuals under
judicial control; homeless people; victims of domestic violence; victims of human
trafficking; refugees and immigrants.
Some of the above mentioned categories of individuals or families may further be negatively impacted
by their belonging to marginalized communities: poor rural communities; marginalized urban
communities; poor and marginalized Roma communities.
The vulnerable groups mentioned in the National Strategy on Social Inclusion and Poverty Reduction
are inconsistently targeted by existing initiatives on social housing and the problem should be
addressed. Additional potential social housing beneficiaries, should more specifically include under
the vulnerable groups category the individuals and households whose dwellings are located in areas
affected/ potentially affected by natural calamities, in actual/ potential need for urgent relocation
(areas under higher than average seismic risks or at risk of earth slides – e.g.: Ocnele Mari; floodable
areas, situated along major river banks).
24 The majority of Romanian Roma lives in segregated communities. The RRS found that 56% of Roma households live in settlements where the dominant ethnicity is Roma, indicating a high level of spatial segregation. Spatial segregation is highly correlated with lower health status, early school-leaving, low labour market attachment, and costly access to other services (public transport, health facilities, etc.). About half (51%) of Roma households living in segregated communities live in dilapidated houses or slum conditions. A significant proportion of Roma live in poor-quality houses with inadequate infrastructure, overcrowding, and lack of tenure security. Housing conditions for Roma households are consistently worse than for non-Roma households: the RRS finds that 30% of Roma households live in a dilapidated house or slum, compared to 4% of non-Roma households living nearby. Only about half of the Roma households in urban areas have access to housing of relatively good quality—either newly constructed housing, dwellings made of traditional materials in older settlements, or social housing provided by the local authorities. The remaining 40–45% live in low-quality multi-story blocks or slums, or in temporary camps with poor-quality structures and inadequate infrastructure; only 20% of the neighboring non-Roma live in such poor conditions. In rural areas, about a third of Roma households live in poor-quality housing. World Bank (2014), Achieving Roma Inclusion in Romania – What does it take?, Washington, February.
25
Other potential beneficiaries of social housing25, refer not to vulnerable groups but to individuals and/
or families whose skills may be required at the local level in order to better meet the development
needs of the society or the market:
Professionals in agriculture, education, healthcare, public administration and cults, willing
to establish their domicile in the rural environment, where needed;
Highly specialized professionals to meet niche labour needs (e.g.: Cernavoda Nuclear
Power Plant, Măgurele Research Platform).
Therefore, the main problems of the current legal framework regarding the potential
beneficiaries of social housing can be synthesized as follows and need to be better
addressed:
Eligibility criteria need to be met simultaneously by potential social housing beneficiaries
and this significantly narrows the actual number of social housing beneficiaries;
Although the list of potential beneficiaries has an open end, allowing for other categories
to be added if necessary, neither central or local authorities perceive this as a legal
authorization to add to the list of beneficiaries those that better reflect the existing
situation;
Although the law allows room for the local authorities to establish the priority order of
the categories of beneficiaries provided by the law, which potentially should generate
outcomes better adjusted to local realities, no priority interventions can be aimed at the
national level; furthermore, local authorities may set social housing allotment criteria
difficult to be met by those in need;
Other vulnerable groups, with stringent needs, presented above, as identified in various
national policy actions are not included in the law;
A significant part of population may be and in fact has been affected by cyclical negative
stances of the economy; although not necessarily in need of social housing, they are under
significant risks of becoming in need of social housing; the current law does not provide
for preventive solutions;
Social housing priorities being poorly linked with necessary financial support from public
sources for such initiatives, central and local budgetary constraints further limit social
housing outcomes in territorial profile. The financial impact on national and local budgets
needs to be better grounded.
Central government
Central government would benefit from an updated, comprehensive and consolidated perspective of
the actual size of citizens are confronted to with regard to housing. Spending of public funds on social
housing is negatively impacted by the supply side complex issues that must be addressed by coherent
solutions. The most vulnerable groups are insufficiently targeted and face risks of further worsening
of their economic and social status with future negative impacts on the society and on public spending
for social protection measures.
25 This subgroup is not specifically mentioned in the Law, but indirectly, as the Law establishes the concept of “locuinta de serviciu” – job-related housing.
26
Local governments
In the absence of a clear and sustainable commitment at the national level to financially support social
housing initiatives of the local authorities, the financially worse off local authorities face budgetary
constraints to their active involvement in solving local housing problems.
Construction businesses
Construction companies and those active in related goods and services provision have been negatively
impacted by the decrease of public spending on housing investments.
Society on the whole
A miscalibration of a social housing policy and of adequate and efficient investments for the
development of such projects, if not solving social housing problems, can lead among others to
negative effects correlated with societal dimensions in areas as: health status, crime rate, access to
employment, wellbeing, access to education and community cohesion. Quantification of these
negative effects requires the precise identification of needs in the first place, which the present
Substantiation Note seeks to highlight repeatedly.
2.2. No-action option (baseline scenario)
Social housing is an issue where public intervention is required, as to tackle its social dimension and
problems associated to the lack of dwellings for a number of people, and to possibly reduce levels of
poverty and social exclusion. The imbalances between needs (potential demand) and supply of social
housing are increasing in Romania without the government, at different levels, being able to close
those gaps. Any further delay in addressing these issues might probably create further issues of
concern, and the reversion of those issues would be even more difficult to tackle in an effective
manner if there is no strategic approach that takes into consideration the various relevant elements
that are originating the problem.
Public intervention is therefore needed and the no-action option could only exacerbate the
imbalances described. As identified in the Section on drivers of the problem, the current gaps are
growing over the years, and this tendency is expected to continue in the lack of government
intervention. This means that potentially more demand on social housing could be expected, while
the supply might not be enough to meet the required dwellings requested by different type of social
groups. Without knowing the magnitude of the problem, the financial resources dedicated to social
housing construction, repair and maintenance might not be sufficient. In the absence of clear strategic
view on how to handle this issue, local governments might not have a clear understanding of priorities
and their limited resources (financial, human, technical) might simply not be enough to tackle the
situation.
In relation to the identified problem, the lack of Government intervention (or its very limited targeting
or funds provided) would likely create a greater gap between the required dwellings to meet the
demand side. Data taken from a recent survey conducted between September-November 2014 for a
World Bank housing assessment show the complexity and imbalances between demand and supply
of social housing (Box 2).
27
Box 2. Main findings on survey on social housing stock
A survey for the World Bank housing assessment has revealed interesting facts on the distribution of
social housing as well as challenges of local authorities with respect to social housing. The data,
however, needs to be interpreted with caution in the context of the varying interpretations of ‘social
housing’ on part of the local authorities. There was a notable differentiation in the responses, whereby
in many cases, “social housing” was perceived in the purely legal sense, that is social housing units
built via specifically designated programs and complying with current legal regulations; in other cases,
it was reported by local authorities to include all ‘housing of social character’ (i.e. public housing units
rented to different vulnerable groups). And yet others counted, under the label of social housing,
other types of public housing – such as youth housing, necessity housing etc. – which are legally or
based on source of funds, not really social housing. Among the main findings are:
The reported stock of social housing in the responding municipalities is 29,167 social housing units (in legal terms), and 47,507 units, if also including public housing units with social character.
Less than two thirds of responding municipalities (57%) report having any stock of social housing. There are also significant inter-regional disparities, with a higher proportions of cities with social housing being located in S-E, N-W and Center Regions (62-68%) as compared to the S-Muntenia region (53% of cities).
Less social housing is registered in smaller cities. The share of cities with social housing increases from 39% in very small cities (under 10,000 population) to 49% in small cities (10,000-20,000 population), and 79% in medium cities (20,000-50,000 population). Virtually all respondent cities with 50,000 or more inhabitants report having some social housing stock.
The presence of social housing correlates with the level of development of the respondent cities. The share of cities with social housing increases incrementally from 25% of the least developed ones (the lowest LHDI 2011) to over 86% of the most developed cities. At the same time, only 30% of cities with high rates of poor population benefit from social housing, while the share reaches 81% in cities with low poverty among population. This reflects that social housing stock may be triggered more by implementation capacity (i.e. in more developed cities) rather than severity of need.
A large part of all social housing units (38%) is concentrated in two regions, S-E and Center, whereas small numbers are located in N-E, S-Muntenia, S-W (8%) and especially B-Ilfov (5%). More than half (54%) of existing social housing are situated in cities with 50,000 or more inhabitants. Together, all 134 cities with less than 10,000 inhabitants constitute only 9.2% of all social housing units (2,693 units). Among the small towns, the 51 newly declared ones (between 2002 and 2006) are the most disadvantaged, and comprise only 0.5% of all social housing units (a total of 139 units). In the 65 cities with the highest income poverty in population, there are available only 2% of all social housing units in urban Romania (a total of 592 units).
Social housing registers, generally, full occupation (the total occupancy rate being 96-97%). Beneficiaries of social housing consist mainly low income households: 56-57% are rented to low-income families. However, the other 40% are rented to other target groups.
Some 87% of all local authorities that participated in the aforementioned social housing survey consider that more investment in social housing in necessary in their localities. The large majority offer also an estimation of the need, between 10 and 6,000 units, with an average number of 233 units. However, the average number of units varies widely from around 70 units in very small cities (less than 10,000 population) to almost 150 units in small towns (10,000-20,000 population), 230-250 units in medium-size cities (20,000-50,000 population), and approximately 900 units in large cities (more than 50,000 population).
28
The program of overdue debts is largely confirmed by the survey data. A share of 30% of social housing units are reported to have overdue utility bills. The percentage jumps to 45-48% in cities from the N-E region (poorest in Romania), as well as in the cities with the highest poverty rate, and drops to a low 23% in the Center region. Debts to utilities in social housing are estimated at about EUR 2.8 million.
Source: World Bank (2015), Housing in Romania – Towards a National Housing Strategy, Final Report, August
In addition, those people without a house would potentially be in a more delicate situation regarding
exclusion and poverty. Housing conditions for a large segment of the poor and vulnerable groups are
inadequate under the current circumstances, and government assistance falls far short to tackle the
needs. Romania has the most “severe housing deprivation” in the EU-27 countries. According to a
recent World Bank housing assessment, “the country’s poor and marginalized groups are often
relegated to live in squalid and overcrowded conditions in slums or old ‘blocks-of-flats’ or ill-
maintained social housing units with insecure tenure. These groups mostly lack proof of domicile
and/or identity cards, face discrimination and exclusion, and are often the victims of social, economic,
and physical exclusion. Other vulnerable groups include orphans, disabled, elderly persons, etc. many
of whom do not have the means to access adequate housing without targeted assistance from the
public sector. Housing conditions vary across the different types of poor settlements in urban, peri-
urban, and rural areas. Urban settlements in inner city areas are by far the worst, with extremely poor
quality housing, little or no infrastructure, and high levels of unemployment and poverty.”26
In the lack of sufficient data and information, it is difficult to estimate at this stage the exact impact
of this trend. However, some indicators can show the severity of this issue that potentially could be
exacerbated:27
In 2012, according to the National Strategy on Social Inclusion and Poverty Reduction (2014-2020), Romania is among the top five countries in Europe in terms of housing costs, with 16.5% of the population overburdened by housing costs.28
In the same year, over 41.4% of people at risk of relative poverty faced overcrowding, slightly more than the 38.9% for the same indicator in the EU-27 states.
Over a quarter of the population – and a third of the population living in households with dependent children – had unpaid utility expenses for the previous year; less than 10% of the EU27 average had such debts.
During the same year, 14.5% of Romanians where affected by fuel poverty, which is defined as the inability to afford adequate heating; the same indicator was 10.8% for the EU-27.
This shows that in the absence of government intervention, there is a high risk major social and
housing indicators might worsen. The lack of correlating housing with poverty, vulnerability and social
exclusion, based on relevant indicators, is certainly a factor that might need to be taken into
consideration in any further effort to solve the current gaps. Without doing this, the situation might
turn more complex and solutions even more difficult to implement. Social housing is certainly a cross-
cutting issue that has to be addressed from a government-wide perspective and the current
institutional and legal framework do not seem to be adapted for the challenges ahead.
26 World Bank (2015, 8).
27 World Bank (2015, 110).
28 Eurostat defines the overburden rate for housing costs as 40% of net monthly income.
29
2.3. Objectives
The general objective of government intervention is to reduce the gap between the demand and
the offer of social housing, attending the social groups that are in most need of dwelling and
ensuring that social housing contributes to their social welfare.
In order to achieve this general objective, the following specific objectives have to be kept in mind:
1. Setting clear targets for specific groups, in terms of main types of interventions (new dwellings, access to a better suited dwelling, better state of housing stock, assistance/help for utilities costs, better access to utilities) – following the principle of “coherence and balance in approaching social housing needs”;
2. Formulate and adopt clear legal framework for all types of interventions that might be used, in terms of responsibilities, cooperation mechanisms, co-financing, procedures, standards to be met – following the principle of “clear and coherent legal framework”
3. Achieve continuous coordination with governmental strategies for fields/subjects relevant for social housing – following the principle of “central government concerted approaches” (mainly the social assistance array of strategies, but also with territorial and urban development ones, infrastructure development, education, etc.)
4. Define and build operational [“working”] and clear partnerships among public actors (public administration authorities and institutions) – following the principle of “decentralization valorized by cooperation”
5. Develop effective partnerships with NGO’s and community based organizations, both strategic and on program/project basis – following the principle of “partnering of all stakeholders for better results”
6. Gathering structured knowledge, both on existing situations (mainly in terms of nature and size of social housing targeted groups, housing stock, regional and local disparities, processes of change in demography, social, economy), on developments and results of various programs and projects, and also on good practices (programs and projects) in the country and abroad;
7. Developing and implementing pilot programs and projects of different types in various locations in order to both verify the operationalization of instruments and programs, and also to generate experience that might be shared/valorized in capacity building for the success of the lines of action in the social housing policy.
8. Increase capacity of local authorities to address the problems of social housing, including the capability to formulate local social housing policies (for large cities) or social housing integrated programs;
9. Monitor and evaluate both the situation and implementation of programs and projects, for understanding the impacts and generate further adaptations of the legal base or review of the instruments/portfolio of programs.
Consequently, a number of outputs have to be delivered to ensure that the above-listed objectives
are met. These include:
1. Formulation of a National Public Policy on Social Housing, consistent with and part of the implementation of the Housing Strategy to be adopted.
2. Review of the legal and regulatory framework of social housing, the current Housing Law, to assure the base for implementation of the policy.
