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Country Report on Croatia

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Country Report on Croatia This project has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under grant agreement no. 290694. TENLAW: Tenancy Law and Housing Policy in Multi-level Europe National Report for CROATIA Authors: Ana Jakopič, Mirela Žnidarec Team Leader: Špelca Mežnar National Supervisor: Tatjana Josipović Peer reviewers: Mark Jordan, Arnt von Bodelschwingh and Fabio Padovini 1 National Report for Republic of Croatia PART 1 Part 1: Housing Situation and Housing Policies Table of contents 1. Current housing situation ................................................................................................................. 3 1.1. General features ..................................................................................................................... 3 1.2 Historic evolution of the national housing situation and housing policies...................................3 1.3 Current Situation.........................................................................................................................25 1.4 Types of Housing Tenure: Rental Tenures .................................................................................. 35 1.5 Other general aspects................................................................................................................. 46 2. Economic urban and social factors ............................................................................................... 48 2.1 Current situation of the housing market .................................................................................... 48 2.2 Issues of prices and affordability .......................................................................................... 49 2.3 Tenancy contracts and investment....................................................................................... 56 2.4 Other economic factors ........................................................................................................ 60 2.5 Effects of the current crisis ................................................................................................... 61 n2.6 Urba aspects of the housing situation ...................................................................................... 64 2.7 Social aspects ........................................................................................................................ 69 3. Housing policies and related polices............................................................................................. 70 3.1 Introduction ................................................................................................................................70 3.2 Governmental actors .................................................................................................................. 73 3.3 Housing policies .................................................................................................................... 74 3.4 Urban policies ....................................................................................................................... 76 3.5 Energy policies ...................................................................................................................... 77 3.6 Subsidization ...............................................................................................................................80 3.7 Taxation.......................................................................................................................................85 4. Regulatory types of rental and intermediate tenures .................................................................. 89 4.1. Classifications of different types of regulatory tenure ..............................................................89 4.2. Regulatory types of tenure without a public task......................................................................92 4.3. Regulatory types of tenures with a public task.......................................................................... 94 *** 2 Part 1: Housing situation and housing policies 1. Current housing situation 1.1. General features In 1990 Croatia declared its independence from the former Socialistic Federal Republic of Yugoslavia. After the Declaration of independence the Yugoslav Army aggression and occupation of large parts of the country followed. The first decade following the independence was subsequently significantly marked by the war and the post-war events. After the war large scale post-war rebuilding followed. The post war rebuilding programmes encompassed different groups of citizens; war veterans, IDPs and refuges (mostly Serbian minority members). After the Independence two important processes on the housing market were undertaken: privatisation of socially owned housing stock and denationalization; both deeply affecting the housing market. Firstly, the stock of apartments previously owned by the companies and the state was sold to the holders of the “housing right” for about 10-15 % of its market value, resulting in 82,9 % of apartment users as legal owners (Census 2001). Thereafter, the denationalization returned the apartments and homes to its rightful owners, from whom the apartments and houses were confiscated in the beginning of socialistic era, following the end of World War II. In 1996, the new Housing Act was passed, which regulates the rights and duties of both market and “protected tenants”. Citizens who could not afford to buy (or in some cases did not have the right to buy) the apartments, in which they were leaving in in times of socialistic era, were categorized as “protected tenants” paying the “protected rent”. The right to protected rent was given to its holders permanently, but such a right cannot be sold or inherited. At present there exists no state housing policy in Croatia. In the late 90s three large housing programmes were launched: Long-Term Financing of Residential Construction with Government Subsidies, Government Incentive to Housing Savings and Publicly Subsidised Residential Construction. Up until today, there is no research on the economic and social impacts of these three programmes. Systematic approach towards housing in Croatia is still lacking. 1.2 Historic evolution of the national housing situation and housing policies As can be found in relevant literature and research materials, the first texts on this subject date back to the end of nineteenth century and deal with the housing situation in Zagreb. Housing matters emerge relatively late in comparison to the developed European countries. The lack of literature and information ends with the beginning of the World War II. This historic review will be divided into three periods: first, from the 1900s to till the World War II, second, the Socialistic period and, third, the Independence and the transition period. 3 From the 1900s till the end of World War II At the beginning of the twentieth century, the authorities in Zagreb began to deal with the problems of the housing situation in the city caused by the fast growth of its population. From 1918 to 1941, significant changes in the housing standard are recorded and housing policy became a recognizable part of the social policy. Some forms of protected tenants existed; social housing was built by the civil organizations and co-operatives, with the city of Zagreb acting as a partner to housing co- operatives in extensive projects of building settlements with family houses. Significant increase observed in construction of housing unit blocks at the end of 1920s was connected with cheap (affordable) housing loans.1 At the end of this period, especially during the World War II confiscation of housing was practiced. Zagreb city centre2 Socialistic Period After the end of the World War II, Croatia became a part of socialistic Federal People’s Republic of Yugoslavia (FPRY3). Housing situation and housing policy were influenced by the change of the social, legal and political regime. ‘Housing policy in the socialist period was under distinct ideological pressure.’4 State declared its own responsibility and care for the housing situation of citizens in the Constitutions5. World War II left many people homeless and caused massive migration from the rural to the urban areas. In the post war period, quick renovation and construction of indispensable new housing was needed. However, due to the lack of finances, the scope of such endeavours, especially the construction of new housing, was small. To alleviate housing crisis, ‘the Yugoslav authorities assumed the power to determine the amount of rent in order to protect the tenants, who were mostly 1See more in: G. Bežovan, ‘Stanovanje i stambena politika’ in Socijalna politika Hrvatske, ed. V. Puljiz (Zagreb: Pravni fakultet Sveučilišta u Zagrebu, 2008), 338. 2Taken from: http://danas.net.hr/hrvatska/seizmolozi-znamo-da-ce-zagreb-pogoditi-potres-od-65- stupnjeva 3The FPRY became Socialistic Federal Republic of Yugoslavia (SFRY) with the new Constitution from the 1963, Official Gazette of SFRY, No. 14/63. 4Bežovan, ‘Stanovanje i stambena politika’, 339. 5See: Article 20 of the Constitution of FPRY from the 1946, Official Gazette of FNRY, No. 10/46 and Article 242 of the Constitution of SFRY from the 1974, Official Gazette of SFRY, No. 9/74. 4 homeless or displaced persons. Furthermore, the state retained the exclusive power to allocate residential units to people with housing needs’6. This also applied to the private property and private
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