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Country Profiles on the Housing Sector Albania

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Country Profiles on the Housing Sector Albania ECONOMIC COMMISSION FOR EUROPE Geneva COUNTRY PROFILES ON THE HOUSING SECTOR ALBANIA UNITED NATIONS New York and Geneva, 2002 NOTE Symbols of United Nations documents are composed of capital letters combined with figures. Mention of such a symbol indicates a reference to a United Nations document. * * * The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries. ECE/HBP/130 Copyright © United Nations, 2002 All rights reserved Printed at United Nations, Geneva, Switzerland UNITED NATIONS PUBLICATION Sales No. E.03.II.E.18 ISBN 92-1-116832-5 ii CONTENTS Page Foreword v Preface vii Chapters I. FRAMEWORK FOR THE HOUSING SECTOR TRANSITION 1 A. General information B. Economy C. Population – urbanization D. Government housing policy E. Recent developments in housing policy II. EXISTING HOUSING STOCK AND NEW CONSTRUCTION 17 A. The housing stock and its characteristics B. The adequacy of the housing stock C. The construction industry D. House prices and need III. INSTITUTIONAL FRAMEWORK 31 A. Public institutions B. Local authority institutions C. Private sector and non-governmental organizations and associations IV. LEGAL FRAMEWORK 49 A. Constitutional framework and proprietary rights B. Decentralization of competence from central to local government C. Legislation on privatization of public housing and housing restitution D. Legislation on housing subsidies E. Legislation on financing and mortgages for housing F. Legislation on urban planning, landownership and transfers and real estate registration V. FINANCIAL FRAMEWORK 61 A. Housing economics B. Housing finance systems C. Social housing and allowances D. Private housing sector and affordability CONCLUSIONS AND RECOMMENDATIONS 75 Bibliography 99 iii LIST OF TABLES 1. Main macroeconomic indicators 1990 to 2001 2. Percentage of population in rural and urban areas according to income quintiles in 1998 3. Population 4. Population by selected districts and cities in 1989 and 2001 5. Number of households 6. Total estimated stock in 2001 by age 7. Company declarations 8. Permit data for housing 9. Flats per building, 1998 10. Comparison with countries in transition 11. Size of dwellings, 1989 12. Households lacking amenities, 1998 13. Construction activity 14. Construction materials trade 15. Homelessness 16. Administrative units 17. Economic result by economic activity 18. Comparative economic indicators, 2000 19. Source of funds for housing in the public sector 20. Prices and earnings 21. Deposit and lending rates, 1993-2001 22. Bank Assets Resolution Trust credit portfolio 23. An international comparison of income distribution 24. Household income and income per capita, 1996 25. Average dwelling price LIST OF FIGURES I. Map of Albania – administrative boundaries and major cities II. Percentage of population in rural and urban areas according to income quintiles in 1998 III. Population distribution IV. Rural and urban distribution of households V. House construction permits by Prefecture VI. Market prices by area VII. Ministry of Territorial Development and Tourism VIII. Housing Department of the Ministry of Territorial Development and Tourism IX. Ministry of Local Government and Decentralization X. Structure of Shkodra Municipality XI. Laws and Government Decrees related to housing policy iv FOREWORD The Country Profiles on the Housing Sector are intended to assist the Governments of countries with economies in transition in improving the performance of their housing sector while promoting sustainable development. They analyse trends and policy developments, and make an overall assessment of the political, economic and social framework of the sector in the process of reform. This work was initiated by the UNECE Committee on Human Settlements in the early 1990s in response to requests from its member States. The studies are carried out by international teams of experts in cooperation with governmental bodies, non-governmental organizations, local authorities and the private sector. Through a process of broad consultations, the experts carry out a comprehensive analysis of the housing sector, and draw conclusions and make recommendations to help policy makers develop strategies and programmes. This Country Profile on the Housing Sector of Albania is the seventh in the series published by the United Nations Economic Commission for Europe’s Committee on Human Settlements. I hope that this Country Profile will prove useful to all those with an interest in Albania’s housing sector – policy makers and legislators, government officials, academics, NGOs and other