Housing Reforms in Czechia and Poland

In Czechia, affordability is a particularly acute issue as incomes have not kept pace with increases in house prices. While the supply of new housing has in part responded to demand, increasing construction costs and restrictive land-use governance have also contributed to the spike in house prices. There are limited rental options, and the not-for-profit segment of the housing market is under-developed. The development of new affordable housing providers, spatial planning and tools to harness land value uplifts resulting from public infrastructure provision and changes in land-use regulation (known as “land-based finance tools”) could be used as a resource to provide affordable housing, in line with the 2021 Housing Strategy. The housing taxation system could also be reformed to improve equity and affordability.

In Poland, access to affordable housing is a central policy challenge, notably for low- and middle-income households and people in vulnerable situations. Just over a third of households fall into a “rental gap”, in that their income is too high to qualify for municipal housing but too low to reasonably afford a mortgage or market rent. In parallel, ongoing efforts to shift from institutional to community-based care, in the broader context of the deinstitutionalisation of support services, have increased demand for long-term housing solutions with access to social and health care for individuals who need tailored support (e.g. older people, people with disabilities or with a mental health disorder, young people leaving foster care, people experiencing homelessness, and migrants). The arrival of over a million refugees from Ukraine since 2022 has further increased housing demand.

To address these challenges, Czechia and Poland can consider a series of sequenced country-specific housing reforms. For Czechia, reform efforts should focus on the implementation of the 2021 Housing Strategy goals through measures to strengthen policies and institutions to increase housing affordability and investment. This would include broadening the scope of providers of affordable and social housing, improving spatial planning and land use, and reforming property taxes. For Poland, policies should centre on boosting the supply of affordable housing, providing tailored housing solutions for individuals requiring social and health support, and facilitating adaptations of dwellings for older people and people with disabilities. Some reforms are already underway in both countries, while others would benefit from improved co-ordination (across ministries, levels of government, and other actors in the housing sector), as well as targeted investment to expand the supply of affordable and supported housing.

The Czech rental market is relatively developed, with 25% of households living in a rented dwelling in 2024, but affordable rental housing options are limited. Social rental housing accounted for only 3.6% of the dwelling stock in 2021. Since 2014, Czechia has provided subsidies to develop social rental dwellings (sociální bydlení) financed by the European Regional Development Fund (ERDF), targeting households with acute housing needs (e.g. people experiencing homelessness, people in substandard dwellings, etc.) or at risk of developing acute housing needs. More recently, the amendment to the Act on the State Investment Support Fund (Státní fond podpory investic – SFPI) introduced a legal definition of affordable rental housing, establishing rules for determining and indexing affordable rent and defining target groups for affordable rental housing developments supported by national financing schemes. Building on these definitions, establishing a universal operational definition of affordable and social housing, with defined eligibility criteria and rent-setting mechanisms, could provide a cornerstone for all support schemes.

There are currently no specialised providers of affordable and social housing such as not-for-profit or limited-profit providers – which was a key priority of the 2021 Housing Strategy. Social and affordable housing is mainly provided by municipalities. Social housing was provided by non-governmental organisations in only 5% of all surveyed municipalities according to the 2021 OECD-Ministry of Regional Development housing survey. Half of these units had been built within the previous few years, indicating that this was a relatively recent approach with upscaling potential.

While the main historical not-for-profit housing actors in Czechia are housing cooperatives, they do not have a mandate to provide affordable housing (neither for rent nor purchase). Cooperative shares can be sold at market prices. Additionally, not-for-profit organisations and NGOs provide crisis housing, mostly funded from social-service subsidies from the Ministry of Labour and Social Affairs. Access to these housing services is reserved for households at high risk of social exclusion (e.g. high indebtedness) and relies on short-term rent agreements (1-6 months). Introducing a legal status for not-for-profit or limited-profit housing providers, with a clear mandate and defined responsibilities, could boost the development of social and affordable housing. These providers could also rent on the market to provide below-market rental housing to low-income households, following a practice already existing in Poland (see below).

Rigidities in local planning tools limit their use to boost affordable housing supply in high-demand areas. While municipalities can design their Local Territorial Plans (LTP) and Regulatory Plans (RP), the “one-size-fits-all” nature of the former and the burdensome process to amend the latter limit their usage in terms of housing development. Streamlining administrative processes and reforming spatial planning documents could help accelerate the development of affordable housing. This could include quicker processes for building permits (e.g. online application and approval procedures) and amendments to LTPs, especially for larger cities with higher housing demand, and streamlining the RP public consultation process.

