On January 19, 2021, the Act amending the law on certain forms of support for housing construction entered into force. Under the mysterious appellation we find the so-called Housing Package – one of the last projects proposed by Poland’s former Deputy Prime Minister Jadwiga Emilewicz. The amendment introduces new regulations, more favourable for municipalities, pertaining to the financing of housing investments, as well as a number of changes aimed at improving investment processes in the development of municipal and social housing. The changes also covered Social Housing Associations (Towarzystwa Budownictwa Społecznego, or TBS for short), and included, inter alia, the “participation settlement” – that is, the option of redeeming tenant participation after five years of lease – and the codification of the mechanism of “obtaining ownership” in new investment projects.

There is another change worth mentioning: despite the protests of the TBS community, it was decided that the nomenclature that has been used since 1995 should now be abandoned. The already existing entities may retain their names, but the TBSs established after the amendment enters into force will be entered in the official registers as Social Housing Initiatives (Społeczne Inicjatywy Mieszkaniowe), abbreviated as SIM. This new nomenclature is a good opportunity to take a look at the TBSs, which have been present on Polish soil for twenty-five years now. What exactly are they, what was their genesis, and how did they work during the first quarter of the century? And is there more to the name change than just the desire to rebrand the old trademark?

New order, old problems

The Polish social rental housing program started in earnest in 1995, after the Act on certain forms of support for housing construction entered into force, although its origins date back to 1992.

In July 1992, economist Irena Herbst, an expert from the Institute of Housing Economy, started working at the Ministry of Spatial Economy and Construction. The new Deputy Minister, politically connected with the Solidarity movement-derived Democratic Union, was given a difficult task: to organize the transition-related chaos and create regulations for the emerging housing market, which at the time resembled – as she herself calls it – a wilderness.

At the beginning of the 1990s, there were no real estate development companies in the format that we know today; housing cooperatives continued to be the main investors in the field of multi-family housing. Banks did not grant mortgage loans to private households – although this is a very common tool today, back then there were no laws that would regulate the granting of such loans. The systemic transformation did not eliminate the housing crisis that had lingered for decades: the fledgling Third Republic of Poland inherited from the People’s Republic of Poland a dramatic overcrowding and a massive demand for housing.

A few months before Irena Herbst was appointed Deputy Minister, Jacek Kuroń (then a member of the Democratic Union) asked her to analyse the situation at that time, but also to propose solutions that would help overcome the housing crisis. Together with the economist Andrzej Bratkowski, who would later become the Minister of Spatial Economy and Construction, Herbst created the Memoriał mieszkaniowy [‘housing memorial’ or ‘housing agenda’]. The document, issued by the Institute of Housing Economy, reverberated far and wide, mainly among the people associated with the then emerging local self-government structures, and dealing with municipal housing management on a daily basis. In March 1992, the parliamentary club of the Democratic Union invited local government representatives from all over Poland to a discussion on the Memoriał. It took place in the famous Column Hall of the Sejm (the Polish Parliament). The participants of the meeting – also at Kuroń’s initiative – praised the document, mostly for the pioneering quality of the proposed institutional, legislative and financial instruments that all the previous studies neglected to address.[1] Herbst and Bratkowski even called for the establishment of the Ministry of Housing (the latter never happened – unlike the other plans and assumptions of the Memoriał, which were extended, clarified and successfully implemented in the government’s reform program dubbed the “New Housing Deal”).[2]

The program developed by Herbst was introduced back in 1992. It contained a proposal for a comprehensive restructuring of the entire housing sector in Poland, as well as the creation, from scratch, of a coherent housing policy (practically non-existent at the beginning of the 1990s), which would take into account the new market realities and implications for the housing economy, tidying up ownership issues, introducing mortgage loan institutions, and the principles of functioning of housing cooperatives.

