The deficit of 212,000 houses in Greece, the death of OEK and the… housing policy of the ND for the benefit of banks and contractors.
When the domestic media write every three months that real estate prices and rents increased by an additional 10% compared to last year, the “Economist” puts Athens on the list of European cities with the most expensive rents compared to wages and the IMF hints that there is a bubble in Greek real estate, we understand that the problem of the expensive roof has gone bad.
According to a study by Piraeus Bank, there is a lack of housing. And this is because when in 2012 the memorandum taxes were imposed on property ownership (EITIDDE, ENFIA, etc.) amid conditions of collapsing incomes, the magnitude of the shock led to a vertical drop in both property prices and construction activity. Consequently in the decade 2012-22 the issuance of building permits reached an absolute historical nadir, with the result that today there is a shortfall of 212,000 homes on the market in relation to demand. This deficit pushes up property prices and rents – a trend that will strengthen until the looming increase in construction and real estate investment drives price equilibrium to new levels. Conclusion: those who got a second job to pay the rent will get a third one…
A key event, which the Piraeus Bank study does not appreciate, is the sudden death of the Workers’ Housing Organization (ÖK) in the same year as the sinking of building permits. The only social housing agency in Greece with the huge project (built 50,000 houses for the same number of households in 55 years, i.e. about 9,000 houses a year, provided purchase, construction or repair loans to another 340,000 households, interest subsidy to 85,000 and rent subsidy to 900,000) was abolished in February 2012 under the terms of the second memorandum. “The abolition of the OEK will mean the end of affordable housing for households in Greece” warned the then president of the European Confederation of Cooperative and Social Housing (CECODHAS Housing Europe) Vit Vanicek in a letter to the then competent Minister of Labor and Social Insurance Giorgos Koutroumanis, with which he called on him to take back the government’s decision. Today it proves how right he was.
The Samara-Venizelou government never explained why it abolished the OEK. Nor did he deny the complaints of employees and GSEE that he did it to get the amounts from the contributions of employees and employers that the IKA collected on his behalf but did not return.
According to the last written update (September 2011) of the then Minister of Social Security G. Koutroumanis, the debt of the IKA to the OEK until 31.12.2010 was 2.018 billion euros on an accounting basis or 1.646 billion euros on a cash basis – because many employers they had not paid contributions. From this money, the public had paid OEK for 2010 “against” an amount of 355.7 million euros, so there was a cash debt of 1.291 billion euros.
With the sudden death of OEK, 1.291 billion euros were lost in the “bucket” of the IKA. Another 1.2 billion euros was the amount owed by the beneficiaries of OEK loans – left in the air with its abolition – to the organization.
The additional lost amounts from contributions
Documento also calculated from data obtained from former OEK workers circles that an additional amount of at least 500 million euros or 250 million per year was lost in the IKA “bucket” for the years 2011-12, during which the IKA continued to collect contributions from employers and employees, and at least 800 million euros or 200 million euros per year for the four years 2013-16, during which the IKA collected contributions from employees. Finally, another 450 million euros were lost which were the OEK’s reserves.
We had to reach 2017 for the EFKA to start paying, based on its founding law, every year all the contributions collected in favor of OEK to the OAED, i.e. an amount of around 250 billion euros until 2021 (the year in which the ND abolished the contributions in favor of OEK for private sector workers), and about 100 million euros from the contributions still paid only by public sector workers from 2022. In 2017, the repayments of capital and debt installments of workers’ housing also started, when the SYRIZA government began to resolve the outstanding issues of the OEK and advanced the procedures for the costing of 35,000 workers’ homes of the organization at particularly low prices of 300 euros per square meter. so that they pass to the beneficiary households, while he gave a horizontal haircut of 40% of rent subsidy to 62,000 beneficiaries for the housing loans that had been granted by banks – that is, applying policies with a strong social sign, which he never communicated.
Trade union circles stated in Documento that, in all probability, from this money that began to flow into the coffers of OAED, the successor of OEK, from 2017 onwards, the reserves of 1.5 billion euros were formed which, according to the statement of Spyros Protopsaltis to the Commission of Social Affairs of the Parliament are in DYPA. In other words, with the additions, it follows that with the government policies of the five-year period 2012-17, OEK lost reserves of 3 billion euros, but also many of the 221 privately owned plots of land with a total area of 5,233 hectares in 45 prefectures of the country that it possessed in 2012, which they had granted municipalities and churches to erect workers’ housing but they were taken back after ten years of inactivity.
