Why bother with homeownership? This is a question many people in the Republic
of Moldova are asking themselves. In a country where private ownership is
still a relatively new concept and homeownership is equated with extra costs
and worries, many former tenants may wish they had remained just that - tenants.
This is one of the findings just published by the United Nations Economic
Commission for Europe (UNECE) in its Country Profiles on the Housing Sector
- Republic of Moldova, the sixth in a series of country reports which examine
the trends in the housing sector in countries in transition and put forward
recommendations.
Since independence, most housing has been privatized in the Republic of Moldova,
but its upkeep has become minimal and haphazard. The benefits of an open housing
market are at present available only to the exceptionally wealthy, who are
few and far between in a country where the average monthly wage is $33. In
these circumstances the poor prefer to stay where they are, as tenants in
government-owned housing, not paying for services, energy or maintenance.
In the current economic climate there is little that the government can do.
People need to be housed; they cannot be thrown out.
The amount of housing is not the main problem. The prevailing energy crisis
and the results of the rapid privatization of the housing stock with no subsequent
solutions for maintenance of the existing buildings are more burning issues.
The condition of Moldova's housing stock is the single most crucial housing
problem facing the Republic. Another is the remarkable disparity in housing
standards between the urban and rural areas, where over half of Moldovans
live in compactly built villages. In rural areas, only 1% of homes have running
water. Many homes are affected by the risk of earthquakes or landslides.
Housing is a highly integrated business. For example, the problems of housing
maintenance can be resolved only when certain financial and legal constraints
are removed. The housing market will flourish only with a subtle mix of policy,
institutional, legal and financial measures. With 88% of housing owned by
private individuals, Moldova is committed to using market mechanisms to provide
decent homes for its people. Financial, institutional and legal reforms over
the past 10 years have been geared to making this possible. One particular
success has been the establishment of a national cadastre for the registration
of all property ownership and transactions.
The main problem is purchasing power. At present only 1-2% of households
can afford a new home. Purchases are nearly always for cash. The housing loans
that do exist are short-term, usually for up to three years. Interest rates
are excessive, typically 30% a year. The key to resolving this problem is
the development of practical financial measures underpinned by policy, legislation
and regulation to gradually improve confidence in the housing market. The
report also recommends that the housing sector should be made more attractive
to institutional investors, such as private insurance companies, pensions
funds, investment companies and credit unions.
In the short and medium term, housing conditions in Moldova may deteriorate
particularly for the poorest people. Homelessness may become a problem as
the worst apartment blocks become uninhabitable; as rent and service charges
rise to economic or market levels; and as courts begin to repossess homes
and evict residents for serious non-payment. The State should, therefore,
consider creating a social housing safety net for households unable to solve
their own housing problems through the normal housing market. A social housing
safety net should be available to all, and be means-tested.
Housing amenities (Percentage of all dwellings)
Source: Department of Statistical and Sociological Analysis.
Housing quantity (Number of dwellings per 1000 persons)
Source: Statistical Yearbook of the Republic of Moldova.
Number of completed dwellings
A Country Profile is a strategic analysis of a country's entire housing
sector. The study covers institutional, legal and financial frameworks
for the housing sector and analyses the existing housing stock as well
as the socio-economic transition in order to make recommendations for
national policy formulation. As a voluntary exercise, the Country Profile
study is undertaken at the request of the country itself. An international
team of experts from all over Europe, including countries in transition,
cooperates with a national team during and after field missions to the
host country. The report with its recommendations is published as an official
United Nations document and distributed to the UNECE Committee on Human
Settlements and to all 55 UNECE member countries. This will serve all
those in national housing and allow for international comparison. The
report is also available on the Internet http://www.unece.org/env/hs/welcome.html
For further information, please contact:
Christina von SCHWEINICHEN, Deputy Director
UNECE Environment and Human Settlements Division
Palais des Nations, office 340
CH - 1211 Geneva 10, Switzerland
Phone: +41(0)22 917 23 88
Fax: +41(0)22 917 01 07
E-mail: [email protected]
or:
Veikko VASKO
UNECE Environment and Human Settlements Division
Palais des Nations, office 328
CH - 1211 Geneva 10, Switzerland
Phone: +41(0)22 917 19 27
Fax: +41(0)22 917 01 07
E-mail: [email protected]
Ref: ECE/ENV/02/04