65
SETTLEMENT NETWORK, SETTLEMENTS AND HOUSING POLICY
per cent of the countrys overall housing
fund, were built in Bulgaria between 1945
and 1985.
The state housing construction was
aimed at goals that stemmed from the prin-
ciples of the socialist system - to provide
every family with a house of their own at
prices commensurate with their income. At
the same time the state used this construc-
tion to keep the citizens in long-term de-
pendence. The distribution of houses be-
came a powerful tool of subordination. It
included two major systems: municipal and
departmental.
The municipalities provided houses to
buy, and departments - houses to rent.
Upon retirement the lessee could buy the
department-owned house. The housing
prices depended not on the real construc-
tion cost, but on the peoples purchasing
power. In practice, the peoples problem
lay not so much in paying for the house,
but in falling into the group that had the
right to a house. This was accomplished
by a complicated classification system that
was socially fair in principle.
The commitments of the socialist state
to ensure housing to every family were not
fulfilled, despite the sizeable volume of
housing construction. Mid-eighties saw the
beginning of the housing shortage in big
cities. Applications for houses in Sofia only
numbered 110,000, and the annual rate of
state construction was between 12 and
15,000 apartments.
At the same time, vil-
lages had a large number of practically
uninhabited houses.
The suppression of private initiative
and the difficulty in finding building sites
and materials
limited the share of private
and cooperative construction, which none-
theless was impressive (over half the houses
built).
Following 1989, the organization of
housing construction and acquirement
changed profoundly. Previous restrictions
on the quantity, locality and disposal of real
estate were abolished. Already in 1990
there were potential conditions for devel-
oping the housing market, but real pro-
cesses were contradictory.
First, the state did not control the
prices and the change of the original des-
ignation of housing, failed to introduce tax
regulations, did not claim the return of sub-
sidies invested in houses that were first
privatized and then sold at the free mar-
ket.
Second, the solvent demand for dwell-
ings for housing needs was far less than
that for buildings for non-housing needs
(mainly for offices, shops and warehouses).
The private business sought to invest the
capital it had quickly and easily accumu-
lated. The negative effects of this develop-
ment were the loss of a large number of
houses, the profiteering prices of real es-
tate and the impossibility to buy a house of
those who badly needed it.
Third, nationalized real estates were
restituted. But according to restitution laws,
only those owners whose houses had not
been privatized, and whose lands had not
been built upon had the right to a restitu-
tion.
Fourth, the main interest rate soared:
with small exceptions it was well over 50
per cent during three consecutive years
(1992-1994). This has practically braked
housing credits and hence new housing con-
struction, that plummeted.
Overt and covert goals
of state housing
construction
Figure 5.1.
Number of completed new housing in Bulgaria (1980-1995)
HUMAN DEVELOPMENT REPORT ! BULGARIA 1996
66
Against this background, the hitherto
prevailing reform in housing policy can be
summarized as follows:
- abolishing all legal restrictions on real
estate;
- full abolishment of subsidies for
newly arising housing needs;
- completed privatization process;
- a record-breaking value of the price/
income indicator: 14/25 as against 3.5/5.0
for Western Europe;
- a limited housing market, covering a
mere 10 per cent of potential demand;
- justice has triumphed for a small
number of owners of nationalized property;
- awakened hopes for compensating
former housing deposits of over 80,000
households under the law of long-term
depositors.
In practice, most changes in recent
years have been following the logic of sim-
ply negating the old restrictions, mecha-
nisms and norms, without establishing and
affirming new ones, adequate to the newly
evolved market relationships and protect-
ing both public and private interests.
By 4 December 1992 inhabited dwell-
ings in Bulgaria numbered 2,741,395. By
the same date 40.4 per cent of dwellings
were overcrowded - the number of inhab-
itants exceeded that of rooms. This means
that by this date 4,744,000
Bulgarian citi-
zens lived in adverse housing conditions.
As regards the average housing area per
capita, 71.5 per cent of Bulgarias popula-
tion occupied less than 16 sq m of housing
area. For the sake of comparison, the fig-
ure for West European countries is about
40 sq m per inhabitant. The public opinion
mirrors this state of housing needs met.
The quality of housing conditions de-
pends not only
on the housing area avail-
able, but also on the availability of modern
engineering facilities: plumbing, drainage,
phones, central heating and heated water.
According to the last housing census in
1992, 87.5 per cent of Bulgarian dwellings
have plumbing. The relative share of ur-
ban dwellings with drainage is 97.4 per cent,
while that of village dwellings is 77.1 per
cent. Dwellings that have heated water (ei-
Level of satisfaction with housing conditions (June 1995, in %)
Figure 5.2.
Table 5.2.
Usable area of new housing 1989-1995 (thousand sq m)
1989
1990
1991
1992
1993
1994
1995
Throughout
the country
2 852
1 865
1 377
1 384
850
727
517
In towns
2 369
1 557
1 200
1 251
755
644
426
In villages
482
309
177
133
95
83
91
The state beats a retreat from the housing sector
suring the link between needs
and possibilities and facilitating
labor mobility. The state does
not fulfil its basic function to
provide legal, financial and or-
ganizational conditions to vul-
nerable population groups for
solving their housing problems.
Box 5.6.
The state policy has shifted from
the pole of overall responsibil-
ity for housing supply towards
the pole of complete lack of re-
sponsibility, getting rid of the
last vestiges of social housing
policy. Bulgaria is a far cry from
a balanced housing market en-