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HOUSING in ROMANIA Project Co-Financed from the European Regional Development Fund Through the Operational Programme Technical Assistance (OPTA) 2007-2013

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HOUSING in ROMANIA Project Co-Financed from the European Regional Development Fund Through the Operational Programme Technical Assistance (OPTA) 2007-2013 Public Disclosure Authorized HOUSING IN ROMANIA Project co-financed from the European Regional Development Fund through the Operational Programme Technical Assistance (OPTA) 2007-2013 Public Disclosure Authorized Public Disclosure Authorized TOWARDS A NATIONAL HOUSING STRATEGY Public Disclosure Authorized Regional Development Program 2 | Harmonizing Public Investments Component 4: FINAL REPORT (1) August 27, 2015 i ii Contents Abbreviations and Acronyms .............................................................................................................................................. v Currency Equivalents ........................................................................................................................................................... vii Acknowledgements ............................................................................................................................................................. viii EXECUTIVE SUMMARY ......................................................................................................................................... 1 I. INTRODUCTION ................................................................................................................................... 28 1.1 Background .................................................................................................................................................... 28 1.2 Definitions ....................................................................................................................................................... 29 1.3 Report Structure........................................................................................................................................... 29 1.4 Methodology .................................................................................................................................................. 30 PART A: SITUATION ANALYSIS ...................................................................................................................... 32 II. INSTITUTIONS, LAWS, AND GOVERNMENT PROGRAMS ....................................................... 33 2.1 Relevant stakeholders in the housing sector ................................................................................... 33 2.2 Legal framework and relevant laws ..................................................................................................... 38 2.3 Housing programs in Romania ............................................................................................................... 48 III. HOUSING CHARACTERISTICS ......................................................................................................... 52 3.1 Basic attributes ............................................................................................................................................. 52 3.2 Access to infrastructure ............................................................................................................................ 61 3.3 Urban planning and infrastructure ...................................................................................................... 62 3.4 Exposure to natural hazards ................................................................................................................... 67 IV. HOUSING MARKET ............................................................................................................................. 71 4.1 Housing stock ................................................................................................................................................ 71 4.2 Market trends ................................................................................................................................................ 72 4.3 Housing finance ............................................................................................................................................ 80 4.4 Rental housing .............................................................................................................................................. 84 4.5 Heritage buildings and neighborhoods .............................................................................................. 87 4.6 Private developers ....................................................................................................................................... 89 4.7 Property valuation and taxation ............................................................................................................ 93 4.8 Land markets and property registration ........................................................................................... 94 4.9 Housing restitution ..................................................................................................................................... 95 V. HOUSING AFFORDABILITY .............................................................................................................. 97 5.1 Cost of living ................................................................................................................................................... 97 5.2 Price ................................................................................................................................................................... 98 5.3 Housing affordability ............................................................................................................................... 101 VI. HOUSING FOR THE POOR AND VULNERABLE ......................................................................... 108 iii 6.1 Overview on Social Marginalization and Housing Deprivation ............................................. 108 6.2 Strategic and Institutional Setting ..................................................................................................... 133 6.3 Review of Past and Current Initiatives ............................................................................................ 135 VII. ENERGY EFFICIENCY AND ENVIRONMENTAL SUSTAINABILITY ...................................... 139 7.1 Housing stock characteristics and energy consumption .......................................................... 139 7.2 Heating systems, tariffs, and “energy poverty” ............................................................................ 142 7.3 Mass thermal insulation programs .................................................................................................... 145 7.4 Other relevant EU-related initiatives ............................................................................................... 148 7.5 Financing for Energy Efficiency .......................................................................................................... 149 7.6 Market participants and capacity ....................................................................................................... 150 PART B: TOWARDS A HOUSING STRATEGY ............................................................................................. 152 VIII. KEY FINDINGS .................................................................................................................................... 153 8.1 Poor quality of existing housing ......................................................................................................... 158 8.2 Seismic risk .................................................................................................................................................. 159 8.3 Inadequate housing for poor and vulnerable groups ................................................................ 161 8.4 Inefficiencies in the housing market ................................................................................................. 164 8.5 Inadequate legal and institutional framework ............................................................................. 167 8.6 Public housing assistance not targeted or prioritized ............................................................... 168 IX. KEY RECOMMENDATIONS ............................................................................................................. 178 9.1 Legal Reform ............................................................................................................................................... 180 9.2 Institutional Reform ................................................................................................................................ 185 9.3 Financing ...................................................................................................................................................... 189 9.4 Urgently initiate seismic retrofitting of structurally unsafe residential buildings ........ 195 9.5 Prioritize improvement of old housing and neighborhoods .................................................. 197 9.6 Prioritize housing assistance to the poor and vulnerable ....................................................... 201 9.7 Improve the social housing program ................................................................................................ 206 9.8 Leverage private sector for affordable housing production ................................................... 208 9.9 Improve the current thermal insulation program ...................................................................... 216 Bibliography ...................................................................................................................................................................
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