Czech Radio: Businesses get rich on residential hotels for the poor

Czech Radio has reported that the business dealings of those who own the residential hotels that charge disproportionately high fees for single rooms, often featuring showers and toilets located in common hallways and restrictions on who can visit their guests, could easily be called trafficking in poverty. The owners of these businesses rely on the fact that their clients are people who cannot find normal rental housing and that the state will contribute toward paying their bills. For most people living in such places, they are the last resort when fleeing the ghetto.

"People want to get out of the locality. Mainly, they want to have some sort of dignified accommodation, because most of them are living in unsuitable conditions. That means their apartments are overcrowded and their hygienic conditions are not as they should be," Denisa Urbánszká, a field social worker with the People in Need organization, described the situation in the Předlice neighborhood of Ústí nad Labem. "Several tenants in one building with rotted-out ceilings, no front door and broken windows told me that they pay the landlord CZK 6 000 per month for a one-room apartment."

The landlord never repaired the building and never found substitute accommodation for these people, who ended up living in a residential hotel. People in Need is helping everyone who wants to leave the socially excluded locality look for new accommodation, but Urbánszká says this is very hard when they are labeled "Romani from Předlice": "Most of these families have many members. Most of them have seven children or more. It also has to do with the fact that they are Romani."

When there is nowhere else to go, people end up in residential hotels where the conditions are worse than in ordinary apartments, but the costs are higher. In one such hotel in Ústí nad Labem, for example, each adult pays CZK 5 000 per month and each child costs an addition CZK 1 000, which raises the fee paid for a room according to the number of people in the family.

Celestina Hadravová of the Ústí nad Labem Labor Office confirms this: "The contracts for accommodations there are expensive. They are overpriced. They bring us, for example, contracts where the rent is around CZK 6 000 per person for one room. Then someone else brings us a contract for CZ 7 000 per person – this doesn’t even correspond to the rent that is customary in that locality."

People usually go to the Labor Office to be paid their social housing benefit, which is calculated on the basis of normative housing costs.

"It depends on the number of residents in the municipality, and then on the number of people in the family… For a family of five, the normative costs are established at CZK 13 565 per month maximum. However, most of the families have other sources of income – they get social support benefits and other income, so their housing costs may never reach the maximum," Hadravová explains.

Even when the state does not pay the whole amount charged by the owners of the overpriced residential hotels, these higher costs raise social benefit expenditures overall. Many "guaranteed" reports of welfare abuse are now making the rounds on the internet as a result.

"One such report said that one woman on welfare was collecting CZK 33 000 monthly… However, the people writing these reports don’t tell their readers that this money is the only income for an eight-member family, for example, and that they live in a residential hotel where they pay CZK 18 000 in rent every month," commented Petra Klingerová of People in Need.

Klingerová said the problem is not mass abuse of welfare by people who need it, but abuse by businesses exploiting the system. Czech Radio reports that it was also interested in the opinion of some of those who own residential hotels in Ústí nad Labem, but they refused to be interviewed.