national stakeholders, as well as international organizations, including lender and donor organizations, technical assistance agencies, or private sector investors. Brigita Schmögnerova Executive Secretary v PREFACE The Country Profile on the Housing Sector of Albania started with a preparatory mission by the secretariat in December 2001. The research mission of the international team of experts took place in February 2002. Albanian experts responded to the queries and requests of the international team during and after the mission. The project’s expenses were covered by extrabudgetary funds provided by the Governments of the Netherlands, the Czech Republic and the United Kingdom. The successful conclusion of the project would not have been possible without this generous support. The previous studies in this series were on: Bulgaria, published in 1996 (ECE/HBP/101); Poland, published in 1998 (ECE/HBP/107); Slovakia, published in 1999 (ECE/HBP/112); Lithuania, published in 2000 (ECE/HBP/117); Romania, published in 2001 (ECE/HBP/124); and the Republic of Moldova, published in 2002 (ECE/HBP/125). Other work carried out by UNECE in Albania includes an environmental performance review (EPR) in 2001-2002. It provides recent information about Albania, including on its built environment and urban development. The follow-up process to both projects is important for inter-sectoral policy implementation in the country. Two other UNECE projects related to housing may also prove useful to Albania and other countries in transition: (i) the Guidelines on housing condominiums for countries in transition, and (ii) the Guidelines on housing finance systems for countries in transition. This Country Profile on Albania is also available on the web site of the Committee on Human Settlements http://www.unece.org/env/hs/cph/welcome.html. INTERNATIONAL EXPERTS Mr. Veikko VASKO (UNECE secretariat) Project manager and draft coordinator Ms. Agnieszka HADA (UNECE secretariat) Chapter I Mr. Malcolm BOORER (United Kingdom) Chapter II Ms. Elena BEJENARU (Republic of Moldova) Chapter III Mr. Martin LUX (Czech Republic) Chapter IV Ms. Maja MILJANIC BRINKWORTH (Malta) Chapter V The above experts are the principal authors of the chapters mentioned. Parts of their work have, however, been incorporated into other chapters for better cohesion and clarity. The conclusions and recommendations are a result of joint team work. NATIONAL EXPERTS Ms. Doris ANDONI Director of Housing Department, Local coordinator Ministry of Territorial Development and Tourism Ms. Krisavgji STEFA Head of Business Statistics Section, Institute of Statistics, INSTAT Ms. Ilda BOZO Chief of Statistical Section, Ministry of Social Affairs and Labour Mr. Xhavit DAJCI Chief of Housing Section, Ministry of Territorial Development and Tourism Ms. Vjollza BAZAITI Specialist, Housing Section Ministry of Territorial Development and Tourism Ms. Shpresa KARANXHA Specialist, Budget Department, Ministry of Finance vii viii Chapter I FRAMEWORK FOR THE HOUSING SECTOR TRANSITION This chapter is intended to give a general from a State-controlled to a market economy were picture of the Albanian housing sector as it has reflected in the main economic indicators such as developed over the past decade, against the the rapid GDP growth rates of 9% a year in 1993- backdrop of the socio-economic transformation 1996 and the reduction of inflation from 226% in during this period. It will present major 1992 to 7.8 % in 1995. Initially Albania was demographic changes and their impact on housing considered to be a model transition economy, but developments and policies as well as the restricting analyses to indicators alone may not give consequences of the economic transition and a full picture of the situation. Macroeconomic structural reform on the housing sector. This indicators would not reflect the undeveloped chapter will also address related government financial sector and many economists feel that the policies (or lack thereof) during the transition apparent rise in living standards was due to either period, and outline current attempts by policy remittances from abroad or to illegal activities. makers to revise existing housing policies. Some of the issues raised will then be discussed in detail The controversial “pyramid” deposit in the relevant chapters. schemes soared in 1996 as an alternative to the non-existing banking system. An interest rate of A. General information 15 to 100% was offered on three-month deposits. Interest to early investors was paid from funds Albania is a country with a total area of collected from later deposits.2 The collapse of the 28,748 km2 and a total population of 3,087,159. system in 1997 was followed
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