Fragmented responsibilities and a lack of coordination between different levels of government, policy sectors and municipalities undermine the ability of local governments to leverage land use planning for the provision of housing. Increasing cooperation between the central government and municipalities could, for instance, allow bottom-up amendments of the Regional Development Principles to respond more efficiently to emerging needs. Fostering horizontal sectoral coordination, for instance by coordinating housing and spatial strategies, could also remove a key barrier to affordable and social housing development. Horizontal coordination between land use and other policy fields, such as transport and the environment, is also needed to reach broader planning goals of sustainable and compact urban development. Finally, boosting inter-municipal coordination could help small municipalities pool resources and build capacity.

Land-based finance tools – including developer obligations and strategic land management –are rarely used to support housing affordability objectives. In Czechia, municipalities make some use of developer obligations to cover the public infrastructure costs associated with private developments, but rarely to finance affordable housing development. Further, municipalities could implement strategic land management and other land-based finance tools to boost affordable housing development, for instance through joint ventures with private developers or not-for-profit housing providers.

The limited human and technical capacity of local governments in terms of spatial planning and land-based finance hinders the efficiency of these instruments. Securing sufficient expertise and staffing related to land use planning remains a challenge for all public authorities in Czechia, including among Building Authorities (public bodies conducting building proceedings) and in large cities such as Prague. Some municipalities lack digital, technical and conceptual expertise, hindering the implementation of land-based finance tools or the digitalisation of building permit processes.

Unlike almost all other OECD countries, Czechia levies property taxes based on the size and location of land or buildings (area-based property tax). This approach fails to approximate market values, increasing the regressivity of the tax system (Figure 2).

Moving to a value-based taxation system could help limit the regressivity of property taxes. The implementation of value-based property taxes would require precise up-to-date information on the dwelling stock, which is currently only collected through the census every 10 years.

Property tax revenues are allocated to local governments but are limited. Indeed, Czechia raised 0.5% of total tax revenue across all levels of government from property taxes in 2022 (against 1.9% and 2.8% on average in the EU and the OECD, respectively), an equivalent of 0.2% of GDP – the second-lowest share in the OECD. Increasing property taxes could increase municipalities’ resources for affordable housing development. The increase should be planned, gradual and include provisions for low-income households to ensure acceptability.

The number of vacant dwellings has increased over the past decade, including in high-demand areas. In 2021, 16% of dwellings were vacant in Czechia. The Czech authorities could consider a targeted tax on vacant housing in areas where housing demand is high to incentivise property owners to put them back on the market, potentially coupled with renovation support if needed. OECD experience has shown that such measures require appropriate enforcement and monitoring mechanisms.

Capital gain exemptions and mortgage interest deductibility (as imputed rents are not taxed) contribute to reducing affordability by pushing up prices when supply is limited. Czechia could consider capping capital gain exemptions on primary residences, adjusting the gains taxed for inflation, and removing capital gains exemptions for secondary homes. Continuing to phase out mortgage interest relief for owner-occupied housing could help further limit demand and avoid distorting the market towards home ownership.

Poland is currently rethinking its strategic approach to housing. The National Housing Programme (Narodowy Program Mieszkaniowy – NPM) set out strategic housing objectives in 2016; it was repealed in March 2025. A new set of housing measures, Keys to Housing, will be incorporated into the Medium-Term Development Strategy to 2035 (Średniookresowa Strategia Rozwoju Kraju do 2035 roku). Among the proposed measures is a planned increase in public investment in municipal and social rental housing, along with continued efforts to preserve, renovate and modernise the existing social housing stock over the long term. Looking ahead, it could be especially relevant for the Polish authorities to define strategic policy priorities for affordable housing as part of a long-term national housing strategy, along with corresponding actions and resources to achieve them. Particular focus areas could include exploring ways to increase investment in affordable housing, along with complementary reforms to increase the supply of affordable housing (e.g., incentivising municipal housing development, stimulating the private rental market, etc.). Such efforts can, in turn, help vulnerable groups – particularly individuals with limited health and social support needs – access suitable housing.

In addition, there are opportunities to mobilise the private housing stock for social purposes. Social rental intermediation schemes involve a variety of measures to help tenants access the private rental market at affordable rent levels and can complement the formal social housing stock. Measures can include, among others, introducing guaranteed rent or deposit schemes; facilitating property procurement by negotiating leases with landlords on behalf of social tenants; managing properties on behalf of landlords; and providing training and support for landlord-tenant mediation. These efforts can be facilitated by social rental agencies (Społeczne Agencje Najmu – SAN), which exist to a limited extent in some Polish cities and play an intermediary role between property owners and social tenants. Such measures are especially relevant in Poland, where the tenancy system is complex, and eviction proceedings last several years on average. As a result, property owners are often hesitant to lease dwellings to low-income households and other people in vulnerable situations, due to perceived risks relating to non-payment and/or property damage, as well as stigma. Further, the potential to renovate and repurpose vacant residential and, where feasible, non-residential units could be evaluated as a means to expand the availability of suitable housing solutions. Social rental agencies could play a role in this process.