3. Definition of short time priority programs.
30
4. Design and implement an articulated system of data collection and usage.
5. Design a set of indicators for monitoring and evaluation of social housing, both at local and national levels.
In accordance with the above-mentioned objectives and outputs, the following steps forward should
be a priority:
1. Preparation and approval of a public policy on social housing to integrate and coordinate aspects of the strategies mentioned above.
2. Replace, review or supplement of the relevant legislation
3. Create an inter-institutional framework and mechanisms at the central and local level responsible for their coordinated implementation, by adequate and specifically targeted programs.
4. Create mechanisms of mutual information between responsible authorities, both for the increase of transparency and for more effective and efficient reactions and solutions for the people in need (some of them being in extreme poverty or vulnerability conditions).
2.4. Formulation of options
In order to address the needs and problems concerning social housing, two options of government
intervention are proposed to be considered for debate and decision, both options centered on a more
coherent approach, with the use and means of public policy.
Both when proposing the options and, later, when implementing the chosen one29, the four steps
recommended by theory30 are to be taken into account: (1) Defining the problem to be addressed in
ways that will make it amendable to action or policy intervention; (2) Modeling and analyzing the
situation for the purpose of intervention with specific policy instruments, institutional innovations, or
methods of social mobilization; (3) Designing one or more potential solutions in the form of policies,
substantive plans of action, institutional innovations, etc., expressed in terms of: futurity, space-
location, resource requirements, implementation procedures and procedures for feedback and
evaluation; (4) Carrying out detailed evaluation of the proposed alternative solutions in terms of their
technical feasibility, cost effectiveness, probable effects on different population groups, political
acceptability, etc.
The first one (preferred option) is more comprehensive and corresponds to a long-term and more
sustainable approach to social housing, while the second one (alternative) refers to possible quick
fixes that might help get some relief on the main current challenges, but might not provide sustainable
solutions in the medium and longer run.
In both cases, some important elements are related to the priority lines of actions mentioned above:
(1) a public policy approach through more coherent use of actions/instruments and balanced and
better focused programs, (2) design/review of currently applicable legal framework.
Both options have positive and negative impacts, which are described in the following Table 3.
29 See the last section, referring to implementation arrangements
30 Friedmann, John (1987), Planning in the Public Domain: from Knowledge to Action, Princeton University Press, 1987
31
Table 3. Advantages and disadvantages of options
Option Advantages Disadvantages
Comprehensive approach
Coherence of approach
Better suitability of legal framework to policy objectives
Better ground in reality
Chances for a more open/participatory process
More time for dialogue, negotiations of choices with all actors
Better suited and articulated programs
More adequate instruments
Less resistance of local authorities and better response and compliance of all stakeholders, in general
Appropriate adaptability built in policy and legal framework
Better [chances for] sustainability
Duration of whole process might be quite long [longer than for second option]
Un-satisfaction of various actors because delayed actions/projects
Risk of too extended ambition
Wishful thinking (from politicians but also from professionals or target groups)
Costs for developing and implementing the processes
Quickly reactive approach
A more timely response by actions
Chances that urgent situations/needs find quick programs addressing them
Lower costs for implementation
Approach prone to repeated and limited in scope legal modifications which is derived from short term political capital gains
Lack of balance among various line of actions/allocations that might be harder to correct; lower efficacy and efficiency of public spending
Less involvement of other actors than central administration
Both options will be described and compared based on a selection of key actions or initiatives that
have to be taken in order to achieve the defined objectives of the government intervention.
The potential impact of those actions or initiatives will then be assessed, in order to identify for which
of them the benefits outweigh the costs.
In order to assess the impact of the policy options usually three methodological steps are required:
identifying the links between social housing and expected outcomes (economic, social etc.) then
quantifying the identified effects and finally assigning them monetary values. There is a fair amount
of literature31 analyzing from a theoretical perspective the link between social housing and economic
and social outcomes. However, care should be taken in not confusing correlation for causation.
Related factors, difficult to control for, usually influence the relation between the two, and a precise
cause and effect relationship between social housing and positive social economic and economic
outcomes cannot be easily stated.
31 See Monk S. et al., What does the literature tell us about the social and economic impact of housing? Report to the Scottish Government Communities Analytical Services, 2010
32
At the individual (micro) level, quantified evidence on the directly attributable impact of social housing
is limited and more or less anecdotal. In Romania’s case, the lack of quantified, attributable, evidence
means that it is not possible to reliably estimate the benefits of public investment in social housing in
terms of outcomes for social tenants, as the available evidence is not robust enough and due
insufficient information on actual needs. In some areas necessary information is insufficient to
quantify any impacts.
At the aggregate level, there is available evidence that indicates that investment in social housing
supports multiple social objectives.
Within the framework of the current exercise, the assessment will be performed in a qualitative
manner, since necessary information and data is lacking. Necessary evidence was obtained through
knowledge of technical staff and external experts, as well as information gathered during the
stakeholders´ meetings and discussions with the MLFSPE (see Section 5).
The methodology used to assess impacts of different nature and on various potentially affected groups
is described below. Tables in the following sections present expected overall net effects of each
measure on the corresponding public administration level, beneficiaries and businesses. Due to the
lack or insufficient data, ratings were associated to each proposed action or intervention in order to
reflect the magnitude and sign of the expected impact. Thus in this Substantiation Note the following
ratings should be interpreted as follows:
“++” or “2” should be interpreted as the measure being expected to generate a high and positive
impact;
“+” or “1” should be interpreted as the measure being expected to generate some positive impact;
“0” should be interpreted as the measure being expected to generate no impact (neutral impact
expected);
“NA” should be interpreted as no assessment of the impacts can be inferred due to either lack of
information or to the measure not being applicable;
“-“ or “-1” should be interpreted as the measure being expected to generate some negative
impact;
“- -“ or “-2” should be interpreted as the measure being expected to generate a high and negative
impact (high negative impact can be expected).
Section 3. Preferred Option
3.1. Description of the option
The first and preferred option consists of a comprehensive and holistic approach for social housing,
which is composed by different processes and initiatives that are highly correlated. Those processes
include the following three elements:
Preparation of a National Public Policy on Social Housing, based mainly on constitutional
provisions and relevant matters regulated by Law on Local Public Administration
(215/2001), Law on Social Assistance (292/2011), in accordance with EU
recommendations and regulations, and also taking into account the National Strategy on
Social Inclusion and Poverty Reduction, which was approved in May 2015. This policy will
also be coherent with the objectives of the National Housing Strategy (in the process of
being formulated and adopted), as the main framework for programs and projects related
33
to social housing. It has to include several elements: more coherent definitions of
concepts and target-groups, references to methods of intervention and types of
instruments, definition of priority programs and mechanisms for capacity building for all
actors (not limited but focusing on public authorities at county/regional and local level);
Review of current legal and regulatory framework on social housing32 as the main legal
basis for implementing the national policy (and regional/local ones). It has to broadly
cover and explain in more detail the key concepts and responsibilities in the field of social
housing; clearly define the planning, financial and operational instruments; establish
procedures and grounding levels and limits for partnership-building; and further technical
regulations;
Implementation of actions to develop accurate knowledge and information on social
housing issues, via studies and evaluation. They have to include analysis of existing census
data, but to refine and (where the case is) to update, and mainly to explore variations and
differences between various situations.
The three processes must not be seen in as sequences; they have to be developed in parallel, with
coordination of various actors and having in mind, for instance, that the law will represent the legal
base for implementation of the policy, but also that both the policy, including its priority setting and
definition of main target groups and/or types of programs, and the procedures or technical regulations
included in the law should be consistently substantiated by accurate data and studies, targets and
results.
In order to solve the identified problem and achieve the objectives set in the previous sections, the
implementation of the three processes requires a number of actions or interventions presented
below. A more detailed qualitative assessment of the costs and benefits of each action or intervention,
by categories of involved actors, is presented in annexes to the various sections related to impacts.
3.1.1. Actions and interventions under the preferred policy option and related costs
and benefits
The current section lists the actions and interventions to be undertaken under the framework of the
preferred policy option addressing the social housing problem. Each measure is briefly assessed in
terms of related costs and benefits. The measures are grouped according to the three major
components/stages of the scenario:
• Actions/interventions that are part of the National Public Policy on Social Housing and
constitute the basis for programs or projects at different administrative levels and at
various spatial scales (presented in section 3.1.1.1).
• Issues/subjects to be considered when reviewing the legal and regulatory framework on
Social Housing (presented in section 3.1.1.2).
• Measures/lines of action concerning the development of knowledge and institutional
capacity building (presented in section 3.1.1.3).
32 This can be a new Law on Social Housing or a complete review of the current Housing Law with all the necessary provisions, depending on the political decision to be made by the Government of Romania.
34
3.1.1.1. Interventions / ways of action preferentially to be included in the National Public
Policy on Social Housing
The interventions/ actions listed below are those that have been identified, following both the analysis
and the stakeholders meetings, and considered recommendable under actual circumstances. Decision
to list them took into consideration the priority needs, the most affected target groups, their realism
in implementation or in design and put in practice, as well as needed institutional arrangements.
Their nature is rather differentiated: there are direct interventions on housing stock, more integrated
ways of action at urban scale, measures concerning various groups of existing or potential
beneficiaries of social housing or even need for better definition of existing notions or practices, and
also of approaches used elsewhere, in the Romanian context. Particularly in Romania’s case, capital
investments in social housing for various target groups (aiming at the increase of social housing stock
but also at major improvements in existing buildings) need to be paired with measures to ensure the
sustainability of the social housing initiatives (providing for maintenance cost) and to be better
integrated with other operational public expenditures on social protection (such as supporting the
affordability of utilities), education, health services etc.
Some of widely used approaches/instruments in other EU countries are not included in the list, as the
existing situation, current practices and the institutional framework are suggesting a lack of
effectiveness – for instance, the “rent-control” is not listed, as most of the private rental housing
market is mostly grey.
Building of new social housing units
The action is intended to increase the social housing stock while better responding to local needs and
conditions, continuing in a better focused and more integrated manner many of the existing programs
and adding new ones. In terms of costs and benefits, building new social housing will generate
construction costs per unit similar to those sustained in previous years, although in case of adjusting
the general construction standards to better meet social housing needs, such costs may decrease. The
number of units constructed will be proportionate to the number of social tenants to benefit from
new housing. County and local authorities will implement in cooperation and co-finance (with central
government support) the national-level policy and the construction sector will benefit from new
contracts and higher productivity levels.
Acquisition of housing units for social housing purposes
The action is envisaged to increase the social housing stock, particularly where local market conditions
are suitable. With respect to related benefits of the action, potential social tenants will benefit from
better integration opportunities, as the aim of the measure is to ensure an adequate social mix
through housing opportunities. In terms of costs, acquisition of existing housing units is expected to
be mainly supported by local authorities, whereas county and central level government will only
marginally contribute to the financial effort. Construction sector is neutrally affected by the measure.
Conversion of existing buildings with other initial destination into social housing
The action should target existing buildings in public property, that are no longer in use according to
their initial purpose or that are no longer appropriate for their initial use by public authorities. In terms
of costs and benefits associated with the action, potential social tenants will benefit from increased
dwelling opportunities. Central and county level public administration is going to be neutrally affected
by the measure, as it is the local authorities that generally hold property rights on existing buildings
35
to be converted. Additionally, utility providers need to undertake investments (also financed by the
local counties) in order to ensure access of future social tenants to utilities. Construction sector can
slightly benefit from additional work required for the conversion of existing buildings.
Better definition of the concept of “convenient housing” (locuinta convenabila) in terms of
housing standards33
The action is achievable and might prove beneficial under the more comprehensive and integrated
approach of amendment of the existing legal framework applicable to social housing (the preferred
policy option) and might include inter alia:
• Relaxation of technical standards regarding the surface, number of rooms facilities and
utilities of newly built social housing units, in order to match existing dwelling conditions
on the housing market and/ or
• Relaxation of standards regarding the maximum number of social tenants per social
housing unit, aiming to address the most urgent needs and when a reasonable degree of
over inhabitance is culturally acceptable among social tenants.34
Following the logic above, the existing usage of term “convenient dwelling” (locuinta convenabila)
might continue with defined standards, one (or better two categories: for instance “decent dwelling”
(locuinta decenta) and (the more restrictive) “minimal dwelling” [locuinta minimala]) might be
introduced, with less restrictive standards). Following this introduction, the concept of “substandard
dwelling” might be defined in the law, generating programs of eradication or (where possible)
upgrading to acceptable standards.35
With respect to related costs and benefits of the action, potential social tenants will benefit from
increased dwelling opportunities. However, care should be taken for such social housing projects to
be developed in a manner that ensures the maintenance of an adequate level of social mix via non-
discriminatory access of social tenants to general infrastructure and public services. Central and public
administration is going to be positively affected by the decrease of the construction and social
protection related costs Construction sector can benefit from additional work required for the
construction of social housing units but may expect a decreased profitability of such social housing
units.
33 As mentioned in the description of the existing situation, the standards established by Law 114 and its provisions are in some respects, such as area of the dwelling, sanitation facilities, etc., above similar standards in EU countries (UK, for example). A consistent part of Romanian housing is actually under those standards, many of the collective housing dwellings but also an overwhelming majority of rural housing. According to NSSIPR, severe deprivation concerning housing condition is affecting 23% of the total population (mainly because of large part of population living in rural settlements, in housing without adequate or even minimal amenities); 47% of the poor are thus affected, and 37% from the child population as well. 34 This should obviously be considered not as a promotion of over-occupancy (some upper caps have to be established); in such situations (when larger families are living in an “average” dwelling), a more careful inspection of living conditions might be implied, in order to not allow insalubrious conditions. This more flexible attitude may allow families with many members and with low income to still improve their housing conditions by accessing social housing and it may also allow them, at the same time, to cover the expenses incurred. 35 This option may thus generate a more refined image of existing housing problems, if new categories will be taken into account in next censuses. Besides that, these new categories of dwelling are not only “social”, as many private dwellings may fall in them, when examined (see for instance, data concerning access to utilities or rooms without enough natural light provided). Cautionary, these new categories are still making necessary the introduction in legislation of “insalubrious housing” (in which case, not only the size and the equipment are necessary to be examined, but also other issues related to state and use of the dwelling). It might be said that ignoring to address via more encompassing, better targeted and sustained programs these two types of problems – housing in slums and under any decent standards, and insalubrious conditions of housing – contributed massively to the worse conditions of housing for the poorest (Knowledge Exchange Workshop, MDRPA/World Bank, July 24, 2015, Bucharest).
