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FACING THE ENVIRONMENTAL CHALLENGE
recent Housing Resettlement and
Reconstruction in Southeastern Europe
Emiel A. Wegelin
Introduction
The Stability Pact for Southeastern Europe (SP)
has undertaken several initiatives in which housing figures
prominently. One of these is the Social Cohesion Initiative,
where housing in the region is looked at from the viewpoint
of structural socio-economic development and urban regeneration
in the aftermath of the political and military conflicts in the
former Yugoslavia during the 1990s.
Housing development is also one of the priority
issues identified in the Agenda for Regional Action (AREA)
program initiated by the SP’s Regional Return Initiative in June
2001. This initiative focuses on policies, programs, and
measures to rectify and overcome the consequences of
displacement which occurred in the series of armed conflicts in
the former Yugoslavia during 1991-99.
Refugee-related housing issues form a major
element in the AREA program, because over 1.2 million refugees
and internally displaced persons still required durable solutions,
including housing, at mid-2001. AREA was conceived at a time
when normalcy in the republics of the former Yugoslavia was
slowly returning, and humanitarian aid related to the crises
began to dry up. To some extent this aid has been replaced by development
assistance.
A key consideration in the AREA program therefore
is that (re-) settlement of refugees and internally displaced
persons both in the countries of
origin and in recipient countries must be integrated with the
development of “regular” housing programs in the three countries
most affected by this displacement, i.e. Bosnia and Herzegovina,
Croatia, and the former Federal Republic of Yugoslavia (now
renamed as Serbia and Montenegro).
Pre-war
housing situation
Pre-war housing shortages existed in varying
intensity in these countries. Overall pre-war (1991
censuses) housing stock data and household data suggest that at
that time there was a reasonable supply-demand balance in Bosnia
and Herzegovina, and in Croatia (less so in Serbia and
Montenegro), even though this probably hides regional
differences, and particularly differences between urban and
rural areas in all of these countries. There is selective evidence
that the steady rate of urbanization in combination with
declining household sizes had already led to housing market
tensions in urban areas prior to the Yugoslav regional wars.
Impacts
of the wars and their aftermath
The wars and their aftermath changed this picture
radically: about a million dwelling units were destroyed or
badly damaged and several millions of homeless refugees,
internally displaced persons, and returnees were in need of reconstructed
and/or of additional housing.
In each country, housing production levels
plummeted during the war years and have reached not more than
about one-third of those production levels at present. A major
contributing factor to this decline is that the former public
sector housing delivery mechanism through state enterprises
(which contributed about one-third of the annual housing
production before the wars) hardly exists anymore. Besides that,
little attention has been paid to housing maintenance, particularly of
the publicly owned housing stock, which, however, has now been
largely privatized.
Further demand-side factors have been the steady
decline in average household size and continuing urbanization during
1991-2001 (both accelerated as a result of the wars). These
factors have exercised considerable pressure on the housing
stock, perhaps most strongly in Serbia and Montenegro, where the aggregate
demand-supply imbalances appear largest at present.
An additional problem is impoverishment. Although
no hard data are available to estimate magnitudes, it is clear
that the combination of the wars and the demise of socialist
housing production has created a situation in which even a well-functioning
housing market would only be able to cater to part of the needs,
as purely market-based solutions are bound to be unaffordable to
between 25 and 30% of the population.
Some of this excess demand is being temporarily
absorbed by multiple households occupying existing housing, and
by the emergence of informal settlements at the fringes of major
urban areas, again most significantly in Serbia and Montenegro.
The above picture is further complicated by the
largely completed, arbitrary manner of privatization of the
public housing stock. This was handled primarily through sales
at nominal value to the de-facto occupants, who, however, in a
significant number of cases were not the legal tenants, as these
had fled during the war.
Refugee-related housing issues
Refugee-related housing issues have caused
additional shelter problems in quite different ways in each of
the three countries.
In Bosnia and Herzegovina the predominant need
has been the reconstruction of destroyed or damaged housing for
returning refugees and internally displaced persons, along with the
repossession by the rightful internally displaced person or refugee tenant
of housing that was illegally occupied (mainly by other
internally displaced persons) during the war years.
In Croatia, this last issue is complicated by the
fact that the government had explicitly provided for unlawful
housing occupants in the Law on Temporary Take-over and
Administration of Certain Property (LTTP), which was legislated
during the recent wars. The amended Law on Areas of Special
State Concern (which regulates the property repossession
regime) specifies that properties allocated in the framework of
the LTTP may remain occupied by the temporary users as long as
alternative accommodation is not provided to them. This
effectively prevents the rightful owners (mostly refugees or
internally displaced persons) from repossessing their property until
alternative housing is found for the temporary tenants. In
addition, many refugees currently still living outside Croatia are
former tenants of public housing that was legally sold to the
formerly illegal
temporary occupants.