Both the Memoriał and the “New Housing Deal” define housing as a system based on market principles and rights of ownership, but they also highlight the role of the state in providing every citizen with a roof over their heads. The need to create a program of social housing for rent, aimed at people and households who do not qualify for a mortgage loan, featured prominently on the agenda. One of the main pillars of the program was to be a new kind of entity – Towarzystwo Budownictwa Społecznego (TBS, or Social Housing Association).

The name is a reference to the pre-war Towarzystwo Osiedli Robotniczych (Workers’ Housing Association), a company established in 1934 by Bank Gospodarstwa Krajowego (BGK), Fundusz Pracy (Labour Fund) and other state agencies. The Workers’ Housing Association built flats for blue-collar workers and low-paid white-collar workers. And although its activity was not enough to overcome many years of neglect in the area of workers’ housing construction, in the context of Polish conditions it can be credited with a substantial number of completed apartments of decent quality – by the outbreak of World War II, 2.2 thousand units had been built, and the construction of approximately nine thousand more had been financed.[3]

TBSs were modelled on institutions known from Western European countries: French habitations à loyer modéré (HLM), Dutch woningcorporaties, and British housing associations. In its assumptions, TBSs are non-profit enterprises; they play the role of an investor, they manage residential buildings and work in close collaboration with local governments. They usually operate in a specific area and can function as limited liability companies, joint stock companies, or cooperatives of legal persons. The main statutory tasks of TBSs include the construction and operation of residential buildings with housing units made available on the basis of social lease, aimed at people who are above the threshold of earnings that would make them eligible for an allocation of council housing, yet at the same time they do not earn enough to take out a mortgage. Optionally, TBSs can administer the stock of council flats and conduct other activities related to construction and to housing infrastructure.[4] Some municipalities have decided to use the extended option – for example, TBSs in Stargard and Szczecin successfully manage council flats, while the TBS in Katowice is currently implementing a multi-storey car park in the Culture Zone and an aparthotel in the city centre.

Most TBSs were established by municipalities, but private companies are also authorized to act as the founding bodies (although it must be admitted that the non-profit character of TBSs was never intended to be particularly attractive from business point of view). Among others, J.W. Construction boasts its own TBS. The Marki Sp. z o.o. (limited company) Social Housing Association built a huge block of flats in Warsaw’s Żerań, reminiscent of the architecture of the parent company’s residential skyscrapers near the Wilanowska metro station. In Kraków, the second largest city in Poland, there is not a single municipal TBS (the Kraków Municipality has only minority shares in one of the housing associations), despite the fact that in the 1990s as many as ten TBSs were established there, and eight of them have survived to this day. The largest of those – TBS Kliny Zacisze – has built 1,013 apartments to date. These investment projects do not stand out from the contemporary architecture of other developer-built housing estates.

Osiedle Pod Klonami [The Maples housing estate] realised by TBS in Szczecin (2003–2004), design: Wunsch & Wolanowski (photo: STBS)

The developer’s aesthetics is not accidental, as all of Kraków’s TBSs are owned by private construction companies, and they consistently implement a policy of building commercial apartments for sale – the last social apartments for rent in the capital of the Małopolska region were put into use in 2006. On the map of Polish TBSs, Kraków remains an exception; apart from Rzeszów, every other main regional city can boast a TBS of their own, belonging to the municipality.

Since the model of basing social housing on entities similar to TBSs proved successful in other Western European countries, and the consultations of the Polish project were attended by experts from abroad, including Great Britain and France, the proposal to create a social housing program was met with great enthusiasm by local government officials, i.e. largely the future initiators of the first TBS ventures.

Among those to attend the consultation meetings was Piotr Mync, deputy mayor of Szczecin in 1991–1998, responsible for housing policy (later, among others, president of the Housing and Urban Development Office, deputy minister for construction, president of the TBS in Stargard, and now vice mayor of Stargard).