36
Upgrading the existing social housing stock
The measure is intended to cover modernization works on existing social housing units, with respect
to general condition/state of the building, utilities, insulation, facilities, etc. Existing social tenants will
benefit from improved dwelling conditions and from smaller utility invoices in the future. The central
level government is expected to financially contribute within dedicated programs but the highest
share of the costs will, most probably, be incurred by the local authorities that hold property rights on
the social housing stock. Construction sector will slightly benefit from improvement works orders
received from the local councils.
Direct assistance for people dwellings in precarious conditions
The measure is aimed at buildings´ improvement – eventually discerning between the legally
owned/built or informally – in order to prevent people dwelling in such conditions to become
homeless and, consequently, in need for social housing.36 In terms of effects, the measure will benefit
dwellers of existing "precarious"37 housing units. The main share of the financial burden is to be carried
by the local government level and possibly by the MLFSPE and/or MRDPA, at the central government
level. Construction sector may benefit from improvement works orders placed by the local authorities.
Urban interventions in informal settlements or areas, in cities or in towns38
Urban interventions,39 although potentially costlier than on spot improvements of existing housing
units, are likely to be more beneficial to potential targeted groups/communities and more efficient as
an investment altogether. The larger share of the investment costs is going to be bore by local
authorities although dedicated programs could be designed at the central level. Construction sector
operators will benefit from increased works orders.
Urban renewal operations in areas with large number of social housing units
The measure is foreseen to be developed under dedicated programs, including targeted projects for
social housing units, but also through interventions in public spaces and concerning tailored social
services. As with the case of urban interventions in informal/illegal settlements, urban renewal
operations in social housing-dominated areas are likely to be more beneficial to potential beneficiaries
than individual housing units’ improvements and more efficient investment. The larger share of the
investment costs is incurred by local authorities. Dedicated programs could be designed at the central
level. Construction sector operators will benefit from increased works orders.
Clearer separation between measures addressed to economical impoverished people living in
their own dwellings and to people living in social housing
36 Given the housing conditions for poorest groups in the society, this “preemptive” measure, even if not seems directly related to social housing, may substantially contribute to maintain many families out of homelessness or for living under any acceptable standards.
37 Even if notion is used in social protection legislation, there are no precise criteria or standards defined for this, as an example for lack of coordination among sectors legislations
38 According to Atlas of Urban Marginalized Areas, 28% of urban population in Romania lives in different types of disadvantaged areas and 3,2% reside in severely deprived urban marginalized areas. The population living in informal/illegal settlements in rural areas has to be added to these figures.
39 These may include roads construction or upgrading, public lighting, provision of playing grounds or small green spaces, but also access to water or to infrastructure for general social services (education, healthcare, social care, community facilities)
37
The above-mentioned principle to support social housing governmental actions is in order for a more
situational adapted approach. Currently, for many (potential) social tenants the high levels of monthly
amount needed to housing utilities is a significant barrier to accessing or maintaining social housing
opportunities. Moreover, high levels of utilities arrears increase the risk of impoverished people living
in their own dwellings to become homeless and in need of social housing unless adequately and timely
supported.40 The social housing beneficiaries are expected to take the most advantage of such
measures as they better meet their needs. Additionally, impoverished people living in their own
dwellings might benefit from financial support to partly cover their utilities expenses. The impact on
government authorities is difficult to assess. The effort of better designing the existing schemes
dedicated to support social housing needs is expected, however to be offset by the more efficient
spending of public resources. The impact of the measure on the construction sector is expected to be
neutral.
Measures to support tenants below the poverty line
The relative poverty line (60% of the median national equalized income, after social transfers) which,
under the current legal framework is the income limit up to individuals can benefit from social housing,
is rather high41 when compared to public funds available for such benefits. As a consequence, the
most vulnerable groups might be deprived of housing rights due to insufficient targeting of social
housing measures. The measure will benefit the most tenants that are below the poverty line as they
are under a higher risk of becoming homeless losing employment and access to health and education
services etc. Central and local government authorities might experience increased costs in the short
run potentially offset in the medium and long run by public spending savings with other social benefits.
Construction sector will not be affected by the measure.
Introducing the concept of “social rent”
Considering this option is imposing the preparation of consistent studies concerning the implications
and consequences, also taking into consideration potential opposition from the owners of multiple
housing units,42 if social rent mechanisms and amount control are to be introduced. The measure has
expected similar effects as the financial support granted to below the poverty line tenants or housing
owners.
Allowing local authorities to “impose” a certain percentage of social housing units in case of
medium and large housing development schemes
The measure is aiming for social mix maintenance and benefitting from market conditions, when and
where real estate sector goes up. The measure is expected to benefit potential social housing dwellers
in large cities and corresponding local authorities.
40 In 2012 16,5% of population is “overburdened” with housing costs (the housing costs are exceeding 40% of the household income) and 25% (and more than 1/3 of the number of families with children) had arrears for utilities going back several months. For the poorest, the situation is more difficult: 39,2% of the lowest quintile of income are currently receiving subsidies to help covering heating costs. (NSSIPR, based on Eurostat data)
41 The relative poverty rates are 11% for urban areas and 38% for rural areas, with difficult situations in north-west, south-west and south-east regions (between 29 and 33% of population under poverty threshold) [WB estimates, based on 2011 Census]
42 It is still difficult to estimate the number of dwellings, which are rent (or even sub-rent) by private owners/tenants, as the private rental market is very much in the “grey”. On the other hand, in many cases, where conditions favor that (and more often in large or dynamic cities), some of the dwellings in the ownership of the same person might be rented not for housing purposes, but for offices and small services providers, situation not entirely reflected in the census data.
38
Granting financial and/or fiscal incentives for private owners of new or existing housing
developments who commit on having “social housing units”
Rent subsidies and other fiscal incentives granted to dwelling owners might foster the spread of social
housing initiatives at the local level. Social housing tenants are expected to benefit from lower rents
although the mechanism might prove inefficient as housing landlords might try to appropriate the
subsidy without transferring the financial support to the intended beneficiaries.43 Joint contributions
schemes from central, county and local government could be designed for sharing the financial burden
purposes. Construction sector will not be affected by the scheme.
Financial schemes addressing the pro-active local authorities when they develop/embark on
social housing programs/projects
Under such financing schemes, the central and county level authorities are expected to support the
cost of the financial incentives, the local ones will benefit from such incentives and will develop social
housing projects for the benefit of individuals and households in need and construction sector
involved.
Use of county authorities to technically assist and to distribute state funds to rural authorities
The measure is intended to further involve the county level authorities into solving the social housing
problems their consisting local rural communities face. County authority level will transform into a
more functional financing channel for the social housing funds transferred from the state budget
while, also ensuring the local needs for technical assistance for the development and maintenance of
the social housing stock are met. In terms of associated costs and benefits for the stakeholders,
involvement of county authorities in technical assistance of local authorities and in transferring of
social housing funds from the central government level is likely to improve the efficiency of the
financing process for the mutual benefit of social housing potential beneficiaries and construction
sector.
3.1.1.2. Issues/subjects to be considered when reviewing the legal and regulatory
framework on Social Housing
The preferred option is based on the tandem formed by the public policy and a review of the current
legal and regulatory framework on social housing as the main legal instrument to put the policy in
practice. Once the policy adopted, the law will give legal power to the concepts, definition of target
groups and types of housing, division of responsibilities and mechanisms of cooperation. It will also
establish planning, designing, financial and implementation instruments, identifying types of
programs and/or projects that can be developed by the responsible authorities.
A revised law may generally ensure both the comprehensiveness and the flexibility for programs
and/or projects that might be developed and re-ranked as priority, given the changes in the policy,
following real needs or politically guided options. Some of the issues that have to be considered when
reviewing the legal and regulatory framework are listed below, with short comments pointing out the
gains resulting from this preferred option.
43 This presupposes some form of control over the rents; rent control, as a wider mechanism is not considered, being appreciated as very difficult to introduce and enforce – consequently it is missing from among recommended approaches.
39
Definition of social housing
The definition of social housing, whose review is crucial for improving the situation, in order to have
a better focus of actions and a more efficient use of the resources, might be restructured/enlarged in
an easy way, resulting in more encompassing and adequate definition in accordance to the social and
economic realities of Romania.44
Target groups definition
The target groups’ definition should be more coherent, based on a better distinction between various
groups of beneficiaries identified in the policy, which result from updated data and analytical studies.
The definition might also consider the inclusion of an “open-end-list”, allowing for some flexibility in
the future.
Types of social housing
Following target groups’ identification, the updated law should include a list of dwelling types, related
in a more coherent way to the policy, and better adequate to reality.
Public sector role
Reflecting the commitments endorsed in the public policy, the public sector role should be clearer and
better defined, in correlation with possible private sector, community and/or non-governmental
organizations’ involvement.
Partition of responsibilities
For guaranteeing the applicability of the policy’s actions, the separation of responsibilities concerning
the social housing stock (its enlargement, management, etc.) and access of beneficiary to it (criteria
of eligibility, selection, priority groups, etc.) should be clearly defined both for types of social housing
or in relation with various target groups.
Planning instruments
An updated law may assure a better integration of social housing instruments with the urban planning
and design ones, but also establish the models for local public policies concerning social housing.
Financial instruments
Financial instruments, clear and adaptable at the same time, should be established in accordance with
financial mechanisms and fiscal rules, ensuring an adequate harmonization with the concerned
legislation; these instruments have the chance to be better tailored to situations/target groups/type
of social housing.
Operational instruments
Concerning the type of interventions/ways of action mentioned above, adequate operational
instruments have to be described, particularly for the partnered interventions and programs/projects
with multiple sources of financing.
44 See the footnote above, referring to dwelling standards and concept of “convenient dwelling”. On the other hand, the difference between “housing” (locuire) as a basic need and as a complex urban activity (the term urban here is generic, for rural settlements also) and “dwelling” (locuinta) as “the housing unit” has to be taken into account. As the Law 114 is defining “convenient dwellings” and “social dwellings”, while here a more coherent approach is proposed in this Substantiation Note, for addressing all main components of “housing needs”.
40
Partnership arrangements
As the multi-actor approach is decided in the policy and described in the law, the specific provisions
for various types of partnerships – public-public, public-private or others – will be more
comprehensive.
Legal base for technical regulation
Given the character of framework-law, a set of subsequent regulation will be established based on its
provisions, according to authorities/institutions in charge, but also including room for adaptation and
ad-hoc rules/norms/standards.
3.1.1.3. Measures/lines of action concerning development of knowledge and institutional
capacity building
A coherent and well-targeted policy has to be based on updated knowledge on existing situation and
processes of change. As the lack of structured data-based knowledge is admitted by all stakeholders
as being an important problem, a key element of this option is related to development of knowledge
and put in direct connection with the need for institutional capacity building.45
The lines of action listed below are critical for a successful implementation of both the policy and the
legal and regulatory framework on social housing and they have to be part of two processes: one
dedicated to the development of an accurate and up-datable knowledge base, and the second to
increasing the technical capacities of county and local authorities. This will contribute to better assess
the situations, design their own local policies and procedures within the new legal framework,
cooperate with all types of stakeholders in designing and implementing programs and projects related
to social housing (including access to multiple financing sources), manage the social housing stock and
monitor and evaluate the situations, changes, new needs.
The first process – knowledge base development – might be incrementally developed, in parallel with
the formulation of the policy, contributing in stages to more realistic approaches and adequate and
more flexible instruments designed for actions.
The second process – capacity building – might start with transfer of knowledge and existing good
practices in the first stages, but has to be seen in stronger coordination with differentiated socio-
economic situation in various types of local administrative units (including budgetary
limitations/constraints) – urban/rural and according to size.
For both processes, the preferred option allows more consistency, effectiveness and efficiency, as
described in short comments below.
Review of existing data
Even if data exist in several sources – mainly in 2011 census but not only there – there has not yet
been done a comprehensive analysis on social housing matters.
45 In many cases along the years, the definition of new responsibilities – for local authorities particularly – has not been accompanied by necessary adjustments or improvements in the institutional framework – the size, organizational charts and staff requirements of local institution, in particular, but also for central or county ones (the decentralization process as a whole is criticized for this, and in the area of urban development, the cases of Law 50/1991 and law 350/2001 are relevant).
41
Moreover, some structuring of data banks does not support such type of analysis46, together with lack
of local knowledge.47
Examining the data and correlating it with field research might also lead to restructuring of data banks
concerning social housing – including NIS census methodology on collecting and use and contribute
to design of reduced sets of indicators that might be used by local authorities in monitoring situation
and thus allowing inter-censuses comparative analysis.
Field-research/in-depth studies
Obviously the field research will allow better in-depth studies and a more complete picture of various
types of differences (in spatial, economic, social terms) regarding both the groups of potential/existing
beneficiaries and also the housing stock and its state. This is also the best way to correlate the social
housing policy and instruments with social assistance and anti-poverty strategies and policies. Given
the speed of changes, they may concentrate on that, reinforcing the role of preventive actions. The
preferred option will favor an incremental and more comprehensive valorization of such research,
with more accuracy.
Stakeholders concerting
Having a coherent policy (formulated together with all types of stakeholders) will allow the design of
adequate forms of concerting the efforts to address social housing needs48. Concerting at various
levels and having the cooperation forms adaptable is also a key issue for the legislation.
Institutional capacity improvements
Within the framework of a coherent and, at least, medium term policy, the institutional changes will
be systematic and sustainable. They might be different and in accordance with legally assigned
responsibilities for large cities, which may directly and more autonomously address the social housing
issues, and for small towns or rural administrative units, where county level assistance is essential.
Technical capacity building
The policy will have a part dedicated to technical capacity building, as this is acknowledged today as
a critical issue for both generating a more pro-active attitude and better tuned programs and projects.
Building this capacity through the use of all types of means – training programs, pilot projects and
good practice sharing, developing communication, social mobilization, negotiation and monitoring
abilities – will allow the institutional changes to be matched by better technical capabilities. The law
might in fact comprise measures to structure and to finance this process, including access to EU
funding. On the other hand, developing abilities and habits concerning inter-disciplinary work, mainly
with people and teams in area of social assistance, but also in the area of urban planning and utilities,
should be a target easier to reach if done based on clear policy and legal provisions.