In Serbia and Montenegro, on the other hand,
there is no significant housing reconstruction issue. The majority of
refugees surveyed in Serbia have indicated their preference for
local integration, rather than for returning to their place of
origin, and this pattern is believed to be the same in
Montenegro. Thus, the refugee-related housing issue in Serbia
and Montenegro is generally seen as an issue of local
settlement.
Housing
sector gaps
Due to the reasons mentioned above, there is a
substantial shortage of housing and related infrastructure in
all of the countries, especially in Serbia and Montenegro.
Numerical estimates of this shortage are difficult to make due
to limited reliable up-to-date statistical information. Clearly, housing market demand in and around the major urban
centers is the highest, while in certain rural areas there is an
oversupply of housing due to the changed socio-economic
conditions (closing of former state factories, and lack of
alternative employment), exacerbating the negative impacts of the wars.
Housing
program requirements
In each of the countries there is therefore a
clear rationale for a significant program of new housing
development, renovation of existing housing, and measures to
enhance the functioning of housing markets. In all three
countries there is a need to establish long-term national
housing and spatial development policies and strategies,
including designing mechanisms for the provision of housing-related land development and infrastructure.
However, these policies must be developed in a
socio-economic environment with relatively limited options for
economic growth, limited capacity to borrow from capital markets, limited financial
sector development, high unemployment levels, and an on-going
privatization process. On the other hand, housing production has
the potential to function as an economic engine, given the
relatively high multiplier impact of investment in housing on
income and employment generation, particularly through its
backward linkages to the construction materials industry.
Housing
policy and program development
Government and private sector responses
to the above issues differ significantly between the countries. Recently, good progress in housing policy and program
development has been made in Croatia with the enactment of the
Law on Socially Subsidized Housing Construction, the allocation
of budgetary resources, as well as mobilizing local and
international capital market resources to address
refugee-related housing issues.
In Bosnia and Herzegovina and in Croatia, the
financial sector has demonstrated serious interest in developing
mortgage-backed housing finance markets, and this has led to
several thousands of such housing loans being approved in each
country.
However, the limited government response capacity
in all of the above countries at a time of economic crisis
(particularly in Bosnia and Herzegovina and in Serbia and
Montenegro) is a matter of serious concern, as it impedes the
realization of the economic potential of a viable and vibrant
housing delivery system. As the post-war situation in these
countries is gradually returning to normalcy, and as the
market-based socio-economic organization of society takes hold,
it is important that concerted efforts are made by the
national governments to develop comprehensive housing policies
appropriate for each country’s circumstances and the financial
capacities of its civil society and government.
As such, emerging efforts towards new housing
policies in these countries are good steps in the right
direction. However, they must be reinforced and nurtured in a
participatory policy development process, bringing together all
major stakeholders (including concerned central government
agencies, local government, financial sector representatives,
housing associations, developers, etc). This process will, of
necessity, have a strong element of learning by doing.
Within the framework of such housing policy
discussions, and in the process of policy and strategy
development, a variety of programs and projects will be
required. The basic precept is that any government intervention
will be intended to leverage private investment, and to assist
the weaker and more vulnerable groups in society.
Given housing requirements in each of the
countries, as well as prevailing financial and operational
implementation constraints, there is a rationale for a program
of some 15,000 housing units each in Bosnia and Herzegovina,
Croatia, and Serbia and Montenegro for implementation over a
five-year time frame, which should include the following features:
(a) legalizing
and developing existing illegal “wild” housing areas, which
have come to house a significant segment of the (peri-)
urban population, including local low- to middle-income
groups, as well as refugees and internally displaced persons;
(b)
more generally,
upgrading, converting, and extending existing housing should
be considered seriously for similar reasons of
cost-effectiveness, particularly where it involves
abandoned, disputed, or partially completed buildings of
intrinsically good quality (some collective refugee centers
have such potential);
(c) new
government subsidized private housing could be developed in
municipalities with high demand levels and significant
proportions of refugees and internally displaced persons; the
municipality concerned should take a lead role in
identifying housing demand and appropriate development sites, as well as
providing serviced land. The technical scope of projects
will vary significantly from place to place, and could
include a range of housing opportunities from self-help
construction to finished dwellings;
(d) in
tenure terms such schemes could have a range of options,
including freehold ownership, lease-purchase, cooperative
ownership, and rental housing; given the privatization of
the former social housing stock, and the high proportion of
refugees and internally displaced people who depend on rental
accommodations, it is particularly important to ensure a
good proportion of new rental housing;
(e) for
any program of apartment development and other forms of
rental housing, considerable attention should be paid to the
issue of housing management, in terms of operation and
maintenance (particularly of the common areas), rent
collection, and tenant relationships;
(f) such
physical development programs must go together with
development of housing finance mechanisms through the
private financial sector, supported by an enabling framework
provided by government;
(g)
government grant
funding support will
need to be increasingly provided through demand-side
subsidies to households based on low incomes, vulnerability,
and refugee/displaced person entitlement criteria, rather
than subsidizing physical structures. This will help enhance
the cost-effectiveness of public intervention.
