Today's article is a continuation of the series, dedicated to the topic of getting your own M. In today's article, I will focus on the issue of flats built within the framework of a Social Building Society (TBS). I will also touch upon the issue of state support for obtaining one's own flat, within the framework of the so-called Mieszkanie+ programme. Below you will find answers to two fundamental questions concerning this issue. Namely, what conditions must be met in order to be able to apply for the TBS flats and those offered by the 'Mieszkanie +' programme? How does TBS function?
At the same time, I encourage you to read the previous article in this series: How do you get council housing?
And now I invite you to read this entry.
TBS housing and the "Mieszkanie +" programme - Towarzystwo Budownictwa Społecznego
To begin with some formal information and legal background.
The rules for the operation of a Social Building Society are set out in the Act of 26 October 1995 on Certain Forms of Support for Housing (Journal of Laws 2018.1020), hereinafter: the Act. TBSs usually operate in the form of capital companies, i.e. a limited liability company and a joint-stock company.
In accordance with Article 27 para . 1 of the Act:
, "the object of the society is to build residential houses and operate them on a rental basis. Societies may also acquire residential buildings and carry out repairs and modernisation of facilities."
When TBS decides to carry out a construction project, it handles the construction procedure and, subsequently, the lease of the premises.
Where does TBS get the funds for such an investment?
70% of the investment costs are covered by the National Housing Fund, which provides TBS with preferential loans to enable the construction of new flats. TBS must have the funds for the remainder of the project.
Where does the other 30% come from?
The rest of the amount needed is the so-called participation contribution. It is paid by those wishing to dispose of the TBS premises, i.e. the potential tenants.
TBS housing - who can benefit?
TBS housing is intended for persons demonstrating, among other things, an adequate income and the absence of a legal title to housing in the same locality. The income criterion is indicated in detail in the aforementioned law. It is linked to the average monthly household income of the TBS housing applicant for the year preceding the year in which the housing lease contract will be signed.
The average monthly income varies from province to province. It also depends on the size of the household, as well as on the period in which the TBS flat was built and whether participation was required.
For the time being, the conclusion of a lease agreement for a TBS flat is conditional on paying at least 10% of the construction costs of the TBS flat. The income of a single person cannot exceed 1.2 of the average gross monthly salary in the national economy in the province by more than 10%. For two-person households, 65% excess is allowed. The more children, the higher the limit. With multiple families, an additional 40% per child is allowed.
Rent
An undoubted advantage of TBS is the low rent. Its amount is limited by law. According to the Act, the rent in existing TBS flats cannot exceed 4 % of the unit's replacement value per year, and in those yet to be built 5 %. The conversion factor is understood as the average construction cost of 1 m2 of usable floor area of residential buildings. The amount of rent varies from city to city. Unfortunately, you have to reckon with the fact that it will be more expensive in a large city such as Warsaw or Wrocław.
Advantages and disadvantages of TBS
Pros:
- The cost of an own contribution to a TBS is much lower than the cost of a mortgage;
- The finishing costs of TBS flats are included in the rent;
- In the new TBS flats, tenants can decide for themselves what their future home will look like.
Disadvantages:
- the tenant will never become the owner of the rented flat; under current legislation, flats are and will continue to be owned by Housing Associations;
- uninteresting location of TBS (due to cost containment);
- TBS may increase a tenant's rent if the tenant's earnings increase.
However, it is worth noting that the Ministry of Infrastructure has recently announced changes to the TBS Act. These are to introduce the possibility of taking over ownership of flats. According to the ministry's proposal, the tenant would have to repay the loan for the flat, taken out by the TBS at the National Housing Fund. However, the state would guarantee a low interest rate on this loan. We will keep an eye on any government proposals in this regard and share information with you.
TBS housing and the "Mieszkanie +" programme - Housing Plus as an alternative to TBS?
Finally, I would like to present to you in a few more words the new government project on housing support, i.e. Mieszkanie+. At the same time, I would like to point out that this project is not fully completed, hence some of the information may soon change.
For whom?
The Mieszkanie Plus programme, according to the assumptions of the Act on the National Housing Programme, can be used by any individual. There is no set upper age limit, as was the case with Mieszkania dla Młodych (the previous government programme). In the first instance, rent subsidies are to be targeted at people with low incomes and families with many children. The option to lease a flat under M+ will be available to anyone who undertakes to pay monthly rent.
M+ is a proposal for those who cannot afford to buy their own home, while at the same time the amount of their earnings is too high for them to be able to apply for housing from, for example, the municipality.
Priority for Housing+ is given to people:
- with relatively lower incomes;
- raising a child with at least a moderate disability;
- raising at least one child;
- who have not previously held ownership of a single-family house, a flat or a cooperative ownership right to the premises;
- migrating to another city for work;
- who have repatriate status;
- over 65 years of age,
- having a recognised degree of disability of at least moderate level.
Where will investments be made?
Buildings under this government programme are being constructed throughout the country, taking into account both smaller and larger towns. Some housing projects are already under construction, these include: Wałbrzych, Pruszków and Biała Podlaska. The first city where Mieszkanie Plus units have been completed is Jarocin.
As can be seen from the above information on the introduced criteria, obtaining a flat under the Mieszkanie+ programme may prove difficult. Before you decide to apply for a flat under this programme, it is worth consulting an expert who will help you prepare the appropriate documentation.
