30 MILLION MARKS FOR B&H FROM THE EUROPEAN COMMISSION

Credit for Housing

AIM Sarajevo, 20 February, 1998

Refugees, displaced persons, but all the other homeless persons in B&H who were left without their own roof above their heads by the war and were not lucky enough to have their homes reconstructed within some of the humanitarian projects, will be given the opportunity to do it with the assistance of a longterm credit which they will, of course, return. The European Commission has allocated 30 million marks into a special fund intended for extending credit to citizens for reconstruction and construction of housing units. German bank KfW was charged with management of the fund, while credit to the citizens will be offered through B&H banks. It has not been definitely decided which banks will actually do it, because they will be chosen according to the results achieved so far. It is almost certain, however, that they will mostly be private banks, with no inherited "mortgages" from the past.

If return of refugees and banished persons to their prewar homes is the condition for stable peace in B&H, meeting of this condition will depend primarily on political readiness of the administration in both B&H entities, but also on the quantity of the available money for reconstruction of the destroyed housing. All the initiatives for implementation of the provisions from Annex 7 of the Dayton accords which prescribes return of everybody to their homes, sometimes stuck due to a purely technical issue - lack of housing.

After four years of war devastation in B&H, on the territory of B&H Federation, 50 per cent of the housing units were more or less damaged, and about six per cent of houses and apartments were totally destroyed. On the territory of Republica Srpska, it is evaluated that about 24 per cent of housing units have been damaged, and about 5 per cent of the total prewar number were completely destroyed.

The strained atmosphere on the territory of B&H Federation created by the announced passing of the law on housing relations which is expected to enable return of prewar tenants to their apartments is essentially motivated by fear of temporary tenants that they will lose the roof over their heads. This fear was skilfully used by both ruling parties in B&H Federation - the Party of Democratic Action (SDA) and the Croat Democratic Community (HDZ) - on the eve of the past elections, hinting more or less directly that temporary users will become permanent tenants. However, even possible keeping of this promise would not resolve the problem of homeless persons in B&H, but especially in large urban centres such as Sarajevo, Zenica, Mostar or Banja Luka. Although the domestic officials, when need arises, tend to refer to the results of the 1991 census, according to which the number of households was almost equal to the number of housing units in B&H, in practice the situation was somehow different.

Statisticians counted as housing units both apartments and privately owned houses, but also weekend houses and long abandoned houses in villages which had not been inhabited for decades. What the prewar situation with housing units was actually like was best known to a large number of subtenants.

In fact, nowadays in B&H there is not a sufficient number of housing units in view of the number of inhabitants displaced all around B&H, the newly arrived citizens such as Croatian Serbs or Bosniacs from Sandzak, but espacially more than 200 thousand refugees abroad who will, all things considered, "voluntarily, because they must" leave their temporary hosts in the West and hurry into the arms of their homeland. Despite the impressive figures which testify about the so far spent hundreds million dollars for reconstruction of B&H, the poorest results were achieved in the field of the housing fund. What was done was mostly "patching up" and "making up" of the less damaged housing units, the reconstruction of which demanded too much money, and the "polished up" buildings created an illusion that something was seriously done in this field.

It would be unfair to lay the blame solely on the international community. With no need the domestic athorities have postponed passing of privatization laws, including those which refer to housing unity, and the foreigners were not too entusiastic to spend their money for reconstructioon of something the owner of which was not precisely defined. Insisting of the international community on return of everybody to their homes seems to be something more than merely empty talk. The first specific step in this direction was the Sarajevo conference on return of pre-war inhabitants to this city. Since a declaration with clearly set time limits and the number of expected returnees about which the current federal authorities were not even consulted, establishment of the credit line with the money of the European Commission creates a true possibility for building a roof above the heads of ones but at the same time not throwing others out into the street.

In view of the inclination of the people in the Balkans to squander other people's money, especially when it is in a pile, 30 million marks will be used for granting credit to individuals in order to enable them to reconstruct or construct their homes. The amounts of the credit will range between 2,500 and 35,000 marks, and the time limit for paying it back between three and twelve years, depending on the amount of the granted credit. The time limit for a credit of 3,000 German marks, will be three to five years, for a credit of 15,000 marks five to eight years, while for a credit of 35 thousand, the time limit to return it will be between eight and twelve years. The interest rate for the credit will be three per cent a year plus banking expenses.

The guarantor for the German bank KfW will be a local bank and not the end user, which means that the domestic bankers, out of their own interest, will be forced to take care who the credit will be granted to, so they will introduce mortgages to be on the safe side. The first credit should be granted in June this year already, and the project would first start on the territory of Sarajevo and the Una-Sana canton, and them it should spread to the regions of Doboj and Posavina. If judging by the initial calculations of the bankers, for the amount of the credit of 35 thousand German marks with the time limit for its return of 12 years, a montly instalment could be about 260 marks. Will the homeless persons be able to set aside that much is a different question. Since it is stated in the project that this money was intended "for reconstruction of housing units and construction of new ones", it would be logical that a sufficient number of buyers would appear who would be a sufficient warranty for initiation of constructing of new housing units, which again implies opening of new jobs.

The final result of this project of the European Commission should be more new homes in B&H. At the same time the current entity authorities would be deprived of their pretext of "the lack of housing units" which is abundantly used nowadays in order to conceal the lack of will to meet the taken obligation to enable prewar tenants to return to their homes.

Drazen SIMIC

(AIM, Sarajevo)