Mechanisms of property ownership change and social change in inner-city Warsaw (Poland)

Abstract

Taking a production-side approach, the article discusses how property restitution and privatisation have created rent and value gaps, and influenced social change in the inner city of Warsaw (Poland). Specifically, a rent gap (resulting from restitution) and a value gap (created by low-cost privatisation) are hypothesised to have produced different ownership structures in pre-war residential buildings, with different implications for social change. These effects are assumed to be modulated by three factors: legal constraints, availability of private capital and changing residential preferences. The main findings show that the national legislation and municipal regulations with respect to low cost privatisation created the value gap and favoured intergenerational property transfer and lower residential mobility. The value gap has been eliminated by the changes in municipal regulations. Second, a lack of private capital was a key element in disinvestment in the 1990s, and private developers have since become key actors in shaping the housing offer and have triggered intensive gentrification. Third, residential choices often follow family reasons (inheritance of a unit), and are loosely coupled with a ‘back to the city’ movement. The contemporary choices of many newcomers are still embedded in opportunities created by earlier privatisation. Finally, former municipal tenants in restituted buildings come under pressure from new, private owners to leave their homes. Paradoxically, restitution, seen as a mechanism for social justice, has led to social injustice. Overall, it appears that both privatisation and restitution have fuelled problems of affordability, and led to the exclusion of lower-income households from the housing market.