“We were captivated by the program,” recalls Mync. “We lacked the tools to work in the new socio-economic system. The program included an idea for smoothing all the basic problems of housing, and it laid the foundations without which it would be difficult to get out of the “trap” of multi-family housing at the time. Cooperative housing was practically all that there was, inflation caused a very substantial reduction in contributions from building society passbook savings, but also an exponential growth in interest on loans.”[5]

Among other things, the “Nowy Ład Mieszkaniowy” [New Housing Order] section describes the system of TBS financing: funds for the construction of apartments for rent were to be largely obtained from preferential repayable loans granted by the National Housing Fund (Krajowy Fundusz Mieszkaniowy, KFM), managed by the BGK bank. Postulates from the Memoriał and the “New Housing Deal” regarding TBSs have been codified in the Act on certain forms of support for housing construction. The new law entered into force in November 1995 as part of a package of laws dubbed “the housing constitution”, and it introduced three new tools: savings banks with contract loans, the aforementioned KFM, and the legal institution of TBS. And so the modern social housing sector in Poland was born.

Self-government pioneers

One of the pioneers of the TBS program, registered under number 27, was the Szczecin Association for Social Housing (Szczecińskie Towarzystwo Budownictwa Społecznego, STBS) founded in December 1996. Its first president was Grażyna Szotkowska, a clerk from the Housing Affairs Department of the City Hall in Szczecin. At the beginning of 2021, STBS merged with the Prawobrzeże TBS, and together they created the largest enterprise of the kind throughout the country.

From the very beginning, TBSs in Szczecin have based their activities on several pillars – apart from the construction of social housing for rent, they are also managing a large part of the municipal resources and buildings belonging to housing communities, as well as engaging in the revitalization of downtown quarters. Diversification turned out to be the key to the success of a tenaciously implemented housing policy, which is a good-practice model for the region and the whole country. This is confirmed by the figures: STBS now has a stock of nine thousand community flats, and it manages an additional 5.5 thousand council flats and units belonging to housing communities. Diversified branches of activity and the city’s strong commitment allowed STBS to survive unscathed through the darkest times of marginalization and curbed financing of social housing from the state budget in the years 2009–2015.

Paska-Parkowa development, realised by TBS in Szczecin (2001–2003), design: Domino Grupa Architektoniczna (photo: STBS)

In 1998, the TBS in nearby Stargard was established. It quickly adapted the best Szczecin-derived models, translating them into efficient operation in a much smaller centre: with the population of 70,000, Stargard even went a step further and handed over all its municipal resources for the TBS to manage. This approach is a model implementation of Irena Herbst’s assumptions. Her intention was for TBSs to build but also to take over the tasks of the municipality in the field of the use of communal flats, which was to ensure efficient administration of the resources.

West Pomeranian companies are precursors not only in the field of management. Investments implemented both in Szczecin and in Stargard are known for their attractive architecture that fits the urban context, for high-quality finishing materials, and well-planned common spaces. Decent playgrounds and friendly green areas with an appropriate number of comfortable benches, which are still sorely missing from many development projects in 2021, in West Pomeranian TBS projects were already part of the standard at the turn of the century.

It was no coincidence, because Piotr Mync, an architect by education, from the beginning followed the ambition not only to build as many apartments as possible, but also to create high-quality spaces. Throughout its existence, STBS has organized architectural competitions in cooperation with the SARP (Association of Polish Architects), the Municipal Spatial Planning Office (formerly Municipal Urban Planning Studio), and the City Architect.

Among the investments in Szczecin city, Osiedle pod Klonami [The Maples housing estate], built according to the design of the Wunsch and Wolanowski studio (2003–2004), deserves special attention. The frontage-type organisation, clinker façades, and tenant front gardens in the complex of housing blocks evoke associations with British or Dutch townhouses. Although the project’s overall formal expression fits in with the trend of historicising references that was commonly used at the beginning of this century (and that was uniformly embraced by cooperatives, TBSs, and fledgling developers alike), it is distinguished by attention to detail and a friendly scale of development compared to the standard housing complexes of its time. The architecture of another project by the Szczecin TBS, Paska-Parkowa (2001–2003) transports us to the mecca of social housing: contemporary Vienna. The housing estate designed by Szczecin-based studio Domino Grupa Architektoniczna fits in well with the dense downtown development. The façade is distinguished by solids covered with natural wood, the windows are large, and the balconies are plenty. In the scans of analogue photos posted on the SBTS website, only the cars and the clothes worn by the passers-by reveal that this is Poland of 2003 AD. The Domino studio also designed the first housing estate for seniors that the Stargard TBS built in 2011.

