Improving housing affordability for young families impossible without raising salaries

Offering one-time subsidies valued at 30 to 50 million lei to 4,700 young families working in government-funded sectors, including the social and mandatory health insurance systems, to help them buy or build a home seems to be a good decision by the Government, but it raises a few questions. Analyst Alexandru Gamanji of the Expert-Grup Center says in a study quoted by Info-Prim Neo that the State Budget doesn't afford funds to cover these expenses. The reference to the sum of 100 million lei earmarked for the purposes of the ongoing Youth Year is irrelevant as no funds are expressly assigned for providing young families with housing In addition, the monthly benefit of 300 lei planned to be offered to the young families in urban areas to pay rent is but nominal and “smells like vote-buying”, given that the rent for a one-roomed apartment is 150-200 euros, plus the public utilities. In the countryside the sum of 30,000-50,000 lei could somewhat be of help to the young families. But as a rule they do not stay too long to work in rural schools, hospitals and libraries. The main reasons are the low salaries paid to the so-called intellectual workers, especially those working in the countryside, and also the fact that infrastructure in the rural areas is either too old or inexistent. Gagamanji believes that offering housing subsidies should be just one of the many measures for providing young families with housing. An important step would be to raise their salaries. This could also increase the effectiveness of the mortgage lending, which could become the primordial solution in solving housing problems. Today the mortgage lending in Moldova is in its infancy, and to get a mortgage loan one should pay 15 to 20 percent in advance. According to Expert-Grup's calculation, to prove his solvency the recipient should have a monthly income of at least 6,000 lei, far less than what a typical rural family earns.