Polish government ministers clash over cuts to social housing budget

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Notes from Poland is run by a small editorial team and is published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Two ministers in Poland’s coalition government have clashed over the budget for social housing. One claims it has been slashed “through the back door”. Her colleague, however, denies that and notes that the funds in question were redirected to support victims of last year’s devastating floods.

Regional policy minister Katarzyna Pełczyńska-Nałęcz, a member of the centrist Poland 2050 (Polska 2050) party, wrote on social media that the coalition had promised 1.1 billion zloty (€261 million) for social housing and the finance minister had agreed to a further 1 billion.

However, “through the ‘back door’, funds for social housing were cut to just 618 million zloty”, she claimed, noting that this was four times less than was spent under the former Law and Justice (PiS) government in 2023.

In response to Pełczyńska-Nałęcz’s post, her government colleague, development minister Krzysztof Paszyk of the centre-right Polish People’s Party (PSL), wrote that “the funds you are writing about were transferred to help those affected by last year’s flood – specifically to rebuild their homes”.

“Of course, we will look for money for social housing,” added Paszyk.

However, Pełczyńska-Nałęcz responded with another entry in which she recalled that flood victims were supposed to be supported using funds from the unimplemented programme of loan subsidies for first-time buyers.

She also asked whether the funds to help flood victims – to whom, she stressed, help was “indisputably” due – could not have come from cutting other spending, such as on state broadcaster TVP or the Church Fund, a programme that supports religious organisations and the clergy.

“Do we really need to cut from an area that Poles consider crucial to their quality of life?” she asked. “At a time when our economy is growing well, is the coalition’s ambitious housing policy really [just] 600 million zloty.”

Pełczyńska-Nałęcz was backed by Szymon Hołownia, the leader of her Poland 2050 party and speaker of the Sejm, the lower house of parliament.

“We have to find this money somewhere else. It has to be found in the budget, in the amount we agreed on. Because the Polish state cannot afford another year of not solving the [housing] crisis,” he said, quoted by the Polish Press Agency (PAP).

Meanwhile, Adrian Zandberg, an MP and presidential candidate for the small left-wing Razem party, which is not part of the ruling coalition, called on Paszyk to resign. “As a result of Minister Paszyk’s indolence, EU money that could have been used to build housing will be at risk,” he said.

Zandberg suggested, however, Pełczyńska-Nałęcz should not be shocked. “Everything was known in advance. It was enough to look at the tables and read them with understanding before the budget vote,” he added, quoted by PAP.

Deputy parliamentary speaker Piotr Zgorzelski, who is from Paszyk’s PSL party, also noted that Pełczyńska-Nałęcz should have known that some of the funds from social housing were given to housing for flood victims.

“There was a government bill, and in the Sejm, we also voted on this,” he told Polsat News.

Poland faces a lack of housing, with estimates of the deficit ranging up to two million units. Last year, the country experienced some of Europe’s fastest housing price rises.

The ruling coalition pledged to address the housing crisis, but more than a year after coming to power it remains divided on the best approach. PSL supports continuing a mortgage subsidy programme of the type introduced under the former PiS government, which proved highly popular.

However, the low-cost credit scheme, designed to aid first-time buyers, has faced strong opposition from The Left (Lewica), which is also part of the ruling coalition, and Poland 2050. They argue that it causes further increases in housing prices. The Left instead advocates for the state to increase the supply of low-cost rental housing.

After a year of discussions, the development ministry, led by Paszyk, scrapped its proposed mortgage subsidy plan.

One of the main funding sources for social housing investments is the so-called Subsidy Fund (Fundusz Dopłat), managed by the state-owned Bank Gospodarstwa Krajowego (BGK).

While municipalities across the country are keen to build, the BGK has yet to process many of their applications, reports the Dziennik Gazeta Prawna daily.

Although the state budget includes funds for housing, the Subsidy Fund’s spending limit is set by law. If the law is not changed, only 618.9 million zloty will be available for payments from the fund this year, with the remainder directed towards post-flood recovery and other measures, said the newspaper.

The limit was to be increased by a draft law proposed last year by a deputy development minister from The Left, but it has remained stalled since September. It is awaiting approval from the cabinet before it can be sent to parliament.

Pełczyńska-Nałęcz said that Poland 2050 party has also tabled a bill to increase the limit by 1 billion zloty and “expects the support of coalition partners”.

Notes from Poland is run by a small editorial team and published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Main image credit: Adam Jones/Flickr (under CC BY 2.0)

Alicja Ptak

Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.