“Nie Sami” senior housing complex realised by TBS in Stargard Szczeciński (2011), design: Domino Grupa Architektoniczna (photo: STBS)

The milieu of West Pomeranian TBSs makes an effort to popularize investment projects that apply the architectural competition formula as a nationwide standard, but in smaller cities there are often no adequate agencies that could formulate the terms of such competition and successfully conduct it. This does not mean that TBS competitions never happen. Although this is not a rule, they do sometimes take place in both smaller and larger cities. For example, at the end of 2019, the TBS Wrocław, owned by the city of Wrocław, commissioned the innovative residential and service building, designed by Major Architekci, in Nowe Żerniki – and the design was selected in an architectural competition. An interesting hybrid has emerged from the investment project intended for a range of different generations – half of the apartments are intended for seniors, half are standard apartments for rent, and the ground floor houses care services and a kindergarten. The buildings are also distinguished by the tasteful façades on the courtyard-side, covered with natural wood and the functional, green common space. For years, we used to associate TBSs with quite another architectural style: a modest, blue-lemon plaster blocks of flats with sloping roofs, i.e. the Polish standard of the 1990s and the first decade of the twenty-first century. However, products of some – especially private – companies with larger budgets are not lacking certain “panache”. Among other things, this resulted in a kind of residential folly: a gigantic “cruise-ship” of the Nasze Kąty TBS, built by the Wrocław-based real estate development company called Intakus (today TFI Holding SA).

The first successes

Despite the initial difficulties associated with the time-consuming process of setting up and registering new TBSs, the program was gaining momentum. The number of flats built thanks to it was growing steadily: in 1996 – the first full year after the law on certain forms of support for housing construction entered into force – TBSs commissioned fifty-nine flats. The threshold of one thousand apartments per year was crossed in 1998; 1,218 social flats were built at that time. Just three years later – in 2001 – TBSs built 6,605 apartments, which constituted 6.2 per cent of all newly completed residential units in Poland. In the years 2002–2007, the annual number of all flats put into service stabilized at the level between 4,500 and 6,000, except for the record year 2004, when TBSs built 7,151 flats. They would never achieve such investment momentum again.

Contribution of wedding money

Until 2009, TBSs financed the construction of new apartments for rent from three sources: from preferential repayable loans granted by the KFM, from funds transferred to TBSs from the owner (typically, the municipality), and from the so-called construction cost contribution, paid by the future tenants. Plots for the construction of the projects were contributed to the TBS in kind by local governments or private owners.

 “In the first edition of the social rental housing program, the implementation of an investment project was difficult. Initially, the preferential loan granted to TBSs from the KFM could not exceed 50 per cent of the value of the project,” explains Piotr Mync. “Fortunately, the establishment of a TBS, its registration, constitution of its governing bodies, then the preparation of an investment project, design, and finally the construction of apartments took so long that the impatient Sejm [Polish Parliament] changed these criteria in favour of investors. From that moment on, BGK granted loans for a maximum of 70 per cent of the investment project value.” The remaining funds – that is 30 per cent of the investment costs, the so-called own contribution – the TBS had to obtain from other sources. Financing of the own contribution to the municipal TBS loan depended on the housing policy pursued by a given local government: in some cities, future tenants were required to pay the entire remaining amount, i.e. 30 per cent of the construction costs of the apartment they wanted to move into; in other cities, the participation was fully or partially paid for by the municipality. It was common practice to divide the resources of the municipal TBS into segments addressed to different groups of residents – depending on their earnings, the future tenant would pay a contribution of 10, 20 or 30 per cent of the construction costs. For example, TBS in Szczecin implements a number of programs for several groups of recipients, and therefore it applies different levels of participation in construction costs (according to this policy, the required contribution towards a flat built under the “home for a graduate” program is 15 per cent of the construction costs).

