Judges to lose cheap apartments

The City Council is looking to cancel discounted flats for wealthy tenants

Judges and state prosecutors in Prague will lose some of their subsidized apartments. The City Council has decided not to extend the current leases, which are at far below the normal rent rates for the city.

The reason is that judges and prosecutors have a salary sufficient enough that they do not need preferential rent. The city rents 81 apartments to the courts, out of which 49 are for former or current judges and state prosecutors.

The rest are designated for court employees who get a moderate salary. The city will not be canceling those leases.

Judges and prosecutors usually pay rents of Kč 60 to Kč 70 per square meter. The average market rent in Prague in the third quarter of 2018 was Kč 345 per square meter, according to industry analysts.

City Councilor Adam Zábranský (Pirates), responsible for housing, said the flats in question are mostly larger ones of a type that is in short supply. The city could use them for socially needy families rather than people with high incomes.

Of the 49 affected dwellings, 28 of them have a fixed-term contract where the contracts are closed for two years and are automatically extended. The city said that current contracts that expire this year and next year will not be renewed. In the case of indefinite tenants, the situation is more complex because if the tenant pays the rent, the municipality cannot unilaterally cancel the contract.

Zábranský said the city will gradually increase rents by 20 percent over a three-year period. This is the maximum the law allows.

The Pirate Party first drew attention to the issue in 2017, but at that time was not in a position to address the topic as they were not in power.

The flats used by judges and prosecutors are not the only ones that might eventually be affected. Some 3,000 city-owned flats are rented out at below market value with no specific justification.

Zábranský wants to have talks in the second half of January to look into the issue and possibly privatize some city-owned flats.

Prague has a housing shortage, due to several factors. In much of the city, there is a height limit on buildings, which limits the number of flats that a project can have. The city also has one of the most difficult permitting processes in Europe. It can take up to 10 years to get permission to build. By that time, projects are often already outdated before they start.

The problem affects low-income families in particular, as developers tend to build high-end projects that sell for more money, while there is little incentive to build for low-income people.

Real estate speculation has also contributed to the problem since many flats sit unoccupied as investments. Finally, using flats for short-term tourist rentals has taken thousands of residential units out of the market.

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