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03/03/2017   The National Audit Office: there is not Enough Social Housing for Everyone

An audit carried out by the National Audit Office in municipalities and the Ministry of Social Security and Labour has shown that the Lithuanian rental housing support system fails to ensure support for the most vulnerable people, and investment in the development of social housing does not solve the problems related to the provision of housing.

During the period between 2012 and 2014, the state has invested more than 21 million Euros, and the municipalities – another 3.6 million Euros from their respective budgets into the development of social housing. These funds bought the municipalities around 900 social apartments, but only 3 percent of those waiting received them every year. The European Regional Development Fund assigned 49.9 million Euros for the development of the social housing fund in 2014-2020, which will be used to purchase 1,150 social housing units, although even that will not be enough to fully satisfy the demand – more than 12,000 families and individuals are currently queued up for housing.

The auditors note that, currently, the country does not differentiate between groups of individuals to determine which ones experience the most difficulty in finding housing independently, and which are the most vulnerable. The common queue consists of all low income earners: young families, disabled individuals left without parental care, families with three or more children, and employable individuals. Everyone hopes to be provided with social housing, although it may take as long as 20 to 30 years of waiting in queue. The current system does not encourage young families and employable individuals who have received temporary housing to look for opportunities to earn higher incomes because, upon exceeding the annual wealth and income margins, they would lose both the support and their apartments. The audit also revealed that social housing could be used by individuals who are not eligible for it. Municipalities find it difficult to control all the unmarried individuals living in social housing who have not declared their income, as well as those who have received an apartment and left the country without declaring their departure.

The new support measures – the partial compensation of taxes related to rent or lease-purchase of housing – are also not appealing to most individuals. In 2015, rent compensation was used by only 0.3 percent, and in 2016 – 6.8 percent of families and individuals expected to make use of such support. The market lacks supply of lease-purchase arrangements, which means they are still not in use.

The auditors also commented on the selection of municipal social housing fund development projects, which are funded by the EU. Municipalities often choose the most expensive means of purchasing housing – the construction of new housing units and the reconstruction of unused buildings. Furthermore, in some municipalities, the average price of the planned new buildings, as well as unused buildings under reconstruction, is two to 10 times greater than the average price on the market. This means that, using the same financial resources, municipalities provide social housing to less families and individuals than they could. The National Audit Office has submitted the information related to municipal decisions regarding the construction of social housing to the Special Investigation Service, which implements preventative measures against corruption.

The public auditors have submitted their recommendations regarding the improvement of the rental housing support system to the Ministry of Social Security and Labour. Institutions are encouraged to take decisions which might help to improve the process of providing housing support without waiting for systemic changes to take place.

 

Responsible for the information Communication Division
Last updated on 25 April 2017

National Audit Office of Lithuania

Pamėnkalnio St 27, LT-01113 Vilnius, Phone: + 370 5 266 6793, + 370 5 266 6752, Email: nao@vkontrole.lt.