The lost opportunity of the Recovery Fund
Somehow we reached 2019 and Kyriakos Mitsotakis came to power who saw housing as an investment product and the Golden Visa and Airbnb, so within two years from 2021, according to Eurostat data, Greece ended up having the highest rate of “excessive housing cost burden” in the EU-27, an indicator indicating the part of the population that pays more than 40% of their income for housing (rents, mortgage servicing costs, heating, electricity costs, etc.) .
In 2021, with the end of the pandemic, the ND government could use the funds from the Recovery Fund to finance affordable social housing programs, as most European states have done. But he didn’t.
Thus, a year and a half passed during which housing costs (according to ELSTAT data from May 2021 to May 2022) experienced an explosive increase of 36.1% while wages remained stagnant. There, the problem of expensive rents, combined with the inability of young people to rent a house, rose high in the public debate, so the ND, heading towards the 2023 elections, chose to announce – with the necessary euphoric tones – the “return of housing policy” in Greece with a special focus on young people.
Sp. Protopsaltis suddenly discovered as the commander of DYPA the reserves of the former OEK and while for a whole year he refused to accept the representatives of the workers of the abolished organization who have remained in DYPA and know in depth its work, he started to advertise the new, modern Mitsotakis housing policy as a “model of upgrading the public sector”.
Benefit to bankers and individuals
A policy that includes a bogus housing policy for the benefit of banks and contractors:
The “Spiti mou” program ran during the two consecutive pre-election periods with the clear aim of influencing the vote of young people in favor of the ND. Under the terms of this program, 12,000 individuals or couples aged 25-39 received a low-interest loan for the purchase of a first home, of which 75% of the amount was interest-free from DYPA’s reserves and the remaining 25% at an interest rate of 6.5% from the banks. Officially, the program was implemented by DYPA, which put in 750 million euros, i.e. half of its reserves, but the program was managed exclusively by the banks.
The “Renovate-rent” program, with a budget of 50 million euros, will subsidize the costs of renovating a home by up to 40% and up to 10,000 euros so that it can be rented out for three years – but without any provision that the apartment renovated with state money will be rented out with low rent to vulnerable groups. We are talking about a program-reduction of sloppiness as, despite its continuous advertising by Mitsotakis and Protopsaltis, its start is constantly postponed because the Ministry of Labor rejected the DYPA budget because it uses funds from the Recovery Fund and not from the former OEK. This is perhaps a unique case where a public service announces and advertises a program and after three months discovers that there is no legislation to ensure its funding.
The “Social compensation” program, under which DYPA will supposedly “use” the real estate – what is left – of the former OEK for housing projects, which will not, however, resemble the “old-fashioned” programs of the OEK. According to Sp. Protopsaltis, there are PPPs and private contractors for this work. So the plan is to give the DYPA plots to contractors to build them and either they take 30% of the new buildings and give the remaining 70% to DYPA to make available to new couples or they keep the exploitation of the properties until cover their costs and “desired” profits and later hand them over to DYPA, on the condition that part of the housing will be made available at a reduced rent to vulnerable groups.
“Social consideration” and the interest in expensive fillets
According to statements from trade union circles in Documento, it is most likely that the “Social compensation” program will be launched because some private contractors with a great interest in the expensive fillets still available to DYPA as the heir of OEK (e.g. in Kifissia) , Lykovrysi, Thessaloniki), in order to manufacture and sell at high prices. However, no private individual will show the same interest in the dozens of other DYPA plots that are left, which if left undeveloped, will soon be lost returning to their original donors.
This falsely labeled housing policy of the ND – “an example of innovative public policy” according to Protopsaltis – has already sacrificed half of the reserves of the former OEK to subsidize the profits of the banks and is now coming to definitively abolish the housing part of DYPA, promoting the delivery of the last plots of to private contractors. And the worst: thus exhausting even the last resources of the former OEK in land and money, it undermines every prospect for the exercise of a political social shelter that Greek society so needs.
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Hatzidaki’s secret amendment with favors in favor of the servicers in the Parliament
The 10% down payment to servicers is a trap for borrowers: It is not provided for in the Community directive – Question SYRIZA
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