Monitoring and evaluation
As lack of knowledge on existing processes of change is an assumed weakness, and both the existing
46 For example, in the census, when referring to buildings/dwellings, only the “state-owned” category exists, including here all types of public property and thus making data irrelevant for more in-depth structured analysis.
47 Most of large cities (Bucharest in front position) do not have even now (17 years after the Law on public property has been adopted) a clear inventory of their real-estate properties, or of their housing-properties on types of use; that inventory exists in smaller towns or rural areas, where however the stock is however small.
48 As proven during the process of RIA, the stakeholders brought more in-depth knowledge and identified more concretely groups and situations that are not addressed or are only partially touched by existing programs in social housing.
42
law and the current programs have never been coherently and comparatively evaluated, defining the
monitoring mechanisms and set of relevant indicators will be both easier and more comprehensive if
correlated with a social housing policy and with the types of programs and instruments established
after reviewing the legal and regulatory framework of social housing.
3.2. Financial impact on public authorities
Assessing the financial impact of the preferred policy option on public authorities is not an easy task,
given its rather high degree of generality and associated uncertainty regarding the actual final content
of the policy option, in terms of scope of actions and interventions envisaged. All three flows of
activities, namely the preparation of the public policy on social housing, the creation of a clearer legal
framework dedicated to social housing as well as the gathering of required information for a thorough
substantiation of the actual public policy on social housing, require significant financial efforts from
the public authorities, in the short run.
In order to ensure a coherent approach of social housing, streamlined processes supported by
adequate institutional infrastructure are necessary. Corresponding financial efforts must be
undertaken at the central level government by ministries having responsibilities in the fields of
housing, social protection, public finances or legal framework (MRDPA, MLFSPE, MPF, MJ etc.).
Central government will be more significantly impacted from the financial perspective in the medium
run, when actual social housing actions and interventions will have to be implemented. Such efforts
are, however, expected to be at least partially compensated for by more effective and efficient public
spending. In the long run, the preferred policy on social housing is expected to decrease the financial
burden of public authorities with other social protection measures that might no longer be necessary
once the housing problem is alleviated for the most vulnerable groups of population.
Additional financial efforts are required in the short run for the integration of the county and local
level authorities into the processes foreseen under the preferred policy option dedicated to the
reduction of the social housing problem. As with the case of the central government authorities, actual
implementation of social housing actions and interventions is expected to generate the most
significant share of local public expenses necessary to be covered in the medium run. A similar
reduction of the financial effort dedicated to other social protection measures is expected to arise in
the medium and long run as the social housing problem might gradually be alleviated by the measures
of the preferred policy option.
The county authorities are expected to be more mildly affected during the implementation of the
public policy processes as only increased financial channeling and technical assistance roles are
foreseen to be assumed at this level.
The tables below synthesize the main effects of the proposed set of actions and interventions
addressing the social housing problem at the central, county and local level, respectively, in relation
to financial impacts. Of all the social housing related measures (actions or interventions) taken into
consideration, the highest positive impact on all levels of public administration, are expected to have,
in decreasing order, the following:
The better definition of the concept of “convenient housing” in terms of housing
standards, through both relaxation of technical standards regarding the surface, number
of rooms, facilities and utilities of newly built social housing units, in order to match
existing dwelling conditions on the housing market and/ or relaxation of standards
43
regarding the maximum number of social tenants per social housing unit, aiming to
address the most urgent needs and when a reasonable degree of over inhabitance is
culturally acceptable among social tenants,
The involvement of county level authorities in technical assistance and funds channeling
towards local administration and
Granting to local authorities the authority to require a certain percentage of social
housing units to be developed in case of medium and large housing development projects,
in order to maintain the social mix.
At the lower end of the net benefits spectrum one can find the most costly actions and interventions
for the public administration, respectively:
The acquisition of housing units in order to increase the social housing stock, and
Granting financial (rent subsidies) and/or fiscal incentives for private owners of newly
built or existing housing units who provide social housing services.
A neutral impact on the entire public administration spectrum is expected to have:
Building of new social housing, better adapted to local needs or conditions,
More clear and more situational adapted separation between measures addressed to
economic impoverished people living in their own dwellings and to people living in social
housing and
Financial schemes addressing the pro-active local authorities when they develop social
housing programs or projects.
Table 4. Overall net impact of proposed interventions/actions on public authorities at the central level
No Interventions or actions
Impact on central government authorities (*)
-2 -1 0 NA +1 +2
1 Building of new social housing units -1
2 Acquisition of housing units for social housing purposes -1
3 Conversion of buildings into social housing 0
4 Better definition of the concept of “convenient housing” in terms of housing standards
+2
5 Upgrading the existing social housing stock NA
6 Direct assistance for people living in precarious conditions -1
7 Urban interventions in informal settlements/areas, in cities/towns
-1
8 Urban renewal in areas with large number of social housing units
-1
9 Tailored support measures for poor people living in own/ social housing
NA
10 Measures to support tenants below the poverty line -1
11 Introducing the concept of “social rent” -1
12 Mandatory percentage of social housing units in medium and large housing development projects
0
44
13 Financial and/or fiscal incentives for private owners offering social housing
-1
14 Financial incentives for local authorities that develop social housing programs/projects
-1
15 Involvement of county authorities in technical assistance and state funds distribution to rural authorities
+1
Source: authors’ assessment
(*) MRDRPA mainly, but other line ministries, as well (MLFSPE, MPF, MJ, MH etc.)
Table 5. Overall net impact of proposed interventions/ actions on public authorities at the county level
No Interventions or actions Impact on county level
authorities (*)
-2 -1 0 NA +1 +2
1 Building of new social housing units -1
2 Acquisition of housing units for social housing purposes -1
3 Conversion of buildings into social housing 0
4 Better definition of the concept of “convenient housing” in terms of housing standards
+1
5 Upgrading the existing social housing stock
6 Direct assistance for people living in precarious conditions 0
7 Urban interventions in informal settlements/areas, in cities/towns
NA
8 Urban renewal in areas with large number of social housing units
NA
9 Tailored support measures for poor people living in own/ social housing
NA
10 Measures to support tenants below the poverty line 0
11 Introducing the concept of “social rent” 0
12 Mandatory percentage of social housing units in medium and large housing development projects
0
13 Financial and/or fiscal incentives for private owners offering social housing
-1
14 Financial incentives for local authorities that develop social housing programs/projects
-1
15 Involvement of county authorities in technical assistance and state funds distribution to rural authorities
0
Source: authors’ assessment
(*) County councils, local administration, decentralized public services and public utility services providers
45
Table 6. Overall net impact of proposed interventions/ actions on public authorities at the local level
No Interventions or actions
Impact on local level authorities (*)
-2 -1 0 NA +1 +2
1 Building of new social housing units -2
2 Acquisition of housing units for social housing purposes -2
3 Conversion of buildings into social housing -1
4 Better definition of the concept of “convenient housing” in terms of housing standards
+2
5 Upgrading the existing social housing stock -1
6 Direct assistance for people living in precarious conditions -1
7 Urban interventions in informal settlements/areas, in cities/towns
-1
8 Urban renewal in areas with large number of social housing units
-1
9 Tailored support measures for poor people living in own/ social housing
NA
10 Measures to support tenants below the poverty line -1
11 Introducing the concept of “social rent” -1
12 Mandatory percentage of social housing units in medium and large housing development projects
+1
13 Financial and/or fiscal incentives for private owners offering social housing
-1
14 Financial incentives for local authorities that develop social housing programs/projects
+2
15 Involvement of county authorities in technical assistance and state funds distribution to rural authorities
+1
Source: authors’ assessment
(*) local councils, decentralized public services and public utility services providers
3.3. Economic impacts on businesses and consumers
The main beneficiaries of social housing are the population groups targeted by the preferred policy
option on social housing. Additional beneficiaries include the companies in the construction sector
and related services such as, urban planning, architecture, project development, utilities and other
indirect beneficiaries such as construction materials providers. Due to the fairly general level of policy
formulation and to the broad scope of actions and interventions, adequate information necessary for
a comprehensive quantitative assessment is difficult to gather at this stage.
A methodological approach similar to that used to assess the impact of the preferred policy measure
on the public administration was employed for the evaluation of the net impact on beneficiaries,
existing and future social tenants as well as for the businesses involved in delivering the necessary
goods and services for the social housing policy implementation.
Economic impact on beneficiaries
Quite obviously, under the preferred policy option, all the actions and interventions that the preferred
policy option comprises are expected to have a net positive impact on the beneficiaries. However, the
46
following actions and interventions are expected to have the highest net positive impact on direct
beneficiaries of social housing:
Building of new social housing better suited to local needs and conditions,
Acquisition of housing units where local market conditions are favorable while
maintaining a certain degree of social mix,
Urban renewal in areas with large number of social housing units,
Better targeted measures addressing both poor individuals or families dwelling their own
housing units and individuals or families living in social housing units,
Measures targeted to support tenants below the poverty line,
For the following actions and interventions, although expected to have net positive impacts on
beneficiaries, the magnitude of the impact is estimated to be slightly smaller:
Conversion of existing buildings in public property into social housing
Better definition of the concept of “convenient housing” in terms of housing standards
through relaxation of technical standards regarding the surface, number of rooms,
facilities and utilities of newly built social housing units, and/ or via relaxation of standards
regarding the maximum number of social tenants per social housing unit
Upgrading the existing social housing stock in terms of state of the buildings, utilities,
insulation, facilities, etc.
Direct assistance for people living in “precarious” houses aimed to improvement of
buildings in order to prevent them to become homeless and in need for social housing
Measures to support tenants below the poverty line
Introducing the concept of “social rent”
Mandatory percentage of social housing units in medium and large housing development
projects
Financial and/or fiscal incentives for private owners offering social housing
Financial incentives for local authorities that develop social housing programs/projects
Involvement of county authorities in technical assistance and state funds distribution to
public authorities in rural areas.
Economic impact on the construction sector
With respect to the impact of the preferred social housing policy option on the construction sector,
building of new social housing units is expected to have the highest net positive impact.
A still positive but slightly smaller impact on the construction sector will have:
The conversion of existing buildings in public property into social housing
Upgrading the existing social housing stock (in terms of state of the building, utilities,
insulation, facilities, etc.)
47
Direct assistance for people living in “precarious” houses aimed to improvement of
buildings
Urban interventions in informal settlements or areas, in cities or towns,
Urban renewal in areas with large number of social housing units through integrated
programs including targeted projects for social housing units, but also intervention in
public spaces and concerning tailored social service
The impact of the better definition of the concept of “convenient/acceptable housing facility” in terms
of housing standards is difficult to assess in the absence of adequate information. The relaxation of
technical standards applicable to newly built social housing units in terms of total surface, number of
rooms, facilities and utilities might lead to smaller revenues for the construction sector businesses but
more operational efficiency.
Finally, the following actions and interventions are expected to have a neutral effect on the
construction sector:
More clear separation between measures addressed to economical impoverished people
living in their own dwellings and to people living in social housing,
Measures to support below the poverty line tenants,
Introducing the concept of “social rent”,
Granting to local administration the authority to impose a certain percentage of social
housing units in case of medium and large housing development projects,
Granting rent subsidies and/or fiscal incentives for private owners of newly or existing
housing developments who offer social housing services.
The administrative burden generated by the adoption of the preferred policy option cannot be
assessed at this stage when the exact scope of the actions and initiatives is not clearly defined.
However, if new categories of beneficiaries are added to the social housing target groups the benefits
will supposedly be accompanied by corresponding obligations of the beneficiaries towards authorities.
Public authorities will correspondingly need to manage more information related to the
implementation of the policy options. Such details are critical when deciding the final content of the
policy measure and care should be paid to achieving the right balance between meeting the
information needs and the associated costs of processing it. Construction sector is not expected to
incur additional administrative burdens. The administrative burden on the construction sector is
difficult to assess at this stage. Various incentives granted to businesses that chose to involve in social
housing construction projects may be paired by additional administrative requirements to ensure the
efficacy and efficiency of the public expenditures. On the positive side such incentives may include
simplified administrative procedures for the implementation of social housing construction projects
(i.e. simplified and less expensive procedures for obtaining the construction permits, etc.)
Depending on the exact content of the future financial and/ or fiscal incentives to be granted to
businesses in order to foster their involvement in delivering social housing units or services, the impact
on competition or state aid implication might need thorough consideration.
The preferred option is expected to generate limited to no impact to SMEs.
48
Table 7. Overall net impact of proposed interventions/ actions on potential/ targeted beneficiaries
of social housing
Source: authors’ assessment (*) beneficiaries of social housing, including owners of dwellings and individuals belonging to vulnerable groups, for specified actions
Table 8. Overall net impact of proposed interventions/actions on construction sector
No Interventions or actions Impact on construction sector (*)
-2 -1 0 NA +1 +2
1 Building of new social housing units +2
2 Acquisition of housing units for social housing purposes 0
3 Conversion of buildings into social housing +1
4 Better definition of the concept of “convenient housing” in terms of housing standards
-
5 Upgrading the existing social housing stock +1
6 Direct assistance for people living in precarious conditions
+1
7 Urban interventions in informal settlements/areas, in cities/towns
+1
No Interventions or actions Impact on (potential)
beneficiaries (*)
-2 -1 0 NA +1 +2
1 Building of new social housing units +2
2 Acquisition of housing units for social housing purposes +2
3 Conversion of buildings into social housing +1
4 Better definition of the concept of “convenient housing” in terms of housing standards
+1
5 Upgrading the existing social housing stock +1
6 Direct assistance for people living in precarious conditions +1
7 Urban interventions in informal settlements/areas, in cities/towns
+2
8 Urban renewal in areas with large number of social housing units
+2
9 Tailored support measures for poor people living in own/ social housing
+2
10 Measures to support tenants below the poverty line +1
11 Introducing the concept of “social rent” +1
12 Mandatory percentage of social housing units in medium and large housing development projects
+1
13 Financial and/or fiscal incentives for private owners offering social housing
+1
14 Financial incentives for local authorities that develop social housing programs/projects
+1
15 Involvement of county authorities in technical assistance and state funds distribution to rural authorities
+1
49
8 Urban renewal in areas with large number of social housing units
+1
9 Tailored support measures for poor people living in own/ social housing
0
10 Measures to support tenants below the poverty line 0
11 Introducing the concept of “social rent” 0
12 Mandatory percentage of social housing units in medium and large housing development projects
0
13 Financial and/or fiscal incentives for private owners offering social housing
0
14 Financial incentives for local authorities that develop social housing programs/projects
+1
15 Involvement of county authorities in technical assistance and state funds distribution to rural authorities
+1
Source: authors’ assessment (*) The construction sector is divided into construction companies, developers, designers etc.
