Cooperative apartments are not being built, cooperatives are troubled by laws

Prague - Housing cooperatives in the Czech Republic are currently not experiencing a flourishing growth. New cooperative apartments are being built only minimally, and co-operators face inadequate legislation, allegedly poorly designed grant programs for renovations, or high heating costs. Martin Hanák, spokesperson for the Union of Czech and Moravian Housing Cooperatives (SČMBD), said this today. The union, which represents 17 percent of all apartments in the Czech Republic, is celebrating the 40th anniversary of its founding this year.
  The number of member cooperatives of the union and the apartments they manage has been steadily decreasing in recent years. Last year, there were almost 14,000 fewer apartments in the union's cooperatives than in 2004. The final number of 703,437 apartments in 2008 still represents approximately 17 percent of the total housing stock in the Czech Republic. The number of cooperatives within SČMBD has also decreased from 799 to 635.
  The cooperative form of ownership is currently not appealing even to builders of new housing. "Cooperative construction is taking place, or rather not taking place, at the rate of dozens of new apartments per year, and is therefore unable to compete with the sharp methods of commercial developers," noted Hanák.
  Rather than new construction, the most urgent task for cooperators is repairing and modernizing the housing stock. Each year, they must invest between 20 billion and 30 billion crowns into these efforts. However, repairs and modernization of all panel houses, where most cooperative apartments are located, could require up to an additional 400 billion crowns, estimated the union's representative.
  The form of state support for repairs of panel houses does not correspond to their needs, according to cooperators. "The success of the Panel program (State Housing Development Fund) is currently being torpedoed by the Ministry of the Environment's efforts to enforce unnecessarily strict energy limits that go beyond economic reason; by their parameters, they aim to turn panel houses into low-energy buildings, which, however, is unrealistic without absurdly high costs," said Hanák. The program has 4.2 billion crowns available this year.
  However, the Green Savings program of the State Environmental Fund is also not providing a solution according to SČMBD, which wants to distribute up to 25 billion crowns for insulation and energy savings. "Poorly set conditions of the program threaten that if they are not thoroughly revised, this program will end in a complete fiasco," said Hanák. He joined the criticism of construction firms, which object that due to strict conditions, only a fraction of interested parties have received grants so far. But even if state support for repairs of panel houses was running smoothly, Hanák believes the main portion of funding will still depend on regular commercial loans.
  Rising heating prices are also causing headaches for housing cooperatives, which reportedly increase by up to 20 percent annually in some locations. "In these areas, the threshold of justifiability for such prices has long been exceeded, and yet the state and the Energy Regulatory Office do not respond," said the union's representative. "People are trapped in local monopolies and have no way to pressure suppliers to lower prices. A clear trend is the effort to detach from central heating supply and build their own boiler room," he added.
  Despite the current setbacks, cooperators remain optimistic about the future. "Housing cooperatives certainly have a future, both as owners of the housing stock and in cases of apartment transfer as their managers. Experience long shows that housing under cooperative management is the most economical variant in the housing market, targeted at low and middle-income groups," concluded Hanák.
  SČMBD is the successor of the Czech Union of Housing Cooperatives, which was established at the founding congress in February 1969. The union benefited during this period from the waning liberal atmosphere of the Prague Spring of 1968. According to the union's own sources, it was created on partially democratic principles, initiated by the bottom-up efforts of cooperative officials, and not by decision of central authorities. In the following period, however, democratic principles of housing cooperatives were gradually suppressed, leading to the involuntary integration of cooperatives and the creation of large cooperative conglomerates, often against the will of their members.
 
Development of the number of member cooperatives of SČMBD and the apartments they manage in the years 2004-2008:

Year	Number of SČMBD member cooperatives	Number of apartments managed by SČMBD member cooperatives
2004	799	717,197
2005	685	717,672
2006	682	716,966
2007	651	704,258
2008	635	703,437