Bucharest’s housing crisis: post-Communist restitution victimises Roma

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Twenty-five Roma families were evicted from an apartment block in Vulturilor Street, Bucharest, in 2014, turned out of homes they had rented from the state for nearly 20 years. The entrance to their alleyway was sealed off with a metal sheet.

Maria Ursu, 58, was devastated at being evicted, although she knew she would have to leave for sometime because the small, poorly-maintained houses in her area – a working-class neighbourhood near the city centre – are gradually being reclaimed by former owners.

She earns US$195 a month as a social worker in a retirement home and has never had the money to rent at market rates, let alone buy. Her generation’s dream of owning their own homes now seems far out of reach.

Since their eviction, she and a few neighbours have camped in the street, in front of the building. Banners on their makeshift shelters read: “A home, whatever your ethnicity” and “Down with the real-estate mafia”. Their plight casts a different light on Romania’s home-ownership-for-all policy, adopted after the fall of the Communist regime.

Romania today has the highest level of home ownership in the European Union, because of the many individual houses in rural areas, and because of the sale of most state-owned apartments to their tenants.

 
Ownership for some

In the early 1990s Romania’s first post-Communist president, Ion Iliescu, authorised these sales at highly attractive prices. Bucharest’s city hall claims that 95 per cent were bought by their occupiers; but Romania’s poorest, who include the Roma, have never had the money.

In 1948 the Communist regime nationalised major enterprises, banks and housing. Between 1950 and 1989, 400,000 properties were brought into the public portfolio. When Ceaușescu fell in 1989, the state had huge assets.

In Bucharest, Icral – the state enterprise responsible for the construction, repair and management of housing – managed 450,000 homes, mostly nationalised properties, but also the huge apartment blocks built by the Ceaușescu regime from 1975.

Since then, successive governments have faced claims from dispossessed owners. After much hesitation, and pressure from the European Union, the Romanian parliament passed a law to resolve the issue in 2001.

Unlike other central European countries, which established financial compensation systems, Romania decided to return the properties to their former owners or their heirs. Compensation was reserved for where restitution was no longer possible.

The law provided some protection for tenants by requiring owners who had recovered their property to offer them a five-year tenancy agreement, to give the state time to re-house them. It also required Icral (renamed AFI in 1989) to offer alternative accommodation to those evicted.

But the authorities were overwhelmed by the numbers of applications for restitution, and the tenants of the properties became the losers in Romania’s post-Communist transition. According to local activists, several thousand have been evicted in Bucharest.

Bucharest has 10,000 applications for social housing outstanding, of which at least 3,422 relate directly to people evicted or about to be so. In 2015 the city had only 1,516 social housing units (all occupied) for a population of 1.9 million.

Bucharest’s city hall claims it has no money to build more, but Veda Popovici, a founding member of the Common Front for the Right to Housing (FCDL), established in 2014, refuses to accept this. “It’s a question of priorities, not of money,” Popovici says. “City hall would rather redo the thermal insulation of apartment blocks, which wins votes, than build housing for the poor. They only buy housing as a demagogic gesture, or when they really can’t avoid it.”

When the historic centre was renovated to promote tourism, city hall moved hundreds of residents of the once lively, working-class neighbourhood to social housing on the outskirts.

Cezar Soare, secretary of state at the regional development ministry, claims the government fulfilled its obligations in 2015 by providing 2,800 dwellings. Activists are outraged: “That’s an insignificant number compared with Romania’s needs,” says Victor Vozian of the FCDL.

In response to the Vulturilor Street community’s demands for permanent accommodation, the mayor of Bucharest’s 3rd district has offered only temporary solutions, including a US$220 allowance, supposed to cover six month’s rent in the private sector. Some have refused this, and are criticised for it.

“Do they really want to stay on the street?” asks AFI director Carmen Ivănoiu.