3.4. Social / Health impacts
There has been little research that clearly links in a quantitative manner housing, social networks and
employment outcomes in relation to social housing. In general, government intervention in the form
of social housing addresses market failure by providing decent homes for poorer households. Direct
provision of affordable housing has additional benefits, notably as part of creating mixed
communities.
Housing regeneration projects in general, help to stabilize neighborhoods in decline. But housing
renewal alone is not enough to secure regeneration. Pairing economic strategies for job creation and
improving market demand are also necessary.
In Romania, moreover, there are significant gaps in knowledge or understanding in relation to the
economic and social impacts of housing. This is mainly because of the lack of relevant housing data on
the economic impact, and the difficulty to disaggregate other factors in measuring the impacts of
housing on health, education and so on.
Health
A large body of research on housing and health show that in general, poor housing condition in terms
of overcrowding, poor heat insulation and air quality problems lead to poor self-assessed physical
health as well as stress and mental health problem.49 However, the relationship between poor
housing and poor health may reflect an accumulation of problems where poor housing is just one, but
not the only, factor that causes health problems.
Improved access to social housing is expected to be associated with health benefits including reduced
problems with self-care and reduced anxiety and depression. Improved access to social housing may
also lead to health benefits by raising the quality of the home (e.g. improved heating, reduced
humidity, better access to utilities, cleaner dwelling environments), which is associated with health
49 As synthesized in Cambridge Centre for Housing and Planning Research (2010) “What does the literature tell us about the social and economic impact of housing? Report to the Scottish Government: Communities Analytical Services”
50
benefits. If maintenance and deepening of the social mix is pursued, access to health services is
expected to be associated with social housing. On the other hand, healthier environments may reduce
the public spending on health services.
Crime
A general increase in housing investment will not necessarily reduce crime. Increased investment in
other social policies, particularly those addressing poverty and unemployment, is more likely to
reduce crime but also to protect existing housing investment. Improved provision of social housing
services is expected to be positively correlated with crime prevention especially by reducing
homelessness and overcrowding of informal and unfit dwellings. The social housing policy measures
are expected to allow better access of beneficiaries to education and labour market which, in turn,
are positively associated with reduced crime. If the maintenance of an adequate level of social mix is
targeted a positive correlation between social housing and compliance to social norms is to be
expected. Proving direct causality between the improved access to social housing and reduced crime
might, however, be difficult.
Labour market outcomes
The theoretical positive impact of the improved access of beneficiaries to social housing on their
labour market access is self-evident, especially for the most vulnerable groups, such as young
homeless, and/ or leaving foster care institutions. Furthermore, improved access to jobs, in turn,
generates disposable incomes to be dedicated to dwelling maintenance, payment and utilities etc.
ensuring the sustainability of the initial public investment. However, in the case of the most vulnerable
groups, additional social support measures are needed in order to complement for insufficient labour
incomes as Romania has the highest rate of employed population in poverty across European Union.
On the downside, existing studies reflect low mobility among tenants in rented accommodation in the
social sector.
Well-being
Higher satisfaction with housing is usually associated with higher life satisfaction, though this does not
establish causality. In order to identify the strength of the correlation additional investigation is
necessary.
Education
Lack of dwelling and overcrowding may negatively impact on educational outcomes for children, for
example via negative impacts on health or by reducing the support available from parents. For the
most vulnerable groups, lack of minimal conditions for housing and/or living in informal settlements,
sometimes isolated from the rest of the town or village, may result in very high rates of school
abandoning.
Community cohesion
Improved housing conditions, in general, result in benefits in terms of community cohesion, with the
literature finding changes to aspects such as adult socializing and child development following home
improvements, as well as increased feelings of safety. However, it is difficult to identify an easily
measurable positive correlation between large buildings of multiple housing units and improved
community cohesion.
51
Admittedly, building of social housing units within already established residential areas may face
opposition from the existing inhabitants. However, the option is more probably to generate long-term
positive results in terms of community cohesion than ostracizing the social housing beneficiaries into
ghetto-like neighborhoods. Mixed communities are expected to reduce the stigma of a neighborhood
by lowering average levels of indices of deprivation and reducing spatial disparities. However, in
Romania’s case evidence proving that residents have improved their economic prospects merely by
living in mixed communities is missing.
Concerning the community cohesion, the link between measures that target the dwellings/housing
buildings and those regarding urban scale interventions, in public spaces such as streets or public
gardens or parks, but also in education or childcare infrastructure, or in supporting small scale crafts
and retail, is recognized as having a higher effect on social cohesion and neighborhood identity
reinforcement.
3.5. Environmental impacts
According to the Sustainable Social Housing Initiative (SUSHI) launched by United Nations
Environment Program (UNEP) in 2009:50
The sustainable buildings agenda has gained considerable momentum in developed countries, where
innovative projects compete to achieve zero-energy, climate-friendly buildings. However, there is yet
a lack of attention paid to sustainability considerations in developing countries. Societies risk locking
their building stock into inefficient and environmentally detrimental practices for decades unless
efforts are made to mainstream sustainable buildings. The largest and fastest growing building
markets are today found in the developing world. Population growth and rapid urbanization are key
factors contributing to the pressure on building markets to rapidly increase the number of housing
units, in particular in urban centers. Residential buildings represent a large share of new construction.
The housing shortage has led to the launch of large-scale housing programs, targeting the low-income
population, who is often the most affected by increased housing prices and urban segregation.
Although social housing programs usually aim to deliver housing units at low-price and provide shelter
for the most vulnerable families, the time and budget constraints often lead to low-quality,
unsustainable, and sometimes unhealthy buildings. The high rate of building defects leads to users
having to face, in medium and long run, high operation and maintenance costs; on the other hand the
constraints in land use often result in units being located in remote areas, where users have little
access to urban infrastructure, and even less to social and economic opportunities of the city.
In Romania housing accounts for the largest share, 36%, of final energy use.51 The sector is the second
worst (after education) in terms of energy consumption per unit of floor area.52 Over 25% of the poor
population, and over 10% of the population above the poverty line, are estimated to be unable to heat
their homes to adequate levels; while over 20% of the population is in arrears over utility bills. Any
measure related to renovation of existing dwellings or construction of new social housing should take
into consideration these issues and possible future impacts on the environment, not only due to the
50 http://www.unep.org/sustainablesocialhousing/index.asp 51 Odyssee (2012). Final consumption percentages for 2009-10. Industry accounts for 31%, Transport for 23% and tertiary
sector accounts for 9%. 52 BPIE (2014)
52
need to have a more coherent approach to energy efficiency, but also to take into consideration the
difficulties of some beneficiaries to cover utility bills.
Since the exact content of actions and interventions cannot be established at this stage, no actual
assessment of environmental impact of the public policy was undertaken in the current exercise.
However, it can be estimated that new dwellings or refurbished dwellings might be environmental
friendlier than they used to be, and they would yield superior outcomes compared to the no-action
scenario.
Instead, generic costs and benefits associated with sustainable social housing are listed below, as they
are laid down in the guidelines UNEP prepared as part of its initiative on sustainable social housing:
Sustainable buildings deliver environmental, but also social and economic benefits.
Operation and maintenance costs are reduced for occupants, while health and comfort
conditions are improved. At national level, an increased energy performance can reduce
energy requirements for the country as a whole, and support the achievement of
sustainability and development commitments.
Developing a local approach allows to maximize the benefits achieved. Actions based on
the environmental and social context that make use of local assets, resources and
opportunities, while responding to the needs and preferences of users and contributing to
national development priorities, including poverty reduction and support to the local
economy.
Sustainable solutions do not necessarily imply an increase in costs. Diverse and
affordable solutions (techniques, materials and technologies) are available on local
markets. They can deliver efficiency improvements in social housing units, and their
dissemination can promote innovative approaches to environmental and social
sustainability on the market.
Incremental investments in sustainable solutions can be offset in a relatively short
periods of time. The uptake of sustainable solutions at a broader scale allows multiplying
the savings and benefits, while reducing implementation and operation costs. The revenue
generated from savings (in energy and water consumption for instance).
Section 4. Alternative Option
The alternative option is based on the need for priority interventions concerning social housing,
particularly targeted to urgent needs and/or to most vulnerable groups. This logic of immediate
action, which is the main strength of the option, may generate also some weaknesses – imbalances
among components, limited understanding of the overall situation, risks of inefficient use of funds,
and in some cases ineffectiveness generated by isolated or non-integrated programs and projects. In
the past decades several attempts to address the issues have been marked by this type of failures,
given also the partial and isolated - sometimes even fragmentary- changes brought to the law adopted
in 1996.
The alternative option is nevertheless formulated having in mind the possibility of not entirely
replacing the existing law (a process that might be cumbersome), but by amending its provisions,
53
based on both assumed political commitments – in the brief policy statement – and quickly gathered
(even if incomplete/not comprehensive) knowledge.
4.1. Description of the option
When investigating alternative policy options, a more quickly reactive approach for social housing
problem, consisting of three main reduced scope processes has been identified:
Delivery of a government policy statement on the problem and identification of urgently
needed actions. It may choose to concentrate on several target groups and some
accordingly priority programs, capitalizing on achievements of already developed
programs/actions and/ or trying to fill in the gaps and fix the shortcomings, respectively.
A quick assessment of most stringent problems concerning social housing. It has to identify
the most urgent needs in terms of amplitude and focus more on groups and situations than
on in-depth analysis and/or measurements.
Limited amendment of the current Housing Law No. 114/1996, including a revised and
enlarged definition of social housing and new more diversified instruments, in addition to
various forms of devolution or partnering on addressing the various issues.
In order to be successful in their results, these three processes, which actually have to be developed
in parallel - with the law amendments being somehow the last phase of the scenario -, require a tighter
coordination and imply decisive and better-assumed responsibility from political decision makers. At
the same time, the review of the existing law has to be courageous enough, in order to avoid pitfalls
like resume to replication of existing programs/mechanisms.
The same set of actions and interventions taken into account in the preferred option have been
individually investigated in the case of the above defined alternative policy option, for costs and
benefits broken down by types of involved actors. The results of the quick qualitative assessment are
presented at the end of the impact sections.
Out of the 15 actions and interventions included in the preferred policy option, more than half were
found not suitable to be undertaken under the alternative policy option, mainly due to the limited
scope and quick fix character of the option, namely:
Better definition of the concept of “convenient housing” in terms of housing standards
Urban interventions in informal settlements
Urban renewal in social housing areas
Tailored support measures for poor people living in own or social housing
Introducing the concept of social rent
Mandatory percentage of social housing units in medium and large housing development
projects
Financial and/or fiscal incentives for private owners offering social housing
Involvement of county authorities in technical assistance and state funds distribution to
rural authorities
Some of the above mentioned actions, however, can be implemented on a case by case basis (with
the exception of social rent), with significantly reduced costs but with expected lower efficiency, as
well. No costs and benefits were assessed for such measures. Additionally, although applicable under
54
the alternative policy option, the following measures are expected to have a net neutral effect on all
stakeholders:
Building of new and more adapted to local needs/conditions social housing
Acquisition of housing units where local market conditions allow for it while targeting the
maintenance of social mix
Direct financial assistance for improvement works on housing units for people living in
“precarious” houses – eventually discerning between the legally owned/built, or informally
– in order to prevent them to become homeless/in need for social housing
More clear (and more situational adapted) separation between measures addressed to
economic impoverished people living in their own dwellings and to people living in social
housing (the reference is to subsidies/help for utilities’ costs)
Across all stakeholders, only two actions were identified to have a slight but positive net impact on
the social housing problem:
Upgrading the existing social housing stock and
Financial support schemes for pro-active local authorities in the field of social housing
At the lower end of the net impact range on all stakeholders one can find the following actions:
Measures to support tenants below the poverty line and
Conversion of state owned buildings into social housing.
4.1.1. Actions and interventions under the alternative policy option and related costs and
benefits
The current section lists the actions and interventions to be undertaken under the framework of the
preferred policy option addressing the social housing problem. Each measure is briefly assessed in
terms of related costs and benefits. The measures are grouped according to the three major
components/stages of the scenario:
Interventions/ways of action in a policy statement on the problem and identification of needed
actions (presented in section 4.1.1.1).
Measures/subjects of a quick assessment of stringent problems concerning social housing
(presented in section 4.1.1.2).
Measures/subjects to be included in limited amendments of the current Housing Law No.
114/1996 (presented in section 4.1.1.3)
4.1.1.1. Interventions/ways of action preferentially to be included in a policy statement
identifying needed actions
The whole package of potential actions and interventions under the alternative policy option,
qualitatively assessed for costs and benefits is briefly listed below.
Building of new social housing, more adapted to local needs/conditions
The action is similar to that included in the preferred policy option but with a more limited scope.
Under the slightly adjusted framework of existing social housing programs, better targeting of social
55
housing initiatives could be achieved. Costs and benefits of the action/ intervention are similar but
smaller than in the case of the action to be undertaken under the preferred policy option. County and
local authorities will implement in cooperation and co-finance the national-level programs dedicated
to more specific and stringent needs. Although the public expenditures may be lower than in the case
of the preferred option, they may as well be less efficient. To a lower extent, the construction sector
will benefit from new contracts and higher productivity levels.
Acquisition of housing units by local authorities
As with the case of building of new social housing under the alternative policy option, the action can
be taken as a quick reaction instrument aimed to meet – under the slightly amended social housing
programs – only the most stringent social housing needs and where the local public budget and market
conditions allow for it. Only the least favored potential social tenants are expected to benefit from
the measure as comprehensive action at the national level is unlikely in the absence of appropriate
knowledge of housing needs and of housing market conditions. The financial impact on the public
budget (at the central, county and or local level) is expected to be lower but financial resources are
likely to be spent less efficiently in the absence of a more integrate approach of the problem to be
solved. Construction sector is, however, neutrally affected by the measure.
Conversion of existing buildings in public property into social housing
Under the alternative policy option, the conversion of public property buildings into social housing
can only be used as ad-hoc intervention, where such buildings are easily identifiable by local
authorities and less costly to convert. Central public administration might embark in providing ad-hoc
examples to public authorities by either transferring such buildings to local authorities with the
purpose of their conversion into social housing and/ or by providing the funds necessary for the
completion of the buildings conversion. The measure is expected to generate limited positive impact
on the potential social tenants and on the construction sector and limited negative impacts on the
state, county and/or local budgets.
