Association of Cities in the Republic of Croatia
UGRH
UGRH is a national organization of local authorities in Croatia gathering 126 out of 128 cities of all sizes with the purpose of strengthening the position and quality of local government.
ID: 155145314089-94
Lobbying Activity
Response to European Affordable Housing Plan
3 Jun 2025
As a national association of towns and cities in Croatia we support the Commission's plan to tackle the issue of affordable housing. Few months ago, the Republic of Croatia adopted its first ever National plan for housing policy until 2030. Its strategic approach is based on the utilization of four leverages: tax and fiscal policies, land use measures, and energy efficiency framework. The analysis showed Croatia is facing several negative trends that are affecting the level of housing affordability - overall population decline accompanied by the rural migration to urban centers; attractiveness of the real estate market for investments (especially in coastal area and capital city); rise of housing prices (around 53-54% increase in 5 year period 2020-2024). This produced a housing gap in the Republic of Croatia that amounted to slightly less than 237,000 households. in 2021. Additional analysis identified groups of local units that share similarities in the nature of their housing needs. The methodology divided local self-government units into five groups that differ from each other and whose differences should be taken into account when formulating public policy measures aimed for housing affordability. This approach should be considered when drafting the European affordable housing plan - one-size approach can't fit all the regional diversity and specific needs in MS, so the principle of subsidiarity should be respected from the beginning. Croatian cities don't have a extensive experience in providing affordable housing but some common and usual policy measures have been identified: exemption from payment of part or all of the municipal fees linked to the construction of family houses; transfer of building rights on real estates owned by the city; subsidizing the purchase of construction land or subsidizing costs related to the construction of the first real estate, such as obtaining building permits or purchasing construction materials. There are other measures as well (eg. subsidizing housing loan interest; financial grants for the purchase, renovation and/or adaptation of apartments and houses) but those are measures that mostly stimulate demand rather than supply of housing. In few local examples the housing gap was addressed by initiating housing projects in brownfield real estates (eg. old ex-military barracks). Fex other examples show the possibilities and limits in housing construction led by local authorities (eg. Zagreb, Dubrovnik and Slavonski Brod). Due to that, there is a clear need for direct investments in public housing. The private sector and market haven't been interested in providing affordable housing up to now and this can only be leveraged with stronger investment by public sector. In that sense, we welcome any support that can be provided to the stakeholders local level: eg. grants and loans, knowledge exchange, examples of good practices from other MS in areas of housing, urban and spatial planning, construction, etc. The European affordable housing plan should foresee options to support local authorities which capacities are insufficient for planning and implementing sound housing policies and projects. Croatia is severely lacking in housing cooperatives, some reasons for that could be found in cultural preferences (high rate of home ownership, distrust towards cooperatives as unreliable ''socialist fabrications'', low level of local of participatory initiatives, individualist outlook on life, etc...) but the generational change in demography opens the opportunity to change the current status (there are two recent initiatives for housing cooperatives in Croatia: one in the city of Križevci and the other in city of Pula). This kind of initiatives should be supported by the European affordable housing plan as well.
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