Czech Republic has 160 municipalities with significantly more people in material distress than elsewhere thanks to trafficking in poverty
There are 160 municipalities in the Czech Republic where significantly more people are in material distress than in other parts of the country. The number of impoverished inhabitants who draw welfare in these places has risen exponentially over the last 15 years compared to elsewhere. That is the finding of a report on exclusion from the housing market during the last year that has been published by the Platform for Social Housing and the For Housing (Za bydlení) initiative. According to its authors, development in these localities may be related to what is called trafficking in poverty, where tenants live in overpriced, substandard housing. They are unable to access housing on the regular rental housing market.
The report is based on data from the territorial disbursal of housing contributions and housing subsidies as well as the subsistence contribution. Households which spend more than 30 % of their net income on housing may draw housing contributions. Housing subsidies are for persons in material distress and are meant to ease their expenditure on housing so they will have enough money left over for subsistence. The contribution for subsistence corresponds to the difference between an impoverished person’s income and the minimum income needed to stay above the poverty line once housing costs are deducted.
In the Czech Republic, according to the report, between the years 2008 and 2023, the number of people living in households drawing the subsistence contribution rose by a factor of 1.14 on average. In 160 municipalities, however, it rose by a factor of five. Those drawing the housing subsidy rose by an average factor of 1.38, but in those same 160 municipalities it rose by a factor of 8.1.
“It surprised me that we identified 160 municipalities where the population of those drawing the housing subsidy had risen eightfold. If we hear from a municipality that such a business project [the business in poverty] exists there, they aren’t making it up,” said analyst Jan Klusáček, a co-author of the report.
In 160 municipalities, an average of 12 people per 1,000 inhabitants was drawing a housing subsidy. In the 40 municipalities with the highest growth in the number of impoverished residents the average was 18 persons per 1,000 inhabitants. The average for the Czech Republic as a whole was five persons per 1,000 inhabitants. The contribution for subsistence is drawn on average by 13 inhabitants out of 1,000, but in the 160 municipalities it is drawn by 31 people per 1,000 inhabitants, and in the 40 most-afflicted of those localities it is drawn by 44 persons per 1,000 inhabitants.
According to Klusáček, people facing housing precarity who draw welfare frequently live in overpriced, substandard housing and are unable to rent any other kind of housing. “For CZK 20,000 [EUR 800] per month a family gets one room in a residential hotel where the common kitchen and bathroom are shared by all the units on that floor, or they get an apartment full of mold, or an apartment without windows. They pay the same price as if the housing were standard. As a consequence, the rent on a one-room apartment with a kitchen nook is the same as the rent charged elsewhere in that same town for a three-room apartment with a full kitchen,” Klusáček said.
According to the authors of the report, it is impossible to tell from the data whether this poverty in the municipalities being researched is intergenerational, or whether the people in material distress have newly relocated to these localities. In order to map the trafficking in poverty, it would be necessary to analyze this further in the locations “where the extremely impoverished population is concentrated”, the experts say in their report.
According to experts on social issues and organizations aiding people in need in the Czech Republic, the problem of the business in poverty could be addressed by adopting a housing law to regulate the rental market. Past governments have promised to institute such norms. A previous coalition government formed by ANO, the Christian Democrats and the Czech Social Democrats (ČSSD), led by Prime Minister Bohuslav Sobotka (ČSSD), failed to reach consensus on such a law. The subsequent government of ANO and ČSSD, supported by the communists and led by Prime Minister Andrej Babiš (ANO), replaced drafting such a law with subsidies and a set of 15 steps which were never undertaken. A bill on housing has now finally been submitted by the current coalition cabinet of Prime Minister Petr Fiala (Civic Democratic Party – ODS). It is not yet clear in what form it will be adopted.