Better definition of the concept of “convenient housing”
The measure cannot be achieved under the alternative policy option as a comprehensive and
integrated approach of the amendment of the existing legal framework applicable to social housing is
needed but not included in the policy option. Even if minor “extensions” might be done to the existing
definition, this implies the risk of more imbalanced programs. Therefore, no costs and benefits related
to the measure were assessed.
Upgrading of the existing social housing stock
The measure refers to improvements in the general state of the building, insulation, facilities, access
to utilities etc. Under the alternative policy option, the measure can only be implemented in a limited
manner, within the framework of existing programs. Public expenditures associated with the measure
are probably smaller than in the case the initiative is designed and implemented on a larger scale, at
the national level. Efficiency of public spending may, nevertheless suffer because of the same reason.
The magnitude of the benefits generated by the measure to social tenants and construction sector is
expected to be lower, as well.
Direct assistance for people living in “precarious” houses, aimed to improvement of buildings
Due to the lack of adequate information on the existing needs, the measure cannot be implemented
on a large scale under the alternative option. Additional constraints to the implementation of the
intervention derive from the lower capacity to substantiate and finance individual interventions in the
56
absence of adequate information regarding the needs. As with the case of direct assistance under the
preferred policy option individual interventions might reduce the risk of homelessness but the costs do not
seem to justify such non concerted actions except when the local conditions favor them.
Urban interventions in informal settlements/areas in cities/towns
Since the measure requires the amendment of the existing legal framework regarding interventions
on real estate with uncertain property rights, such interventions are limited within the framework of
the alternative policy option, which does not envisage substantial legal framework improvements/
amendments. Individual interventions, on a case by case analysis might be taken by local authorities
(as it has been the case of recent initiatives undertaken in Alba Iulia). No costs and benefits could be
assessed for the measure.
Urban renewal in areas with large number of social housing units
As pointed in other cases, the measure cannot be undertaken in the absence of an urban renewal legal
framework that is not envisaged by the alternative policy option. When individual interventions are
still undertaken at the local level, they confront higher risks of incoordination between urban renewal
and dwelling improvement intervention. Therefore, no costs and benefits could be assessed for the
measure.
Better targeting of measures that address economic impoverished people living in their own
dwellings and those that address people living in social housing
The measure cannot be undertaken outside a comprehensive and harmonized amendment of the
applicable legal framework regarding social housing and social protection. As a consequence, the
measure is not applicable under the alternative policy option and will not generate any costs or
benefits on the stakeholders.
Measures to support tenants below the poverty line
The measure is difficult to implement in the absence of a more clear definition of potential
beneficiaries of social housing. At the local level, adequate criteria to grant access to social housing to
the most vulnerable groups may be designed but no uniformity of the approach at the national level
is ensured. Costs and benefits of better targeting the social housing benefits (to the most vulnerable
groups) are difficult to assess in the absence of a thorough assessment of the needs and of an
adequate legal framework.
Introducing the concept of “social rent”
Implementing the measure is improbable unless imposed by law, based on comprehensive and thoroughly
grounded research and also public debate. Therefore, no costs and benefits can be assessed.
Allowing local authorities to “impose” a certain percentage of social housing units in case of
medium and large housing development projects
The result can only be achieved by amending the existing legal framework correspondingly – not the
Law 114 but legislation pertaining building permits and urban planning -, which is not envisaged by
the alternative policy option. The measure being not applicable will generate no costs and benefits.
Granting financial and/or fiscal incentives for private owners of newly developed or existing
housing units who deliver social housing services
57
The measure cannot be implemented unless the current legal framework is amended correspondingly.
Additionally, attention should be paid to state aid and competition implications. No cost and benefits
are associated yet with the measure.
Further financial support for local authorities that develop social housing programs/projects
Such support schemes that address pro-active local authorities in the field of social housing are limited
to individual initiatives or pilot projects under the framework of the alternative policy option.
Consequently, both expected costs and benefits are limited and the net result expected to be in the
positive range for all stakeholders.
Use of county authorities to technically assist and to distribute state funds to rural authorities
Unless the current legal framework is amended one cannot reasonably expect additional technical
assistance and financial channeling responsibilities to be undertaken by the county authorities.
Therefore, no costs and benefits are associated with the measure.
4.1.1.2. Measures/subjects to be included in a quick assessment of stringent problems
Starting from the existing data and various studies dedicated to specific problems/situations or to
particular groups, the quick assessment of the stringent problems will concentrate on most critical
situations and on the “negative peaks” in the statistics (the most deprived, the most exposed
people/households), furnishing essential information to prioritize the interventions in the Brief Policy
Statement and allowing thus a better ground for formulation of amendments to the existing housing
law.
Given this approach, several measures intended to gain knowledge will be shorter in time and less
encompassing, and some of the capacity building options might be precisely targeted for decided
programs, thus less coherent from an institutional sustainability perspective.
As in the previous section, regarding the actions to be considered in the policy statement, they are
listed below, with comments concerning their effectiveness and efficiency, given the fact that this
approach will not achieve a desired consistency. It has to be pointed out that for this alternative
option, the lack of relevant data might prove also very risky if specific-data collection is not set up53.
Review of existing data
Even if data exist in several sources – mainly in 2011 census but not only there – there has not yet
been done a comprehensive analysis on social housing matters. Under this option only quick
fragmentary analysis for specific groups of already collected data would be possible, the quick
assessment valorizing existing studies/research.
Field-research/in-depth studies
The field research will be directed on the groups that are more vulnerable, capitalizing also on existing
initiatives or projects, with the obvious risk to offer an incomplete view. The short period of time
available (but also the limited resources) might prevent the use of in-depth studies. The correlations
with studies/research in other fields – social protection, urban development and planning, buildings,
environment, and healthcare – will have to restrain to existing studies, the room for inter-disciplinary
approach being small.
53 All the introductory remarks in section 3.1.1.3. are maintaining their validity here too.
58
Stakeholders concerting
The involvement of the stakeholders will be limited in scope and amplitude, albeit some concentration
on very specific issues or particular situations might prove beneficial for agreeing on solutions. There
will be a consistent risk of vocal reactivity from those not included, given the focalization of policy
statement on several groups/situations only.
Institutional capacity improvements
Modifications concerning the institutional framework will be difficult, if not impossible under the
alternative option; partial changes might be possible only within the limits of existing legislation, given
the assumption that there will be no radical changes. Higher expectations might be met by sharing
local institutional changes that took place in towns and rural settlements, which decided to be more
active and have already achieved results.
Technical capacity building
Technical capacity building processes have inherently to be limited in scope, duration and,
subsequently, in effects. The advisable choice under this alternative option will be to use focalized
short training in-site programs and to share as much as possible the existing good practices (see Arad,
Braila, Tulcea, Alba Iulia cases), directly related to the areas/groups/problems chosen for assistance.
Monitoring and evaluation
Monitoring and evaluation will be restricted to use of reduced set of indicators, adapted to the urgent
needs and to the particular situations/groups addressed in the policy statement. Gains in knowledge
might be registered following this pilot processes. However, it is important to have a chapter regarding
monitoring and evaluation introduced in the modified form of Law 114.
4.1.1.3. Measures/subjects in a limited amendment of the current Housing Law No.
114/1996
The alternative options considers maintaining the Law 114 and bringing amendments in order to make
it more effective in accordance with the priorities established by brief policy statement, and based on
the gained knowledge through actions mentioned in the subsection above. This succession of steps –
policy statement priorities and new data and research, developed almost in parallel and modifications
in the law done only afterwards - is intended in order to achieve effectiveness in this option’s
implementation and to avoid the errors generated by arbitrary or fragmentary provisions introduced
or expelled from the law’s body, as was often criticized too had happened in the almost two decades
since Law 114 has been adopted54.
The grounding assumption for this alternative option is that it might be quicker and less a burden to
amend an existing law and to adapt it for priority interventions (according to brief policy statement
options), than to elaborate a comprehensive social housing policy and a new law, coherent with
policy’s provisions, as the main legal base for programs and projects, institutional changes, financial
and fiscal mechanisms, and other operational instruments (like in the preferred option).
Aiming for maximization of strengths of this alternative option – concentration on most deprived
groups and worst situations, and short period of time till first actions/programs/projects are
54 The critic has also been present during the stakeholders’ meetings.
59
implemented – the modifications in the law’s provisions must concentrate only on key issues and
operational matters, creating the base for needed urgent interventions to be carried on appropriately.
Given the numerous modifications brought to Law 114 over time there is the risk that an
encompassing legislation under this alternative option might be limited. It shall be noted that
beneficiaries, types of dwellings, ways of support, might still remain out of the scope of a modified
law. In fact, adopting this alternative option might postpone the moment for a new coherent legal
framework on social housing to be adopted, if so decided.
The subjects/issues related to legal framework already commented in the section dedicated to
preferred option are listed below, with remarks concerning the extent of their usage in the alternative
option situation.
Definition of social housing
Review of the definition of social housing is recommended under this alternative option too, although
the possibility of enlarging only the list of beneficiaries exists, but this will still leave outside
clarification problems related to homeless people and to household without income and with housing
conditions under any standards.
Target groups definition
Some of the most vulnerable groups left out (or addressed improperly/incompletely) today, and
identified in the brief policy statement, might be included via law amendments, but a complete re-
organization of beneficiaries list (and grouping) will not be possible, since that will impose practically
rewriting the law. On the other hand, allowing for possible future additions on groups will be seen
more like a weakness of the amended law, exposing the processes of future modifications to the same
pitfalls that marked many of the changes of Law 114 during last 19 years.
Types of social housing
If only urgent amendments are aimed, the types of dwelling will not change; eventually some
standards might be reviewed, but without a comprehensive argumentation, this may generate the
suspicions of discrimination regarding housing conditions55
Public sector role
Public sector role will remain defined as it is now in the law, under this alternative option.
Partition of responsibilities
Partitions of responsibilities (mainly between central government and local authorities) might be
reviewed – particularly by adding necessary clarifications concerning management of housing stock
and application of criteria to access social housing – but this has to be done within the existing
framework.
Planning instruments
Planning instruments cannot be approached in this alternative option, since both designing new
planning regulations specific/relevant for social housing and linking them better to the ways of
55 Even during the meetings with stakeholders, the review of dwelling’s surface and comfort standards, in order to achieve more efficiency in funds and a wider array of beneficiaries, has been perceived by some NGO’s as room for discrimination
60
intervention on the dwellings/buildings require coordination of legislation in more fields56. On the
other hand, references to the need and structure of local policies concerning the social housing
(probably concentrating on large cities’ situations) might be briefly introduced via amendments to the
law.
Financial instruments
The existing mechanisms of programs financing will remain unchanged; in order to achieve a wider
reach and a more efficient use of resources, some diversification of financing mechanisms might be
envisaged for programs/projects targeting the newly included groups of beneficiaries.
Operational instruments
The existing procedures/instruments will basically remain the same, with possible minor
improvements generated by the shortcomings identified until now, or in relationship with the new
groups addressed.
Partnership arrangements
The partnership mechanisms, as reduced as they are now, will have to be maintained, as addition
might be made only concerning newly identified groups or needs (in the brief policy statement); as a
comprehensive and coherent approach is not possible under this alternative option, new partnerships
arrangements might be vulnerable to “clientele approach”.57
Legal base for technical regulation
Under the alternative option and in accord with the remarks at the beginning of this sub-section, the
base for more sophisticated technical regulation is remaining minimal, as new technical norms or
standards require both in-depth research, and clear legal base to be implemented/imposed (mainly
to county and local authorities, but to construction sector also). If newly established standards/norms
remain isolated for only few situations/groups, lack of coherence risks to generate more imbalances
or even to increase some disparities.
4.2. Financial impacts on public authorities
The same methodology of qualitative assessment of net impact on various categories of stakeholders
as described in section 2.4. was employed for the assessment of the actions and interventions included
in the alternative policy option. In what follows, for comparative purposes, the assessment
conclusions on the whole set of 15 actions and interventions, as adapted to the general framework of
the alternative policy option, are presented.
Regarding the impact of the alternative policy option, the first set of conclusions to be drawn, when
compared with the preferred option, are as follows:
The central government level is also slightly negatively impacted by the policy option.
However, due to the fact that almost half of the measures are not actually applicable under the
assessed option, the magnitude of the net negative impact is lower. In the short run public authorities
56 This comment should be read in correlation with comments regarding urban interventions and renewal operations in the subsection devoted to interventions/way of actions, of this alternative option.
57 Many present corruption investigations unveiled several uses of this type of approach
61
at the central level are expected to bear the costs of the measures while, in the medium and long run,
the benefits, such as the decrease of the social protection related financial efforts, are expected to at
least partially offset the initial financial effort. Overall slightly negative net impact on central
authorities may also be determined by less efficient public spending on social housing, taking into
consideration that the policy option does not suppose a comprehensive approach of the problem.
Conversion of public buildings into social housing units and direct support of tenants below the
poverty line are expected to more negatively impact the public authorities at the central level.
As is the case with the preferred option, the county level public authorities are expected to
be less significantly impacted by the actions and interventions on social housing problem. This is due
to the fact that many actions and interventions are not applicable and that the scope of those
measures that are suitable is more limited. As a general remark, the intermediate level of public
administration is usually expected to be less significantly impacted as the current responsibilities
regarding social housing are also limited and because the alternative policy option does not envisage
major institutional changes. Conversion of existing buildings in county authorities’ property into social
housing might generate the highest costs, although not uniformly distributed in territorial profile.
The local government authorities are expected to be impacted more significantly than the
county level ones, as they bear the bulk of social housing responsibilities, according to the current
legal framework. The financial burden of implementing the actions and interventions will not be
uniformly spread across local public administrations as most of the actions target the most critical
situations and vulnerable target groups. The most “expensive” measure appears to refer to the direct
financial support of tenants below the poverty line, due to the size of the group of potential
beneficiaries.