Institutional development, capacity building, and training
Clearly, the above policies and programs will
require major institutional development, capacity building, and
training, as much of the sketched directions form a departure
from the socialist past. Major efforts will be required to
strengthen the national government departments and agencies which
take the lead in these efforts. In addition, further
institutional development and capacity-building will be required
to enhance capacities of existing local governments, housing
cooperatives, housing associations, and tenants’ associations, as
well as assisting in creating new entities. This will enable all current
and future stakeholders to play more effective roles in the
development process.
In recognition of these requirements,
institutional structures should undertake significant changes.
In particular, the staffing strength of each institution must be
increased both quantitatively and qualitatively. While this is
clear in general, it still needs to be specifically operationalized in
each of the countries by producing institutional development
action plans for the housing sector.
In addition, the above developmental requirements
also generate new education and training needs, for instance in
the areas of property valuation, property title and records
management, housing loan administration, as well as more
generally with regard to housing finance, property management,
and urban land planning. This will require further capacity-building in educational and training institutions in each of the
countries (as part of a housing sector institutional development
action plan, or as part of more broad-based education and
training reforms).
Regional cooperation
Regional cooperation in the above issues has the
potential to significantly enhance national and local housing
development capacities. Specifically, two areas of focus for
this may be singled out as follows:
a) Regional Property Information Exchange
Mechanism
In view of the urgency to enhance and support
the existing commitment and initial efforts by the concerned
governments and the need to achieve effective data exchange
within the shortest possible timeframe as a precondition to
implementation of durable solutions for the remaining 1
million people displaced in the region, there must be put in
place a safe and efficient regional mechanism for exchange
of property-related data in support of existing government
efforts.
b) Enhancing regional capacity in housing
development
Clearly each of the countries in the region has much to
learn from one another’s efforts as they chart through
significantly unexplored areas in developing their housing
sectors and in dealing with sustainable solutions for
refugees and internally displaced persons.
To some extent,
regional information exchange is already taking place, but there
is a strong case to be made for enhanced and more organized
exchanges of good housing practice, through study visits,
case-study documentation, and other forms of interaction and
dissemination. This applies similarly to the development and
exchange of training and education curricula that relates to new
ideas and initiatives, while there may also be a case for
regionally-based specialized training programs.
Role of
international support
There are several areas for which international
support will be appropriate, as follows:
a) Capacity-building technical assistance
support
The policy, project, and program development
ideas suggested above, as well as the capacity-building
measures proposed, will not come about automatically. The
international community, particularly the bilateral donor
agencies and UN agencies, will have a major catalyzing
role to play in supporting these new
initiatives with capacity-building and technical-assistance
support.
b)
Housing finance support
The larger development support agencies, such
as the international development banks and the European
Commission are well-placed to support Bosnia and
Herzegovina, Croatia, and Serbia and Montenegro in financing
housing development programs. This is so not only because of
the stream of concessionary loans and grants such agencies
can provide to finance housing development and management,
but more importantly because of their ability to support the
creation and strengthening of housing finance systems and
mechanisms to leverage domestic and international commercial
investment in the private housing sector.
c) Regional
property information exchange
Considering the above urgent regional need
for resolution of refugees’ and internally displaced persons’ housing
property claims, international support will be required for
the development of a regional mechanism of property
information exchange along the lines described above. The
ultimate goal of international support for such an
initiative will be to establish national data management
capacity in all fields related to migration and displacement
in line with international standards, consequently
facilitating national, regional, and international exchange
of information, through an Information Exchange Mechanism.
d)
Regional exchange of good housing practice
As noted above, there is a clear need for
increased exchanges of good housing practice, through study
visits, seminars, case-study documentation, and other forms
of dissemination. This includes the development and exchange
of training and education curricula development as they
relate to new subject areas, and for
regionally-based specialized training programs.
International support will be required to more closely
identify the specific needs and to support the countries in
the region to establish appropriate mechanisms, including
the strengthening and equipping of specific training and
capacity-building institutions for this purpose in each
country.
Emiel
Wegelin is Vice Chair of Global
Urban Development, Director of UrbAct in Rotterdam, the
Netherlands, and former Coordinator of the United Nations/World
Bank Urban Management Program (UMP). Dr. Wegelin is the author
of Housing the Urban Poor, Urban Low-Income Housing and
Development, and New Approaches in Urban Services Delivery,
and co-author of Governing Cities and Shelter
Upgrading for the Urban Poor. This article is a
summarized version of an article by Emiel Wegelin entitled
“Refugee-related Housing Issues in selected SEE Countries" in
Housing in South Eastern Europe (Paris: Council of Europe
Development Bank and the World Bank, March 2004), and is
reprinted with the permission of the author. The consulting work
underlying this article was conducted for the Migration, Asylum,
and Refugee Return Initiative (MARRI) of the Stability Pact for
South Eastern Europe, with Swiss Development
Cooperation support.
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