Mariana Otest, 32, says: “I’ve looked for flats on the private market. But as soon as I say I’m Roma, they turn me down.” The Roma community are subject to unabashed racism, especially in housing.

In the Rahova-Uranus neighbourhood, behind the People’s Palace (parliament building), between the flower market, a disused brewery and brick warehouses — recently converted into a creative arts space — a number of fine town houses from the early 20th century are to be restored to their original owners.

Cristina Eremia, self-appointed spokesperson for the Roma community, has seen several neighbours evicted, and blames the government: “People wonder why Gypsies have a bad image; but when they are integrated, their homes get taken away. You could say it’s the government that is creating the delinquents.”

 
“Real estate mafia”

Speculators are taking advantage of loopholes in the restitution law. Eremia and her husband say they have already suffered. In 2011 they lost La Bomba, premises they had converted into a sociocultural venue that brought life to the whole neighbourhood.

Now their house, which they share with four other families, is threatened. The tenants have filed a lawsuit against the former owner, which has enabled them to delay eviction until the court delivers its final ruling. Eremia says: “The problem isn’t the former owners, but the real-estate mafia. The town hall issues false ownership certificates, but the judges and prosecutors rule in favour of the corrupt.” Land and houses close to the city centre, like Eremia’s, can be worth millions of dollars and are highly attractive to developers.

Some law firms specialise in acquiring the rights of former owners. As the restitution process is lengthy, some owners would rather accept money from these intermediaries than wait to recover their property and have to deal with the former tenants. Maria Ursu’s apartment block in Vulturilor Street was acquired by a Norwegian businessman before the tenants were evicted.

Former homeowners complain about real-estate mafia too. Marina Ghelber has taught French in Paris since 1976, and has never managed to recover the ownership rights to her mother’s house in Bucharest.

The restitution law contradicts earlier legislation, including Law No. 112 of 1995, which allowed tenants to buy the housing they occupied at low prices. Romanian courts are flooded with lawsuits between applicants for restitution and former tenants who have become owner-occupiers by buying the property.

After some years, Ghelber realised she was fighting the wrong people. The tenants who had supposedly bought her house were in fact proxies for Viorel Hrebenciuc, éminence grise of the Social Democratic Party and close associate of Iliescu, who had taken advantage of a loophole in Law No. 112 to purchase many properties.

Many saw this law as a way for Iliescu to reward his political friends by allowing them to buy the luxurious villas they occupied, at low prices. Hrebenciuc has now been accused of corruption amounting to US$332 million over the restitution of forested land.

Many inquiries by the national anti-corruption directorate concern cases of illegal restitution involving members of the National Authority for Property Restitution (ANRP). Alina Bica, former chief prosecutor at the directorate for the investigation of organised crime, is accused of having over-valued a piece of land and approved US$68 million of compensation for a businessman with close links to the government.

In Bucharest, 16,548 of the 43,155 applications for restitution filed in 2001 are still pending.

In the early 1990s all the former Soviet Bloc countries faced the same issue: Should they restore property nationalised in the post-war period to its original owners? Their responses fell into three categories: restitution, compensation or taking no action.

Like Romania, a number of countries chose to return property where still possible, though with some restrictions. In Bulgaria, the law limited restitution to housing that was still state-owned (homes that had been sold to their occupants before the end of communism were excluded). In Moldova, only victims of political repression could apply for restitution.

Where restitution was not possible, some governments offered compensation — financial (in Bulgaria and Moldova), or in the form of government bonds (in Macedonia and Slovenia) or membership shares in a state-owned enterprise (Albania and Bulgaria).

Poland and Hungary also compensated former owners but set a ceiling, which protected tenants from eviction. Azerbaijan, Bosnia-Herzegovina and Georgia did not legislate on the issue. And Russia and Ukraine ruled out compensation and restitution, except where nationalising the property had infringed legislation then in force.

 
An unabridged version first appeared in Le Monde diplomatique, reprinted here with the permission of Agence Global.

This story has been translated from French.