Table 9. Overall net impact of proposed interventions/ actions on public authorities at the
central level (as per the alternative policy option)
No Interventions or actions Impact on central government (*)
-2 -1 0 NA +1 +2 1 Building of new social housing units 0
2 Acquisition of housing units for social housing purposes 0
3 Conversion of buildings into social housing -1
4 Better definition of the concept of “convenient housing” in terms of housing standards
NA
5 Upgrading the existing social housing stock 0
6 Direct assistance for people living in precarious conditions 0
7 Urban interventions in informal settlements/areas, in cities/towns NA
8 Urban renewal in areas with large number of social housing units NA
9 Tailored support measures for poor people living in own/ social housing
NA
10 Measures to support tenants below the poverty line -1
11 Introducing the concept of “social rent” NA
12 Mandatory percentage of social housing units in medium and large housing development projects
NA
13 Financial and/or fiscal incentives for private owners offering social housing NA
14 Financial incentives for local authorities that develop social housing programs/projects
-1
15 Involvement of county authorities in technical assistance and state funds distribution to rural authorities
NA
Source: authors’ assessment
(*) MRDRPA mainly, but other line ministries, as well (MLFSPE, MPF, MJ, MH etc.)
62
Table 10. Overall net impact of proposed interventions/ actions on public authorities at the county
level (as per the alternative policy option)
No Interventions or actions Impact on county level
authorities (*)
-2 -1 0 NA +1 +2 1 Building of new social housing units NA
2 Acquisition of housing units for social housing purposes NA
3 Conversion of buildings into social housing -1
4 Better definition of the concept of “convenient housing” in terms of housing standards
NA
5 Upgrading the existing social housing stock 0
6 Direct assistance for people living in precarious conditions 0
7 Urban interventions in informal settlements/areas, in cities/towns NA
8 Urban renewal in areas with large number of social housing units NA
9 Tailored support measures for poor people living in own/ social housing NA
10 Measures to support tenants below the poverty line 0
11 Introducing the concept of “social rent” NA
12 Mandatory percentage of social housing units in medium and large housing development projects
NA
13 Financial and/or fiscal incentives for private owners offering social housing NA
14 Financial incentives for local authorities that develop social housing programs/projects
0
15 Involvement of county authorities in technical assistance and state funds distribution to rural authorities
NA
Source: authors’ assessment
(*) county councils, local administration decentralized public services and public utility services providers
Table 11. Overall net impact of proposed interventions/ actions on public authorities at the local
level (as per the alternative policy option)
No Interventions or actions
Impact on local level authorities (*)
-1 -2 0 NA +1 +2
1 Building of new social housing units -1
2 Acquisition of housing units for social housing purposes -1
3 Conversion of buildings into social housing -1
4 Better definition of the concept of “convenient housing” in terms of housing standards
NA
5 Upgrading the existing social housing stock -1
6 Direct assistance for people living in precarious conditions -1
7 Urban interventions in informal settlements/areas, in cities/towns
NA
8 Urban renewal in areas with large number of social housing units
NA
9 Tailored support measures for poor people living in own/ social housing
NA
10 Measures to support tenants below the poverty line -2
11 Introducing the concept of “social rent” NA
12 Mandatory percentage of social housing units in medium and large housing development projects
NA
13 Financial and/or fiscal incentives for private owners offering social housing
NA
63
14 Financial incentives for local authorities that develop social housing programs/projects
1
15 Involvement of county authorities in technical assistance and state funds distribution to rural authorities
NA
Source: authors’ assessment (*) local councils, local administration decentralized public services and public utility services providers
4.3. Economic impacts on businesses and consumers
Compared to the preferred policy option, the alternative one has a more narrow scope in terms of
beneficiaries, as only better targeted actions and interventions are envisaged, where the needs are
more acute. A more precise identification of beneficiaries’ categories is to be established after the
assessment of the most stringent needs under the policy under discussion. Main theoretical
beneficiaries of social housing, however, refer to vulnerable groups. Additional beneficiaries include
the companies active in the construction sector and construction materials and in the tertiary sector,
of construction related services such as, urban planning, architecture, project development, utilities.
As is the case with the preferred policy option, due to the general content of the alternative policy,
adequate information necessary for a comprehensive quantitative assessment is difficult to identify
at this stage.
The same methodology described in section 3.3 was employed to qualitatively assess the package of
actions and interventions included in the alternative option.
Economic impact on targeted social housing beneficiaries
Compared to the preferred policy option, the overall net impact of the measures under the alternative
one is expected to be in the positive range but lower. As already pointed out in section 4.1., eight out
of the total of 15 potential measures are not applicable under the alternative option. Out of the
remaining seven measures, four are expected to have a positive but small impact on beneficiaries:
Building of new social housing units,
Acquisition of housing units for social housing purposes,
Upgrading the existing social housing stock and
Financial incentives for local authorities that develop social housing programs/projects,
One is expected to have a difficult to assess impact due to the impossibility of accurately evaluate the
size of the group of beneficiaries:
Measures to support tenants below the poverty line.
And two measures are expected to have only a neutral net effect on beneficiaries taking into
consideration the expected size of the target groups relative to the size of the social housing problem:
Conversion of buildings into social housing
Direct assistance for people living in precarious conditions
Economic impact on the construction sector and related businesses
Again, taking into account the limited scope of the alternative option, the expected net impact on
construction sector and related businesses is limited when compared to the preferred option, in which
case, more than half of the total number of actions and interventions are expected to generate net
impacts in the positive range, either high or medium-high.
64
Under the alternative option, no action or intervention is expected to have a positive and significant
impact (rated “+2” in the present substantiated note), four measures are expected to generate an
impact in the positive range but of a smaller size (rated “+1” in the substantiation note):
Building of new social housing units,
Conversion of buildings into social housing,
Upgrading the existing social housing stock and
Direct assistance for people living in precarious conditions.
The already identified not applicable eight measures will not generate costs and benefits and three
actions or interventions will have a neutral net impact on the businesses:
Acquisition of housing units for social housing purposes,
Measures to support tenants below the poverty line and
Financial incentives for local authorities that develop social housing programs/projects.
The administrative burden generated by the adoption of the preferred policy option cannot be
assessed at this stage when the exact scope of the actions and initiatives is not clearly defined.
However, if new categories of beneficiaries are added to the social housing target groups the benefits
will supposedly be accompanied by corresponding obligations of the beneficiaries towards authorities.
Public authorities will correspondingly need to manage more information related to the
implementation of the policy options. Such details are critical when deciding the final content of the
policy measure and care should be paid to achieving the right balance between meeting the
information needs and the associated costs of processing it. The administrative burden on the
construction sector is difficult to assess at this stage. Various incentives granted to businesses that
chose to involve in social housing construction projects may be paired by additional administrative
requirements to ensure the efficacy and efficiency of the public expenditures. On the positive side
such incentives may include simplified administrative procedures for the implementation of social
housing construction projects (i.e. simplified and less expensive procedures for obtaining the
construction permits, etc.)
Depending on the exact content of the future financial and/ or fiscal incentives to be granted to
businesses in order to foster their involvement in delivering social housing units or services, the impact
on competition or state aid implication might need thorough consideration.
The alternative option is expected to generate limited to no impact to SMEs.
Table 12. Overall net impact of proposed interventions/ actions on potential/ targeted
beneficiaries of social housing (as per the alternative option)
No Interventions or actions
Impact on (potential) beneficiaries (*)
-2 -1 0 NA +1 +2
1 Building of new social housing units +1
2 Acquisition of housing units for social housing purposes +1
3 Conversion of buildings into social housing 0
4 Better definition of the concept of “convenient housing” in terms of housing standards
NA
5 Upgrading the existing social housing stock +1
6 Direct assistance for people living in precarious conditions 0
7 Urban interventions in informal settlements/areas, in cities/towns NA
8 Urban renewal in areas with large number of social housing units NA
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9 Tailored support measures for poor people living in own/ social housing
NA
10 Measures to support tenants below the poverty line NA
11 Introducing the concept of “social rent” NA
12 Mandatory percentage of social housing units in medium and large housing development projects
NA
13 Financial and/or fiscal incentives for private owners offering social housing
NA
14 Financial incentives for local authorities that develop social housing programs/projects
+1
15 Involvement of county authorities in technical assistance and state funds distribution to rural authorities
NA
Source: authors’ estimations (*) beneficiaries of social housing, including owners of dwellings and individuals belonging to vulnerable groups, for specified actions
Table 13. Overall net impact of proposed interventions/ actions on the construction sector (as per
the alternative policy option)
No Interventions or actions Impact on construction sector (*)
-2 -1 0 NA +1 +2
1 Building of new social housing units +1
2 Acquisition of housing units for social housing purposes 0
3 Conversion of buildings into social housing +1
4 Better definition of the concept of “convenient housing” in terms of housing standards
NA
5 Upgrading the existing social housing stock +1
6 Direct assistance for people living in precarious conditions +1
7 Urban interventions in informal settlements/areas, in cities/towns
NA
8 Urban renewal in areas with large number of social housing units
NA
9 Tailored support measures for poor people living in own/ social housing
NA
10 Measures to support tenants below the poverty line 0
11 Introducing the concept of “social rent” NA
12 Mandatory percentage of social housing units in medium and large housing development projects
NA
13 Financial and/or fiscal incentives for private owners offering social housing
NA
14 Financial incentives for local authorities that develop social housing programs/projects
0
15 Involvement of county authorities in technical assistance and state funds distribution to rural authorities
NA
Source: authors’ estimations (*) The construction sector is divided into construction companies, developers, designers etc.
4.4. Social / Health impacts
The same social and health impact as those briefly described for the preferred policy option in the
current note, section 3.4., are expected to be valid for the alternative policy option, although with
different magnitudes due to the limited scope of the measures proposed (i.e. larger costs and/or
smaller benefits).
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A direct and positive correlation is expected to be found between social housing improvement
measures proposed in the option and health condition, education attainment, access to labour market
and well-being of the beneficiaries. An indirect correlation is, additionally, expected between social
housing access and crime rate (i.e. a lower level for the latter). A positive but less significant
correlation might be expected between social housing improvement and community cohesion.
4.5. Environmental impacts
The environmental impact of the alternative policy option is also expected to be limited due to the
narrower scope of the interventions. As is the case with the preferred option, the sign of the net
impact is dependent on actual construction technologies employed in social housing investments.
Section 5. Public Consultation Process (Art. 7 of Law 52/2003)
Consultation meetings with stakeholders were organized in order to get feedback from interested
parties on the issue of social housing and represent an essential step in the process of gathering
information. The main issues from the three discussions are presented below. A complete list of
participants to the meetings is presented in Annex 2.
5.1. Meeting with Ministry of Labour, Family, Social Protection and the
Elderly
The MRDPA WG discussed with representatives of the Ministry of Labour, Family, Social Protection
and Elderly (MLFSPE) issues related to social housing and cross-sectorial aspects of the RIA analysis on
January 22, 2015. The scope of the meeting was to actively involve the counterparts from the MLFSPE
in the exercise and achieve institutional coordination on a Law that covers aspects that go beyond
only one minister’s responsibility.
The topics brought up during the meeting included the accessibility to social housing, which is
restricted for the worst-off groups, the social housing construction standards that do not include the
housing stock rented by the local authorities to the poor, the fact that the homeless shelters and
protected housing are not covered by the Housing Law, the forced eviction issue that primarily affects
the worst-off groups and the informal settlements problem.
The social housing law, as it is defined currently, establishes financial eligibility criteria up to 1700 lei
income. According to the Romanian income distribution, 90% of the Romanian population is eligible
for social housing if considering only the income criteria. Regarding informal settlements the MRDPA
WG stated that some actions have been taken through the Roma inclusion strategy, however, further
consistent steps and inter-ministerial collaboration (between the MRDPA, MLFSPE and Ministry of
Internal Affairs) are still required in order to have a positive impact.
MLFSPE representatives also defined the social housing as a topic of interest for the ministry and
upcoming strategic documents, such as the social inclusion and poverty reduction strategy will provide
analysis on social housing and actions to be taken. There is an agreement that the recommendations
on social housing must be synchronized with the aspects that will be covered by the Housing Law.
Also, from the social assistance perspective, housing together with employment are the main pillars
for social inclusion.
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As pointed out by the MRDPA WG, the Housing Law and the Social Assistance Law use the same terms
in discussing housing, but with different definitions. The Law 114 represents the framework on
building social housing, but it does not discuss the social aspects related to housing. The MLFSPE
working definition focuses on the housing services that are provided as social assistance, while the
MRDPA focuses on the construction of buildings. The challenge that rose out of the discussions was
how to put together the two working definition so that the legal framework could better respond to
the real needs.
5.2. First stakeholders’ meeting – February 12th, 2015
Within the framework of the current RIA exercise, a public debate was organized together with the
stakeholders on February 12th, 2015, at the World Bank headquarters. The debate focused on
identifying the main issues encountered by the representatives of the Local Public Administration
(LPA) authorities working in the specialized structures, respectively the social assistance
divisions/services as well as those responsible for housing, and the representatives of the non-
governmental organizations (NGO) that carry out activities in the field of social housing.
The first consultation meeting with MRDPA stakeholders took place with the aim of understanding
which are the main problems related to social housing, presenting the problem definition as drafted
by the WG and conclude the objectives and options to be developed in the SN.
Discussions focused on social housing related problems that the stakeholders face during their daily
activities, including the insufficient available housing stock compared to the demand. Both civil society
and local public authorities representatives present at the meeting agreed that this represents the
main problem to be tackled.
Besides the housing stock issue, there is also the lack of available land lot for the construction of new
social housing units and the poor quality of the existing stock. In this aspect, the stakeholders
mentioned that social housing units that respect the standards imposed by the law imply high utility
costs that cannot be covered by the beneficiaries.58
Another topic raised during the discussion was the decentralization of responsibilities, but not of
financing. The social housing construction is now in the responsibility of the local authorities, but no
financial incentives are provided in this sense.
Taking into account the fact that the majority of tenants have low incomes, which leads to huge
overdue debts and evictions, both generating significant problems to local authorities, there is an
actual need to accompany the social housing by other social assistance programs.
58 The larger the surface of the housing unit, the higher the total cost of utilities, especially heating costs. According to PwC (2011), Challenges and Opportunities for the Romanian District Heating System, district heating networks are typically highly inefficient due to outdated technology and poorly maintained equipment. It was estimated that nearly 30% of thermal energy produced in Romania is lost before it reaches consumers. Even with significant subsidies from the state and local budgets, the cost of heating provided by district heating systems in Romania is estimated as 20% higher than in other EU member states. However the observance of thermal insulation standards might partially offset the high utilities costs due to the actual surface of the housing units.
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The meeting ended with a list of proposals to be further considered and clarified, including clarification
of the definition of social housing, beneficiaries and eligibility criteria for social housing, solutions to
increase the number of social housing units, complementary social assistance for people receiving
social housing, and a monitoring system to increase transparency regarding the available stock of
social housing.