Apartment building in Warsaw realised in 2011 by Marki TBS, a private company that belongs to the J.W. Construction Holding S.A. Its architecture refers to other developments by the parent company (photo by: Kuba Rodziewicz)

The necessity to pay the tenant’s contribution is probably the weakest point in the TBS program. On the one hand, it improves and even enables the implementation of investment projects in municipalities that are otherwise unable to provide the company with sufficient financing; on the other hand, it can be an obstacle on the way to getting a flat in a TBS and may lead to abuse and distortion of the idea of social rental housing. Contribution at the level of 30 per cent in large cities often translates into dizzying amounts, exceeding the required minimum own contribution necessary to obtain mortgage credit for a similar apartment. This is a paradox, as TBSs were supposed to be an alternative for people who cannot afford a loan. On the website of the Warsaw City Hall we find information that in the newly-implemented investment project, the amount of contribution per square meter is “only” 2,805 złoty (i.e. 30 per cent of the cost of building the flat, which is 9,350 złoty per square meter). The future tenant of an apartment with a size of fifty square meters must therefore pay the contribution in the amount of one hundred and forty thousand złoty, and added to that, a deposit equivalent to one year’s rent. This places contribution, as an expense, somewhere between the amount of own contribution to the loan, and the purchase of an entire apartment. Of course, in the event of pulling out from the TBS, it is possible to redeem the contribution paid – furthermore, the amount is subjected to valorisation, which means that the actual sum redeemed is higher – therefore, it is sometimes (rightly) treated as a capital investment. Before you invest, though, you need to accumulate considerable funds, which in many cases makes taking out a loan necessary.

At first glance, it might seem that the amount of contribution could scare potential tenants away – and yet, this is contradicted by the considerable interest that TBS apartments enjoy on local markets. “When recruiting tenants for one newly built flat in the TBS system, there are four applicants on average, and for the flat that is vacated, there are often as many as a dozen or so” – says Janusz Olesiński, president of the TBS in Katowice. “In the past, in Katowice, we experienced some problems with large apartments that required greater financial commitment. At that time, however, the Building Society lowered the amount of the contribution required. Today, the problem of the lack of people willing to buy into a TBS apartment no longer exists.”

Piotr Mync recalls that in the early years of operation, the monthly rent was a greater obstacle than the cost of a one-off contribution. “Young married couples were able to afford the contribution if they had a big wedding and they managed to raise enough cash there, but they were not necessarily earning enough to pay the rent. Thus, while in real money the contribution has increased in relation to income, the rent in TBS flats, quite the reverse: it is now a smaller portion of the essential expenses of an average household. In addition, banks are not currently offering loans to cover the contribution, as they used to.”

 “Will sell flat in TBS”

Ads with the above content can be found on the Internet today. Of course, they are not about selling the property, as it is not an owner-occupied flat. So why is it possible to “sell” or “buy” an apartment in a TBS?

Tenant contribution was supposed to be optional, but with time it became an important component of the budget of most investment projects. In turn, residents often treat the funds they paid as their own contribution, and in the event of their resignation from the lease they try to speculate on that. In theory, the Building Society takes priority in terms of choosing and assigning a new tenant, while the latter – also in theory – only pays the contribution amount. However, the tenant giving up the lease on the apartment has the right to transfer the lease contract to a specific person that she nominates. If the “client” who responded to the advertisement meets the income conditions required by the given TBS, the person leaving the apartment can earn quite a lot of money. Additional “compensation” paid by the new tenant to the one moving out could amount to several dozen or even hundred thousand Polish złoty.

Illegal transactions are made to the detriment of those on the waiting list. In 2019, regulations were regulated to curb this “trading” – today, the consent of the Building Society is required for the transfer of a TBS apartment. The situation resembles the commodification of family allotments, which were never intended to be a market product. They were invented so that they would serve a social purpose, yet they have been sold “under the table” for several years.

