A case study of the Housing Fund of the Republic of Slovenia

National Housing Fond of the Republic of Slovenia: from inception to present day

The Republic of Slovenia proclaimed independence in 1991, constituting the obligation of the state to create conditions for proper housing for individuals. The National Housing Fund of the Republic of Slovenia (the Fund) was founded in October 1991 under the National Housing Act (the Act) in order to oversee the implementation of the National Housing Programme (NHP) in collaboration with other governmental bodies and agencies at the national and municipal level (HFRS, 2021; European Commission, 2017). The NHP aimed to ensure a higher standard of living quality for vulnerable groups. According to Kerbler and Kolar (2018), the four main objectives of the NHP are: balanced offer of suitable housing, easier access to housing, quality, and functional housing, and increased housing mobility of the population. Throughout the years, the Funds' responsibilities widened from policy implementation to investment, management, and construction activities.

After Slovenia’s independence in 1991, mass privatisation of the public housing stock took place. According to the Act, the proceedings from the privatisation were to be distributed 20% to the Fund, 30% refunded to tenants who relinquished the rights to purchase dwellings and 50% to purchase new housing (Sendi, 1995). Overseeing the privatisation was one of the first tasks for the newly founded Fund, while the role of the state in the housing market was slowly diminishing. Funded from the provisions of the privatisation, over the period of 30 years of the Fund's existence, almost 3,000 housing units were sold at favourable prices (HFRS, 2021).

Originally, the Funds activities were to provide favourable loans (around 3%) mainly to non-profit housing organisations to construct more units, giving preference to young families with children, one-income families, physically handicapped, and three-generational families (Sendi, 1995).

There are two distinct periods of the NHP, between the years 2000 and 2009 and the current period of 2015 to 2025, aiming to increase the supply of dwellings and support disadvantaged and vulnerable groups. The period between 2009 and 2015 was without a strategic housing policy plan.

Currently, some of the main activities of the Fund are to promote investments in new construction to increase public rental housing stock by providing long-term loans, directly investing in projects, managing the existing housing stock and developing pilot projects (HFRS, 2021). The fund develops its own projects, as well as projects in cooperation with municipal housing funds and cooperative housing organisations. The current programme prioritises the renewal of housing stock, improving the access to housing, reforming the housing fund, and building new housing stock (BMVBS, 2009; European Commission, 2017).

The Funds’ structure

The founding body of the Fund is the Republic of Slovenia, it is led by the supervisory board which is comprised of two members of the ministry of spatial planning, and one from each ministry of finance, beneficiaries, and legal department. Next to the (national) Fund, there are 13 municipal public funds registered in Slovenia that are in charge of implementing municipal housing programmes.

Daily activities of the Fund are managed by 40 employees (31st December 2020) and the total equity of the Fund is more than € 400 million (HFRS, 2021). Main sources of funding are proceeds from the sale of housing units, state budget dotation, foreign and domestic grants, issuance of fund securities, sale of other non-business assets under the Funds management, revenues from renting of housing units and long-term loans. The Fund owns two subsidy companies, building management and a real estate consulting firm, employing around 30 and 20 people respectively. At the end of 2020, there were 3,825 public rental apartments managed by the Fund, and currently, it is modernising its platform to manage better the applications for the rental units (HFRS, 2021).

Among other goals in the 2021-2025 period, the Fund is planning to acquire up to 500 public rental apartments, 150 serviced rental apartments, and 50 places in homes for seniors and acquire up to 3.280 public rental apartments for young families.

One of the recently completed projects co-funded by the Housing Fund is the construction of dwellings for young people and the elderly in the city of Ljubljana. The Housing Fund received a € 50 million loan from the Council of Europe Development Bank (CEB) to build 500 rental units for 498 families and individuals. Completed in 2021, and according to the Housing Fund director Črtomir Remec, it is the “largest housing construction in independent Slovenia”. There are further similar projects in the development phase and are planned to start in the near future, co-financed by the CEB and the Housing Fund (CEB, 2021).

Shortcomings of the Fund’s operations

There are some critiques of the Fund's operations. For example, one was raised by the sitting Minister of Environment who also authored the National Housing Act, claiming that the 20% of the privatisation proceedings was never fully contributed to the Fund from the local authorities, hampering its development and achieving the goals back in the beginning of the programme (Sendi, 1995). Other remarks from the European Commission (EC) (2017) report that the programme is not on track due to a lack of legislation that would allow new pilots and implement innovative solutions. The report also states the underfunding of the Fund, estimating that a minimum of € 220 million is needed to meet its targets while claiming that the administration of 40 employees is understaffed to carry out all of the tasks. Since the rent amounts that the Fund is charging are below market level, it struggles to attract private companies to invest in social housing. Another critique stipulated by the EC is that definition of vulnerable groups by the Fund does not include the homeless, forced to evict, and those living in overcrowded units from the scope of the programme.

Final remarks

Compared to the neighbouring EU Member States, namely Croatia, the Fund is seen as innovative. While other countries failed to form the overarching institution that would oversee the implementation of the national housing policy, Slovenia has done so right after its independence. Since then, the Fund has become the cornerstone of any future policy developments, and with its 30 years of experience and know-how and with some completed and running demo projects, the Fund is a good practice example to countries with similar local contexts, namely post-socialist countries with a high homeownership level and non existing national housing strategy.

The Housing Fund of the Republic of Slovenia is addressing a couple of SDGs through the following targets:

SDG 1: End poverty in all its forms everywhere The Housing fund is improving the living conditions of youth and the elderly by offering affordable housing. With a rise in precarious working relations for young generations and low pensions for the elderly, the flexibility of service that the Fund is offering is addressing the work mobility through the public and social rental scheme in many large urban conglomerations. Due to a high risk of youth and elderly poverty, the Housing fund is a notable example of addressing the issue, with further efforts to be made, such as regulation and tax incentives for land transfer and intergenerational cooperation.

SDG 7: Ensure access to affordable, reliable, sustainable and modern energy for all From what is understood from the literature found on the Fund and from documents sent by the Fund directly (internal publications), the Fund is addressing this issue with modern construction materials and methods, which could lead towards reducing the energy poverty. The Fund considers the life cycle in the construction and promotes sustainable methods in the maintenance of the housing units. There could be an improved strategy showing targets to be reached by the Fund to show a higher commitment.

SDG 11: Make cities inclusive, safe, resilient and sustainable The Funds’ activities promote social mix in their operations by including social and public rental and homeownership tenure in the same area. Moreover, by investing in rural and urban regions, the Fund promotes balanced development. Due to an increase in overall housing prices in Europe, the rise in the supply of social and rental housing units by the Fund could reduce the overall housing prices, thus increasing affordability and accessibility.