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The Role of Housing Policy in the Transformation Process of Central-East European Cities

European Urban Observatory, X303 St Philips, London School of Economics, Houghton St, London WC2A 2AE, UK

This paper is concerned with a process of housing privatisation and urban revitalisation in the transformation of central-east European cities. Today central-east Europe is approaching the political and economic system that prevails in western Europe. Reforms require the extensive privatisation of firms as well as land and housing. The housing privatisation process includes changing the ownership and management of the housing stock, and a new system of housing finance. These processes will influence new housing construction and the modernisation and rehabilitation of the existing housing stock. The change in housing policy and the increasing polarisation within society may result in transformation of the social and physical structure of the city. Larger and, especially, capital cities in central-east Europe are the most attractive locations for business investments and property development, but consequences can be highly selective. Despite dominant or privileged positions in national and, increasingly, international economies, cities could face certain problems in the future with social polarisation, residential segregation, decentralisation of economic activities and rising unemployment. Therefore, the question is: will housing privatisation in central-east European cities lead to better chances for rehabilitation or just the opposite? Housing privatisation in central-east European cities will have an impact on gentrification and the rehabilitation of older housing areas in inner cities, within the context of political and economic restructuring, urban planning policies and the dynamics of the real estate market. All these factors will determine the future of housing and urban development. The availability of funds will be one of the main questions for the future rehabilitation process in central-east European cities. Another important factor will be the degree to which urban governments become proactive. An innovative housing and urban policy and, a policy and technical 'know-how' assistance from western Europe might well be a success.

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