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Wolfgang Amann Romanian Housing Legislation – Need for new start?

Real Estate Insight Convention Bucharest, 11 October 2007. Wolfgang Amann Romanian Housing Legislation – Need for new start?. Institute for Real Estate, Construction and Housing Eichendorffgasse 4/8 A 1190 Vienna/Austria +43 1 968 6008 office@iibw.at www.iibw.at.

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Wolfgang Amann Romanian Housing Legislation – Need for new start?

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  1. Real Estate Insight ConventionBucharest, 11 October 2007 Wolfgang AmannRomanian Housing Legislation – Need for new start? Institute for Real Estate, Construction and Housing Eichendorffgasse 4/8 A 1190 Vienna/Austria +43 1 968 6008 office@iibw.at www.iibw.at

  2. Institute for Real Estate, Construction and Housing, Vienna www.iibw.at Status Quo in Housing Provision (2006) Romania EU • Useful floor space per capita ca. 20m² 36m² • Dwellings per 1000 inhabitants 374 448 • New construction per 1000 inhabitants 1.5 4.8 • Yearly Household Income (2003) € 1 500 € 22 100 • Monthly wages € 350 € 2 550 • Housing as % of private consumption 23% 22% 2 Real Estate Insight Convention, Bucharest, 11 October 2007

  3. Institute for Real Estate, Construction and Housing, Vienna www.iibw.at Deficient housing construction(Housing stock and housing construction 2005 per 1.000 inhabitants) Re.: Data for Slovenia and SEE countries as for 2003Source: Housing Statistics in the EU (2005, 2006); Statistik Austria; UNECE; PRC (2005), IIBW Real Estate Insight Convention, Bucharest, 11 October 2007 3

  4. Institute for Real Estate, Construction and Housing, Vienna www.iibw.at Insufficient supply for middle and lower income groups dampens upturn in housing construction Source: Housing Statistics in the EU (2005); Euroconstruct 12/2006, IIBW Real Estate Insight Convention, Bucharest, 11 October 2007 4

  5. Institute for Real Estate, Construction and Housing, Vienna www.iibw.at Development of housing policy in CEE/SEE Source: Housing Statistics in the EU, Nat. Stat. Offices, PRC Bouwcentrum, IIBW 5 Real Estate Insight Convention, Bucharest, 11 October 2007

  6. Institute for Real Estate, Construction and Housing, Vienna www.iibw.at Status Quo in Housing Finance • Mostly upscale condominium housing construction • Very short investment horizon • Banking products for retail financing, but hardly for institutional financing • Social housing = municipal housing developed by ANLfinanced from the state budget • Shortage of supply for lower and middle income groups, for young households and for migrants to the cities 6 Real Estate Insight Convention, Bucharest, 11 October 2007

  7. Institute for Real Estate, Construction and Housing, Vienna www.iibw.at Status quo in housing law • Casuistic housing legislation with gaps in many fields • Legal vacuum particularly for rented condominiums • Well established condominium law, but difficult conditions for maintenance and repair • Inconsistent housing subsidy schemes • Gaps in consumer protection 7 Real Estate Insight Convention, Bucharest, 11 October 2007

  8. Institute for Real Estate, Construction and Housing, Vienna www.iibw.at EU accession as opportunity • Standards of EU jurisdiction in housing promotion • European best practice • European funding for refurbishment and housing construction • Consolidation of the Romanian housing law with the best European regulations as benchmarks 8 Real Estate Insight Convention, Bucharest, 11 October 2007

  9. Institute for Real Estate, Construction and Housing, Vienna www.iibw.at Some major aspects of a new Romanian Housing Law • 6 bodies: • General Housing Law • Rent Law • Condominium Law • PPP Housing Law • Housing Management and Maintenance Law • Housing Promotion Law • A new structural approach • which promises stability in the structure and flexibility in detailing 9 Real Estate Insight Convention, Bucharest, 11 October 2007

  10. Institute for Real Estate, Construction and Housing, Vienna www.iibw.at Aspects of a new Rent Law • Obligatory written contracts • Liberal regulation on duration of tenancy • Rent regulation for rented condominiums build before 1990, social housing and PPP-Housing • Liberal rent determination mechanism following the German model with comparative rents • Rent increase by CPI or by comparative rents • Similar mechanism for PPP housing with markdown • Rent comparison lists provided by municipalities 10 Real Estate Insight Convention, Bucharest, 11 October 2007

  11. Institute for Real Estate, Construction and Housing, Vienna www.iibw.at Aspects of a new PPP Housing Law • Explicit public service obligation • European Best Practice from The Netherlands and Austria • PPP Housing Associations are private companies, they ought to make profits, but limitation of withdrawal of profits • Strict criteria of control and supervision • In revers: privileged access to subsidies, tax relief • Possible owners: municipalities, state authorities, unions, charity organisations, companies, financial institutions, private persons • Ties: limitation of profits, limitation of sale of shares, external controling • Assets: benefits for the own clientel, unrealised gains, secondary business 11 Real Estate Insight Convention, Bucharest, 11 October 2007

  12. Thank you for your attentionamann@iibw.at Vienna: „Integrative Housing“ Institute for Real Estate, Construction and Housing Eichendorffgasse 4/8 A 1190 Vienna/Austria +43 1 968 6008 office@iibw.at www.iibw.at 12

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