Neither for lease nor for sale - new terms of use for housing concessional loans

April 22, 2016 18:31

On June 1st, 2013 Presidential Decree No 246 came to effect, which changed the terms of government support to housing construction.

Substantial state support to housing construction industry resulted in the newly built housing used as additional income source. With the new regulation the state is trying to limit the support only to those really in need to improve their living conditions. The remaining population is offered to engage in lease housing construction instead of private housing, which is the ultimate goal of the housing industry reform.

In 2013, in accordance with the approved plans for the housing construction, Belarus plans to build 6,500 thousand square meters of housing, including 2,500 square meters to be built with state support. BYR 10 trillion was allocated in the state budget for concessional loans. Housing construction for the needy in Belarus has become a kind of business for savvy citizens.

These apartments were used in two ways: they were leased off (state loan interest rates were low while proceeds from renting covered the loan payments and provided additional incomes) or sold, thereby deliberately deteriorating the living conditions and acquiring the right for another soft loan for the housing construction. Alternatively, families could go through fictitious divorces to gain the right for soft housing construction loan for a spouse.

Recent amendments restrict these apartments’ sales: there is a five-year ban on sale of an apartment built with a soft loan from the government and residents who have already built apartments using soft loans as well as their family members lose the right for the second loan. The time will show whether the new regulations will be effective. Regarding lease rules for these apartments, the changes will not have drastic effect. Residents might chose living in the newly built, using government soft loans, apartment and lease out their old apartment to which the terms do not apply. However that might increase rental costs.

The changes envisage on the one hand reducing fraud with housing built on favorable terms and on the other hand to limit the number of potential beneficiaries in the future. In the long term, it is anticipated that the volume of housing built with state support will reduce and mass construction of rental housing will develop. With the development of rental housing the state gets fairly stable and secure proceeds from rental housing, and will achieve redistribution of valuable specialists and labor resources in various locations. Housing free of charge would only be available to large families and power structures representatives. The government will stop funding the massive concessional housing construction for a large share of the population.

Thus, the state is gradually reducing social benefits for the population. The number of potential beneficiaries from the real estate market will be reduced substantially. Simultaneously, by closing the opportunity to build own housing, the “anchor” holding the labor force in the country may be lost, forcing people to look for other opportunities in other countries.

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The Belarusian authorities have launched a discussion on the moratorium or abolition of the death penalty under the pressure of Belarusian human rights activists and international community. Apparently, the authorities are interested in monitoring public sentiments and response to the possible abolition of the capital punishment. The introduction of a moratorium on the death penalty would depend on the dynamics in Belarusian-European relations, efforts of the civil society organisations and Western capitals.

In Grodno last week, the possibility of abolishing the death penalty in Belarus or introducing a moratorium was discussed.

The Belarusian authorities are likely to continue to support the death penalty in Belarus. During his rule, President Lukashenka pardoned only one person, and courts sentenced to death more than 400 people since the early 1990s. Over the past year, Belarusian courts sentenced to death several persons and one person was executed.

There are no recent independent polls about people’s attitude about the death penalty in Belarus. Apparently, this issue is not a priority for the population. In many ways, public opinion about the abolition of the death penalty would depend on the tone of the state-owned media reports.

That said, the Belarusian Orthodox Church and the Roman-Catholic Church stand for the abolition of the capital punishment, however their efforts in this regard only limit to public statements about their stance. Simultaneously, the authorities could have influenced public opinion about the death penalty through a focused media campaign in the state media. As they did, for example, with the nuclear power plant construction in Astravets. Initially unpopular project of the NPP construction was broadly promoted in the state media, and eventually, according to independent pollsters, was accepted by most population.