Ministry of Investment Planning Is Working on a Sustainable Model To Enhance the Economic Activity

Ministry of Investment Planning (MIP) is working on a sustainable model to enhance the economic activity. A part of this model is the development of social housing fund. The sustainable model for enhancing economic activity provides that the construction of social buildings will be not only in Sofia and in cities where there is population and economic growth, but also in other places in the country. This will enable to solve the problem of the demographic crisis and to fight against poverty by region and step towards the integration of socially disadvantaged sections of society.

Regulations for use of social housing are to be developed. The idea is to provide favorable conditions for housing of all needy sections of society: young, low-income families, the elderly and other disadvantaged people. Minority representatives will also be able to use social housing, but mostly those who work and are able to pay rents or payments for use or purchase of social housing.

The vision of the Ministry of Investment Planning is based on the European practice and the idea of establishing joint investment initiatives between municipalities, the state and private investors for building social housing fund. The experts at the Ministry are at the stage of studying the needs of the municipalities of social housing, as well as conducting a survey on state and municipal property, which may be provided for joint investment initiatives. Currently the conditions are being specified that can be proposed to the business to be attracted to invest in social housing.

All 264 municipalities in Bulgaria have been questioned by the Ministry of Investment Planning. Following detailed analysis and assessment of their answers specific forms of collaboration will be carried out.  

The concept of joint investment initiatives provides as follows:

The state will participate by providing free land for construction or low-interest loans for construction, for this purpose the creation of a financial housing fund is predicted. 

Municipalities will participate by providing free land for construction. 

The business will participate in the construction, management and maintenance of social housing by investing own funds against receiving certain rights.

European practices in the field of social housing finance and the principles and mechanisms of functioning funds in Bulgaria are also subject to research and analysis.

Priority of the legislative regulation of the fund will be to provide the widest range of options for raising funds from sources that fit the model of social assistance: grants, interest free or low interest credit lines, fees and revenues from taxes etc.

At this early stage it is impossible to specify the terms for establishment of the fund, and specific sources. Nevertheless it is foreseen the social housing fund to be regulated in a way that allows freedom in fundraising and independence from situational circumstances, because its purpose will be to conduct long-term social housing policy.