5.3. Second stakeholders’ meeting - July 7th, 2015
The second stakeholders’ consultation was organized on July 7th, 2015 and gathered representatives
of the local authorities (municipalities of Alba Iulia, Arad and Braila), central authorities (MRDPA, CPM,
and MLFSPE), academic research, and five NGOs with activities in the area of access to housing, social
protection and minority representation. Annex 2 provides a complete list of participants.
The purpose of this stakeholders’ meeting was to provide feedback on the problem definition and
objectives and to collect opinions and relevant empirical data on the scenarios and the main policy
options included in the SN prepared by the MRDPA WG. In this sense, a briefing note has been
circulated prior to the meeting. The note included the problem definition and proposed scenarios, as
well as a list of instruments and possible types of actions, and a list of several questions to better focus
the debate and favor structured proposals and preferred scenarios.
The municipalities’ representatives described their practices and solutions for particular situations,
focusing on various social groups facing housing constraints: formerly institutionalized youth, poor
families with many children, roma families, families affected by floods, but also homeless. They have
also shared their concerns related to the cooperation between central and local authorities. In this
respect, references were made regarding the need for more adapted regulations, but also for legal
solutions to problems that are today left as a burden for local authorities. For instance, the Court of
Accounts is penalizing authorities for the losses in rent taxes or in utilities costs in social housing.
A recurrent subject has been essential for an integrated approach regarding the needs of housing and
other social assistance measures. All participants agreed that „social diagnosis”, regulated by the
legislation prior to any access to social protection measures, is not well managed due to the lack of
capacity and professionals (public social assistants should have a specialized education background
and the number of these graduates is still insufficient) and lack of interest from some local authorities.
The social diagnosis should cover the health, education and level of revenues dimensions, this assuring
a more comprehensive picture of the situation of the families/households in need. Of particular
relevance are the situations of households where the only source of income is lost because of
unemployment, or of those who have been evacuated once because of delays in paying the utilities
and rent.
There has been a consensus that the Law of Local Public Administration, the Law of Local Public
Finance, the Housing Law, and the Law on Social Assistance should all be amended in order to ensure
a more streamlined process of meeting the social housing needs and to better correlate the
instruments and measures An example of a more coherent approach was developed in some
municipalities, such as Alba Iulia and Braila, for the informal settlement of the roma populations in
the outskirts of (or within) the cities and the deprived areas (poverty pockets). The above-mentioned
local authorities intervened regarding servicing the areas with infrastructure and the legal status
problem was addressed with adequate legal provisions.
The NGOs’ representatives pointed out a series of situations in which the local authorities might be
suspected to have used their autonomy to the limits of discrimination, making in fact more difficult
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the access to social housing for very vulnerable groups. Regarding this, but also other aspects, there
has been a general agreement that the lack of technical capacity at the local level is not the only
obstacle, but also the political (and administrative) will is another very important one, sometimes
making concessions to populist perceptions.
On the other hand, the smaller the local community is, in both urban or rural settlements, the more
difficult is the management of social housing stock, both in technical and financial terms; thus, building
new housing becomes even less attractive.
Section 6. Post-adoption arrangements (for preferred option only)
Adoption of one of the two options generates the need for setting-up the process of achieving the
three components; one related to policy issues, the second concerning legal framework and the third
regarding knowledge and institutional changes.
As mentioned in the description of the two options, the processes related to the components need to
be coherently planned in time. The arrangements described briefly in the next two subsections are
considered for the preferred option.
The policy formulation process and building coherent and updated knowledge have to start first and
might valorize each other: as data gathered and analyzed is better reflecting the realities, as it will be
clearer the structure, the content and the policy options in the formulation of the NPPSH; on the other
hand, as more interaction takes place in policy preparation process, more awareness is gained
concerning what needs more data/research and who may contribute or where relevant empirical
information might be found/articulated. As good and consistent the initial stock of analyzed
information will be, the better the chances to design a more inclusive and research-grounded policy
formulation process will be.
The accurate understanding of amplitude and variety of problems, based on updated information may
also assure realism in what concerns policy goal and its objectives, the balance between various
priorities (in terms of target groups, areas of intervention, types of instruments used).
In the same time, the critical audit of existing legislation and programs and the lucid comparison of
the achieved results with better and better understood needs, may base a realistic approach in
reviewing the social housing legal and regulatory framework. Pointing out that the law is intended
as the base-component of the legal framework for implementation of the policy implies permanent
coordination between what is intended in the policy and the legal available (or possibly to be
proposed) instruments. It is important to remember that a newly revised legal framework may require
changes in other legislation, in order to achieve the necessary harmonization and effectiveness.
Another aspect, this time directly related to the process of implementation of Social Housing Policy
itself, concerns the adequate definition of types of programs and projects that might be considered
(even if as an open list). The options concerning them and the clear understanding of efforts
(resources of all types, technical regulations, and institutional changes) their design and
implementation requires will have to be considered when law is detailed in its provision and when
technical or any other kind of assistance is directed towards local authorities.
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6.1. Implementation arrangements
Obviously, the development processes of the three components have to be coordinated by a core-
coordination team, with responsible managers assisted by operational teams for each of the three.
The stages/actions/events in each of the processes must be carefully scheduled as to achieve: (1)
logical sequences in drafting process of the policy and legislation; (2) best use of data and analyzed
information when available (in stages also) and (3) most effective involvement of all stakeholders’
representatives.
As the policy will have an important impact and the legal framework will have to pass all the
legislation-adoption process steps, the involvement of politicians from the initial stages is critical (and
may also prove sometimes difficult); the cooperation with the media institutions is also vital.
The involvement of experts is important for all three processes (being them most precious for
knowledge building), and attention should be paid to teams/experts assuring multi- and inter-
disciplinary approaches, and able to contribute in bridging some gaps that may occur.
Given the practice of overburdening existing staff with new tasks, it is advisable that the coordinators
and some staff will be exclusively dedicated to these three processes in this preferred option59.
From a different perspective, when considering both the formulation process but mainly the
implementation arrangements for the Social Housing Policy itself (once adopted) several
content/subject sensitive issues should be taken into consideration:
1. The general approach, including definitions of responsibilities, degree of local public
financial involvement, size of eligible projects, and also sophistication of mechanisms/
methods used, have to be differentiated for/adapted to the type and size of settlement –
large cities, small towns, rural settlements;
2. Similarly, the socio-economic situation of the town/village may generate need for more
adapted programs and projects, but also for a difference-sensitive legislation; the links to
both (local) economic development and poverty reduction policies and programs are
critical when distinguishing between “better off” settlements (or those with increasing
potential) and those in stagnation or in decaying state;
3. In the situation of very poor communities, of informal settlements or in the case with
extreme poor without a shelter, the differentiation (and consequently the legal regulation)
might consider some form of providing “crisis transition” or “minimal” housing – with
relaxation of the existing standards – in order to alleviate de bad situation in an
incremental and adapting manner;
4. The problems related to managing and servicing the existing and the newly built social
housing units are critical and solving them requires also approaches tailored to the size of
the stock, the size and the development state of the settlements and particularly the local
public administration institutions capabilities, both in technical and financial terms.
Maintaining a “healthy” social housing stock might be difficult in some situations, but is a
must for social housing policies’ success, at all levels. Achieving that requires a coherent
59 Within the existing organizational chart of the MRDPA, the team might stay within the policy unit, but grouping experts from fields directly involved.
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and sustained process of institutional framework setup and of capacity building, the
changes in legislation being by far not sufficient.
6.2. Monitoring and evaluation activities
The preferred option has been formulated with the goal of contributing as much as coherent/balanced
and as quickly as possible to the reduction of the widening gap between needs and actions intended
to alleviate the housing problems for the vulnerable groups.
Obviously, the improvement in housing conditions registered after formulation of policy, review of
the legal and regulatory framework and implementation of target programs might be synthetically
represented by the number of persons/families who have better housing conditions after
measures/interventions in programs and projects will be implemented.
Monitoring and evaluation activities described here thus address two layers: (a) the monitoring and
evaluation of policy, programs and projects implementation/results and, as this is the subject of this
SN, (b) the monitoring and evaluation of the three inter-linked processes of: policy formulation, review
of the legal and regulatory framework on social housing and adoption procedure and knowledge base
building. To note that institutional changes implemented subsequent to law adoption, and the new
technical regulations required by the law (norms, standards, procedures) are very important
processes, which require themselves separate monitoring and evaluation, for assuring all necessary
conditions for policy implementation.
The importance of specific-design urban indicators for measuring the impact of programs and project
has been highlighted in the description of the option. These sets of indicators might be set-up starting
from largely used indicators in European statistics and in international practice. Three remarks might
be added: (1) the adopted sets of indicators should allow specificity reflection (of the target group, of
its housing needs, of instruments used, etc.) but also should relevantly contribute to the overall
monitoring and evaluation of the progress of the Social Housing Policy as a whole; (2) the indicators
should consider expression not only in net-figures, but also progress registered in relationship with
the size and evolution of the situation of the targeted group within the general population; (3) fewer
but relevant metrics, measured over time, are preferable to many.
For monitoring and evaluation of the policy design and the review of the legal and regulatory
framework, indicators that might be used are: (a) number of stakeholders permanently/periodically
involved in the process, (b) number of specific target-groups that are represented/consulted, (c)
number of local authorities (county or local level) actively involved/consulted in the process, to which
“usual indicators” might be added (number of meetings, number of participants, media-reflections,
etc).
At the end, the success of this three inter-related processes might be measured by the degree of
adequacy of the newly proposed programs and measures to the various needs registered in the area
of social housing.
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Annex 1. Beneficiaries
Program 1. Beneficiaries under the legislation in force
General appraisal Program name Achievements
Program for construction of social housing
Law 114/1996 GD 1275/2000
5603 social housing finalised (1996 - present) for all types of possible beneficiaries, less evicted persons and families, who have a separate program
a) youngsters under the age of 35
Not known:
actual level of the demand nationwide,
how many persons from each category is a
beneficiary of social housing,
share of a certain category of beneficiaries in
total beneficiaries.
Specific programs are carried out for:
evicted persons and families,
ANL program for youngsters under the age of 35 is aimed at renting houses. Youngsters are also aimed by the Law on prevention and fight against social marginalisation No. 116/2002.
b) youngsters coming from foster care institutions who reached the age of 18
c) persons with 1st and 2nd degree of invalidity
d) disabled persons
e) retired people
f) war widows and veterans
g) beneficiaries of provisions of Law No. 341/ 2004
h) beneficiaries of provisions of Decree-law No. 118/ 1990
i) other entitled persons or families.
Program for construction of social housing
meant for tenants evicted from houses
retroceded to former owners
GUO 74/2007
3895 social housing finalised (2007- present)
j) persons and families evicted or who are about to be evicted from houses retroceded to former owners60
Not known:
actual level of the demand nationwide.
MRDPA has data regarding the applications forwarded to those local councils that applied for the program. It can be speculated that the number of potential beneficiaries of the program is continuously decreasing.
Program for construction of
housing for youngsters, for
renting purposes, by ANL
Law 152/ 1998, GD 162/ 2001
31396 housing finalised (2001 – present)
Not known:
level of demand nationwide.
NO PROGRAM Government
Ordinance No. 44/ 2004
- k) refugees asylum applicants
Insufficient information/ No integrated data available. The National Office for Refugees could provide information.
NO PROGRAM Law No. 17/ 2000
- l) elderly61 Insufficient information/ No integrated data available.
60 This category of beneficiaries is also specified in Law 114/1996 but it is treated separately from the perspective of the dedicated program
61 Persons who reached the retirement age as laid down by the law
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Program 2. Potential beneficiaries included in the legislation62
General appraisal Program name Program name
NO PROGRAM Social assistance law 292/ 2011
-
Vu
lne
rab
le g
rou
ps
du
e t
o s
itu
atio
ns
cau
sed
by:
m) disease Insufficient information/ No integrated data available.
n) disability
o) poverty
p) drugs or alcohol addiction
q) other situations leading to economic and social vulnerability
r) homeless
s) persons with no housing
Program 3. Beneficiaries not covered by the legislation
General appraisal Program name Program name
No program No specific legislation
- t) unemployed, particularly long-term ones
For certain categories and situations (victims of natural disasters, of technological disasters, persons with disabilities, Roma population) there are specific governmental programs or punctual support instruments (government reserve fund). More accurate and update information is needed.
u) monoparental families, particularly households managed by single women
v) elderly with no pension (particularly those alone)
w) numerous or young families with dependent children
x) ethnic minorities
y) persons evicted for other reasons than retrocession
z) other persons dislocated
aa) victims of natural disasters - floods, mass displacements (earth slide, collapse), earthquakes.
Legend: Information unavailable at MRDPA level Information partially available
62 Who, under the social assistance law No. 292/2011, art. 6, letter p), are entitled to housing, yet for whom there is no clear reference to social housing
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Annex 2. List of Participants in Consultation Meetings
Name Institution/Organization
Alexandru Alexe
Ministerul Muncii, Familiei, Protecției Sociale și Persoanelor Vârstnice (Ministry of Labour, Family, Social Protection and the Elderly)
Flori Costea
Laura-Adina Dobrescu
Olivia Rusandu
Carmen Ivănoiu Primăria Muncipiului București (Bucharest City Hall)
Mihai Enăchescu
Oana Vianu
Florica Dinu-Lucan Primăria Muncipiului București, Sector 2 (Bucharest City Hall, District 2)
Nicușor Moldovan Primăria Alba Iulia (Alba Iulia City Hall)
Adriana Memete Primăria Arad (Arad City Hall)
Nicoleta Mihaela Oancea Directia de Asistenta Sociala Braila (Social Assistance Directorate, Braila)
Stefana Zibileanu Asociația Municipiilor din România, Direcția de Asistență și Protecție Socială Tulcea (The Association of Romanian Municipalities) Mihai Cojocariu
Claudiu Runceanu “Ion Mincu” University of Architecture and Urbanism in Bucharest
Florina Presada Centrul de Resurse pentru Participare Publică (The Resource Center for Public Participation)
Florin Botonogu Policy Center for Roma and Minorities (Policy Center for Roma and Minorities) Raluca Negulescu
Eugen Lucan Asociația Angel (Angel Association) Claudiu Asaftei
Ioana Vlad Frontul Comun pentru Dreptul la Locuire (Common Front for Housing Rights)
Irina Zamfirescu Active Watch – Agenția de monitorizare a presei (Active Watch – Media Monitoring Agency)
Lucija Popovska Habitat for Humanity România (Habitat for Humanity Romania)
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