So long, KFM!

In the first years of the PO-PSL government, the social housing for rent sector lost momentum in terms of investment dynamics. The government gradually reduced the outlays for financing the KFM from the state budget: in 2007, they added 408.2 million złoty; in 2008, the subsidy dropped to 220 million złoty, and in 2009, down again, to only 150 million złoty – the lowest level of budget expenditure on KFM since 1999. Ultimately, for reasons that are incomprehensible today, and despite huge protests from local governments and the TBS community, the PO-PSL coalition decided to dissolve the KFM. Interestingly, the bill cancelling the fund (that entered into force in May 2009) was supported by the whole range of political parties in the then Sejm, from SLD to PiS.

Professor Anna Szelągowska from the Warsaw School of Economics calls the liquidation of KFM one of the “biggest mistakes of the state’s housing policy”.[6] The decision left the people associated with the TBSs perplexed. “Until the end, we did not believe that this could happen” – says Piotr Mync, who in 2009 was the president of the Stargard TBS. “It just seemed so absurd, so wasteful, so damaging to the only housing sector that developed in the new times. It is often said that TBSs and housing cooperatives built only one hundred thousand apartments with the KFM. In certain years, with the actual demand worth a billion and several hundred million złoty, less than two hundred million złoty had been reserved in the state budget for the purpose. If all the correctly submitted applications were implemented throughout the entire time of KFM’s operation, there would be many, many more flats. We were surprised and outraged that in 2009 the fund ceased to exist, especially since until 2015 no other tool was proposed to support the development of the rental housing sector with moderate rents.”

Today it is impossible to reconstruct the reasons behind the liquidation of the KFM. Various hypotheses arise: one is that the government wanted to allocate this money to buy out a stake in PKO BP bank, another is that the KFM fell victim to the personal dislike of Piotr Styczeń, the deputy minister of infrastructure responsible for housing in 2005–2013, and the creator of pro-ownership programs for mortgage loan subsidies, called “Rodzina na Swoim” [Family in their own home] and “Mieszkanie dla Młodych” [Flat for the young].

 “When the KFM was being liquidated, I had a terrible fight with one of the MPs from the PO-PSL coalition,” recalls Irena Herbst with bitterness. “I asked him: ‘How can you vote for the liquidation of KFM?’ He replied: ‘We were promised that if we voted for the liquidation of KFM, the money would be allocated to road infrastructure.’ Then I said to him: ‘It won’t, you’ll see.’ And of course, it wasn’t!” If the government at the time had not decided to abolish the KFM and kept it separate, according to Herbst’s calculations, in 2018 the fund would have had approximately three hundred and fifty million złoty of free resources, coming from the repayments of previously incurred loans; and in 2019 – as much as five hundred million złoty. Therefore, it would be able to grant new repayable loans on a similar scale as in the best period of its operation, and that would be without having to use subsidies from the state budget.

Deprived of preferential credits, TBSs had to reinvent themselves in the new reality. In order to maintain the construction activity, some societies abandoned the original assumptions of the program and started building condos – that is, tenant-owned flats. Those TBSs, which also managed municipal resources on behalf of the municipalities, were in a better position than those that were building only social flats for rent, but all of them faced problems with financing new investment projects. Piotr Mync explains the context of those times: “A TBS without investment activity is not ‘it’ anymore. It is impossible to pursue an ambitious housing policy this way. In order not to stop investing, we then decided to go for flats financed by the BGK Subsidy Fund, whose main task is to bankroll the construction of social flats and council housing. For this reason, we automatically stopped offering flats for families with average earnings, because flats from the Subsidy Fund are intended only for people from the municipal queue.”