Fragmented governance is a central barrier to the provision of integrated housing solutions with tailored social support. Indeed, as in many countries, housing and social services are treated as distinct policy areas in Poland, in terms of both governance and funding schemes, making it harder to implement integrated solutions. There is limited coordination across ministries and government agencies for the provision of housing and social support for vulnerable groups. The Ministry of Economic Development and Technology oversees the development of housing infrastructure; the Ministry of Family, Labour and Social Policy oversees the provision of social services and supported and training housing, but lacks competencies relating to affordable housing. The Ministry of Development Funds and Regional Policy plays a key role in the management of EU funds, which is an important funding source for affordable and supported housing schemes.

Reducing the fragmentation between housing and social services could enable service providers to meet housing and social needs in a more efficient, coordinated way and help individuals access the integrated support they need (Figure 3). To this end, the Polish authorities could consider creating an inter-ministerial body with a dedicated staff, budget, and operational mandate to oversee integrated housing policies and social supports for vulnerable groups.

Supported and training housing, which couples housing with extensive social services, are essential to the ongoing deinstitutionalisation process in Poland, but the current stock does not meet demand. While temporary shelter and accommodation (e.g. reception centres, night shelters, warming houses) are available in some cases, more needs to be done to strengthen the provision of tailored, long-term housing solutions with integrated social and health supports. Supported housing allows people with diverse needs to live independently while receiving appropriate care, while training housing provides individuals with housing and limited services to support their transition from institutional to independent living. Increased funding for such models could help meet demand, which has persistently exceeded supply. In particular, Housing First, which is a specific form of supported and training housing for people experiencing homelessness, remains at the grassroots level in Poland, currently only available in a limited number of communities, while its importance is recognised in the National Programme for Combating Poverty and Social Exclusion. Housing First solutions have proven their efficacy in a broad range of contexts and could be scaled up to other municipalities.

Targeted measures could be introduced to prevent homelessness and housing instability among vulnerable households. Vulnerable groups face a heightened risk of housing instability and homelessness. Support for households facing economic challenges and at risk of losing their homes – including support to manage debt and prevent evictions – could be scaled up. The Polish authorities could also enhance housing support for migrants by building on the one-stop-shop model of the recently established Centres for Migrant Integration (CICs). People leaving the care system, notably youth transitioning out of foster care, often struggle to make the transition to suitable, independent housing. Finally, there is scope to improve individuals’ access to information including by introducing housing advisory services in Centres for Social Services and / or Social Assistance Centres.

As in most OECD countries, the number of people with disabilities is expected to increase in Poland, as the population ages and chronic diseases affect a larger share of the population. The old-age dependency ratio (i.e. the share of the population aged 65 or older as a percentage of working-age population (20-64)) is expected to more than double to 70% by 2060 – well above the OECD average and EU-28 average for the same period.

Poland has made significant progress in improving the accessibility of public spaces through the Accessibility Plus (Dostępność Plus) programme. In addition, the Ministry of Infrastructure and Construction published accessibility standards for people with disabilities, based on the concept of universal design, to provide guidance to developers in designing accessible housing.

However, there is considerable scope to improve the accessibility and adaptability of private dwellings. Buildings with fewer than five storeys are not obligated to have lifts, and the requirement to install lifts in buildings with five or more storeys applies only to new construction. As a result, a large share of multi-family buildings remains without lifts with no obligation to retrofit them (although there are plans to introduce such obligation, as well as funding to support it). Introducing a legal definition of accessible and adaptable housing could provide a common basis to assess the extent to which a housing unit enables a person with disabilities to enter, move around and exit the dwelling (accessible dwelling), or can easily accommodate future renovations to improve accessibility (adaptable dwelling).

Public support schemes are available for housing adaptations. However, many people are not aware of these schemes. Moreover, the eligibility criteria do not allow for preventive adaptations to avoid accidents and preserve individuals’ autonomy (Figure 4). For instance, funding to remove architectural barriers in homes, and / or to purchase rehabilitation equipment are only available to people with valid disability certificates. Poland could consider expanding subsidy programmes to include preventive support to facilitate home adaptations for older people without disability certificates. Information on existing schemes could be also improved.