While the public is astonished over Czech prep school students' pizza gesture to Romani children, social exclusion of the impoverished remains a profitable business

Since midsummer, instead of the trolleybus line that has traditionally served this part of the city, it has been served by a bus where passengers can enter strictly through the front door only. A transportation assistant and a local patrol officer are always on board. The transit authority justified this change by claiming it would have to completely cut services to the neighborhood otherwise, as drivers were refusing to work on that line after a series of attacks on them there, both physical and verbal.

One month later, after attacks against their delivery drivers were also reported, one of the many pizzerias in Ústí nad Labem stopped delivering to the neighborhood. Mojžíř was in the headlines, and not for the first time. College prep students in Prague announced a collection to send pizza to the children living there. That gesture, which the students themselves called a “happening”, will resolve nothing in and of itself, as the Mojžíř housing estate’s problems are much deeper. They have been swelling in size for years, and the main role in them is played by trafficking in poverty.

A profitable business with its roots in the past

How did one of the most recently-built housing estates in Ústí nad Labem become a ghetto? The first step toward the current situation was the massive privatization of the apartment stock there in the 1990s. The units there were sold for a song, and not just to their then-tenants, but also to big players in the real estate market.

Mojžíř has since met with a similar fate to that of the Předlice quarter on the other side of the city, which is the seat of the northwestern Ústecký Region. Gradually, impoverished families from all over the Czech Republic started moving there. The business functioned as follows: If somebody wanted to lucratively lease (or sell) either an apartment or a whole apartment building in Prague, they would arrange for the current tenants to be housed in an excluded locality such as Mojžíř in particular, for example. That started the cycle of trafficking in poverty in motion. When coexistence problems started transpiring between the majority-society residents of the ever more excluded housing estate and the “newcomers”, the majority-society residents, some of whom had lived there for many years, moved away, and when they did so, their units were snapped up by the traffickers in poverty. The selling of these units continues to this day.

Just a few years ago it was possible to purchase a 50-meter square unit on the housing estate for CZK 100,000 [EUR 4,000]. Today that same unit would sell for half a million to a million crowns [EUR 20,000 – EUR 40,000], so the return on such “investment” has been quite high.

For a large proportion of those inhabiting the housing estate today, the Czech state pays their rent through welfare benefits – in 2020 alone, the total amount of the housing contributions and housing supplements that went to Jindřicha Plachty Street on Mojžíř was CZK 12 million [EUR 486,000], and today the amount is even higher.

Apartment units appropriate for investment

As of 5 September 2023, there are 23 apartment units on Jindřicha Plachty Street being offered for sale by real estate offices. That street is the heart of the excluded locality on the housing estate. The prices range from half a million to a million crowns [EUR 20,000 – EUR 40,000], depending on their square area. The state of repair of these units usually does not impact their sales price. The units for sale are owned either by cooperatives or by single owners.

What these advertised units have in common is that they are appropriate for investment, including for a single investor, because the monthly yield from renting them is, on average, almost CZK 7,000 [EUR 285]. The units are said to be in good repair without requiring any further investment – and even though that is not the case, the demand for them outstrips the supply. Yes, an address on Jindřicha Plachty Street is truly a desirable locality for a specific group of investors.

A change compared to previous years is that cooperative-owned units on the housing estate are now also for sale. That is most probably a result of the fact that realtors are gradually running out of the units with a sole owner, three-quarters of which are currently owned by firms or individuals other than those who are actually using them.

The owners don’t live in Ústí nad Labem

Now we come to another paradox about the excluded neighborhoods of Ústí nad Labem. The owners of these units have nothing to do with the city, to a great degree, besides being in real estate there.

Of the 616 units on Jindřicha Plachty Street, as of June 2023 there were 437 that had a sole owner, 167 owned by the Rozvoj [Development] cooperative, and 12 owned by the City of Ústí nad Labem. Of the 437 units with a sole owner, 335 are in the hands of either firms or individuals whose registered headquarters or residences are not in the Mojžíř neighborhood – or not in Ústí nad Labem at all. In other words, more than three-quarters of the units on this most problematic street serve their owners as profit-making enterprises. In some apartment blocks with their own entrances more than 90 % of the units are owned and used in this way.

In 2020, the proportion of such units was still “just” roughly 65 %, so it is possible to say that as an investment locality, Mojžíř has in recent years continued to attract investors, and the current real estate offices’ offerings mentioned above correspond to that.