With the PiS government taking power in 2015, the concept of the so-called “lease leading to ownership” gained popularity: the tenant pays an increased rent with the view to ultimately becoming the owner of the apartment. Thanks to the favourable credit line at the BGK, certain Building Societies, for example those in Poznań or Katowice, are building some of their apartments according to this formula. “The TBS in Katowice follows the ‘tailor-made’ strategy,” explains Janusz Olesiński. “We cater to three groups of clients: people with low, medium, and high income. To families from the first two groups, we offer classic apartments for rent in the TBS system. To the more affluent clients, we build ‘leading to ownership’ apartments where the contribution is 50 per cent of the construction costs, and tenants pay an increased rent.”

The TBS belonging to the city of Katowice focuses on the construction of apartments for rent. Janusz Olesiński supports this strategy: “If I were to define the ideal proportions of our construction activity, I would say that the Katowice TBS should develop 80 per cent of apartments for rent, with the remaining 20 per cent of apartments offered for sale on the commercial market or with the option of obtaining ownership. We wish to allocate the funds obtained from the sale of these apartments to our social projects, for example the revitalization of tenement houses in Mariacka street.” It is there – in one of the most famous places in Katowice – that KTBS plans to rebuild three neglected pre-war tenement houses based on a design selected in an architectural competition in 2019. The investment, designed by the Katowice-based studio OVO Grąbczewski Architekci, involves the construction of forty apartments for seniors and university graduates.

A new beginning?

Towards the end of the second term of the PO-PSL coalition government, the attitude of decision-makers towards the housing-for-rent sector slowly started to change. In September 2015, at the eleventh hour before the upcoming parliamentary elections, the Sejm revised its 2009 mistake and restored preferential crediting of social housing for rent, which was a huge success for the entire TBS community. BGK had also become the operator of the new support program, known today under the trade name of Społeczne Budownictwo Czynszowe (Social Rent Construction). Gradually, the number of flats commissioned by TBSs began to grow again – from 1,265 flats in 2015 to 2,472 in 2019. Unfortunately, the trend turned out to be short-lived. Despite the record-breaking construction activity in 2020 – the total of 222,000 apartments were built throughout Poland – the number of flats completed by the TBSs decreased drastically. Last year, Building Societies put to use only 1,035 apartments; this is the worst result of the social housing sector since 1997.

Sacred Property and the path thereto

In the original assumptions of the creators of the Polish social housing system, the units built by TBSs were to remain permanently in the stock of flats for rent. A month before the parliamentary elections in 2011, the Sejm – just like two years earlier, when it liquidated the KFM – almost unanimously voted to enable the purchase of flats by the tenants. However, the regulations had been designed in such a way as to discourage the buyout as far as possible. Zdzisław Słabkowicz, the then president of the Polish Chamber of Commerce of the Building Societies, explained the new regulations in ‘Rzeczpospolita’ paper: “Tenants are counting on getting discounts. Meanwhile, the amendment requires the sale of units at market price, at least; and this applies to cooperative flats as well. You also have to pay off the mortgage burden on the apartment. So it simply isn’t worth it; it is better to give up renting a flat in the TBS, get the reimbursement of your contribution, and buy a new flat from the developer.”[7]

The community of people associated with local government TBSs was mostly against the idea of housing privatization. Irena Herbst, the creator of the TBS program, was also among those dissatisfied: “I am totally against the privatization of TBS resources. If someone absolutely wants to live in a tenant-owned apartment, then they should leave the stock of social resources created specifically for people who need it. We still have a huge shortage of the apartments with accessible rent! It was primarily private TBSs that lobbied for the possibility of privatizing TBS flats, whereas the much more numerous municipal TBSs were against it.”

In the period of early transformation, and in the first decade of the twenty-first century, the promotion of property – of ownership – as a superior value left its mark on both housing policy and need creation: the need to own a flat at all costs. Since 2015, we have been cleaning up the chaos in the wake of pro-ownership loan subsidy programs. Despite this, both in the “Mieszkanie Plus” investments and in the TBS system, against experience and despite the shortage of social housing, the State places great emphasis on the possibility of depleting this resource by promoting the aforementioned “lease leading to ownership”.

Most of the milieu connected with TBSs does not share the enthusiasm for this mechanism that those in power seem to have. “The TBS in Szczecin does not offer flats for rent with the ‘lease leading to ownership’ option,” explains Grażyna Szotkowska. “Personally, as the president of the board, I think that it is pointless for TBSs to build this type of apartments, and of course it would be completely senseless for this to be their core business. From 2009 to 2015, that is, during the stagnation of housing support, the construction of flats on ‘lease leading to ownership’ basis became popular. TBSs then began to offer this option in order to fill the gap in their investment activities. Currently, the system has been structured by legal regulations, but in my opinion, municipal TBSs should be careful with such activities, and treat them as supplementary and secondary to the construction of classic, TBS-proper apartments for rent.”

Is SIM still a TBS?

When reading the new law that introduces the Housing Package, one gets the impression that the biggest change that has taken place in the TBS system concerns the vocabulary. The name “Społeczne Inicjatywy Mieszkaniowe” [Social Housing Initiatives] brings to mind misleading associations with housing cooperatives and a greater participation of grassroots ventures, while in fact the nature of the TBSs’ activities has not been significantly modified, except for the so-called “settlement of contribution in the cost of building the apartment”. From January 1, 2022, a tenant of a TBS flat, who has been a party to the lease agreement for at least five years, will be entitled to recover the contribution paid by her in full or through a periodic reduction in rent (i.e. she can go on a so-called “rent holiday”), of course, provided that the given TBS/SIM has repaid the preferential loan from the BGK bank. If the tenant has paid more than 20 per cent of the contribution (25 per cent in the capital of the region or a city with the status of a district, with a population of over one hundred thousand inhabitants), she will be able to convert her existing contract into a “lease leading to ownership” agreement.[8] The government assures us that the decision on whether tenants of social flats built before the entry into force of the Housing Package will be able to “acquire ownership” in this mode should rest with the owners of the TBSs. However, there are doubts: it may seem that the transitional provisions of the Act were structured in such a way as to oblige municipalities to take that decision, and thus open the door to the privatization of the TBS resources – as it is still unclear whether municipalities that decide not to introduce the possibility of transforming old lease contracts into those with the “leading to ownership” option will be able to use new, more favourable instruments for financing investment projects introduced under the Housing Package.  

Despite the adversities, the social housing associations survived and became one of the most interesting elements of the housing policy of the Third Polish Republic. In the years 1996–2020, TBSs built 74.7 thousand new units, which is 2.2 per cent of all apartments commissioned in that period. Although these numbers may not seem very impressive, thanks to TBSs, we have experienced some kind of version (albeit a poor substitute) of Western European housing policy in Poland.

Using the experience of foreign colleagues, individuals involved in launching the program and creating TBSs have implemented – and still continue to implement – a pioneering, non-profit model of social housing. Thanks to the architectural competitions, many TBS projects can be considered exemplary in terms of caring for the quality of space. Piotr Mync explains the uniqueness of TBSs: “A dynamic environment of experts who care about housing construction has accumulated around social housing associations. Admittedly, not everyone considers this a priority issue, as it is not very spectacular in terms of political actions and profits.”

Janusz Olesiński emphasizes that mutual support given to each other by self-government owned TBSs is of great value: “Social housing associations have this very cool feature: they freely share their good practices. If the management of one of the TBSs has introduced an interesting solution, they are happy to share it with representatives from other TBSs. This is probably because the municipal TBSs do not compete against each other. Each society is building homes only within its own territory. The TBS in Katowice builds only in Katowice, and not, for example, in Chorzów or Sosnowiec.”

Answering the title question: SIMs are still TBSs, albeit under a changed name. Therefore, we do not bid farewell to entities that for over twenty-five years have been implementing the program of social rental housing in the form that we known. On the contrary, we are observing their further development with hope and curiosity. Our interlocutors unanimously recognize the TBS program as a success. We strongly support social housing associations so that they not only maintain their current pool of resources, but also gradually increase it.