Alternative Housing Program
By Tomaž Štih
Introduction
The affordable alternative housing program would pursue a single (constitutional!) goal:
the accessibility of suitable housing. Its success would be measured by how many years
an average household needs to become the owner of their own (appropriately sized!) home
near or in the place where they work.
For example, if the real credit capacity of a single-person household with an average
income is eighty thousand euros, then the program is considered very successful if
the price of an average small apartment near a larger urban center is eighty thousand
euros – a bit more in Ljubljana, a bit less in Murska Sobota.
The proposed measures would focus mainly on increasing, expanding, and deepening private
supply, on debureaucratization, and on all other factors that influence housing prices
(centralization of the state, mobility obstacles, etc.).
The way to achieve this goal would be to very quickly encourage the market to create
a multitude of new dwellings, varied enough that each first-time seeker can choose
one suited to their budget and lifestyle.
Since the prevailing cultural model in Slovenia is the single-family house, and young
people wish to live in cities, we must address both trends and simplify and lower
the cost of both – simple construction and investment construction upwards.
I. Tax simplification
Today we have a multitude of taxes on real estate, and due to this chaos,
multiple taxation occurs in some cases. The tax system is further complicated
by government announcements of new taxes every few months.
This not only hinders market functioning but also represents an unnecessary burden
on the state administration.
A tax simplification is proposed – the establishment of a single stable and
long-term tax that everyone understands, with a general tax allowance like
in personal income tax – to protect the socially vulnerable. And no other exceptions.
The tax must not significantly increase current taxation and must incorporate
all other sectoral taxes and fees (e.g., property tax, building land use fee,
cadastral income, utility contribution, tax on rental income, real estate transfer tax, etc.).
It must be an original revenue of the local community, with no exceptions,
assessed from the generalized market value of land. The municipality may
independently set the rate between zero and a legally defined maximum.
This enshrines tax competition.
To prevent abuse, if a municipality sets the tax rate below ¾ of the national average,
it is not entitled to funds from the equalization mechanism.
II. Incentives for the rental market
We want to reform legislation so that housing is accessible and rental is
no longer mainly an emergency solution for those who have no hope of
ever owning – but instead a mechanism that enriches lifestyles and encourages mobility.
People should freely choose their form of living, and the state’s role must
be to offer as much choice as possible. To make renting attractive,
the state must strengthen both the position of the tenant and the landlord.
-
Abolition of tax on rental income
Currently, income from property rental is taxed at 25%, which discourages
landlords. If the owner already pays the unified property tax, then the
rental tax is double taxation. Tax relief would encourage more rental supply.
-
Eviction guarantee for non-paying tenants
Lengthy court procedures discourage property owners. Introducing a guaranteed
eviction deadline for non-payers, and possibly covering costs if the state
misses the deadline, would improve legal security for landlords.
-
Legal regulation of deposits
Current law does not define clear rules for security deposits.
Legal provisions would protect both tenants and landlords and reduce disputes.
-
Standardized lease agreements
A simple template contract would reduce legal uncertainty and simplify
procedures, enabling quick and digital lease agreements.
-
Automatic registration of residence for tenants
Upon signing a lease, the tenant’s residence would be registered automatically,
unless they opt out. This would simplify bureaucracy.
-
Utilities in the tenant's name
Contracts for basic services (electricity, water, gas, internet) could be
signed directly by the tenant, ensuring clear responsibility for payments
and protecting the owner.
-
Voluntary tenant credit scoring
Optional ratings would help landlords decide and allow tenants to prove
payment reliability without a mandatory central registry.
III. Legal simplifications
To re-enable widespread private construction, as known in the past,
we need a comprehensive simplification of spatial and building legislation.
This task must not be left only to professional associations, local governments,
or licensed planners, as they often have a vested interest in maintaining
a complex, exclusive system they know how to navigate – and profit from.
Instead, the state must establish a special deregulation group made up mostly
of consumers – those who do not yet have a home and are directly affected.
These are future builders, not those already housed and benefiting from high prices.
The group’s mission: to write a separate, short, and understandable legal
framework for single-family houses and small residential buildings, separate
from existing spatial legislation, with the highest possible degree of simplicity
and legal certainty.
The group could consider the following simplifications (unordered):
- Express permits for simple and small buildings (tiny houses).
- Expand the list of structures not requiring building permits (e.g., up to 100 m²).
- Remove construction logbooks and mandatory signage for private builds.
- Remove the need for occupancy permits for owner-built homes.
- Eliminate approvals for trivial changes that don’t impact neighbors or the environment.
- Allow pre-approved plans (model projects) without lengthy review.
- Automatic rezoning based on objective criteria (e.g., proximity to infrastructure).
- Simple liability statement and basic technical report instead of elaborate documentation.
- Modular municipal spatial plans (OPNs): allow zoning of micro-locations without changing the entire plan.
- Right to request land-use change (e.g., farmland within settlements).
- Detailed spatial plans (OPPNs) should be the exception, not the rule.
- Remove arbitrary housing quotas in OPNs.
- Specialized state body empowered to expand settlements if municipalities obstruct growth.
- Allow construction without full utility readiness if alternatives are provided (e.g., septic tanks, solar, rainwater capture).
- Voluntary non-connection fee – if someone chooses self-sufficiency.
- Direct utility contracts without municipal or monopoly interference.
- Recognize mobile and temporary living (van life, container homes) with clear legal status.
- Allow alternative homes on private land without state interference (with liability declaration).
The core of this legal simplification is not just reducing bureaucracy,
but restoring dignified and affordable living conditions for those excluded today.
Slovenia achieved a housing miracle when people were allowed to build their own homes.
Today, it has become nearly impossible. It is time to reopen that path.
IV. Lowering land prices
To reduce land prices for construction, competition is a much better tool
than taxation. If buildable land becomes cheaper due to abundant supply,
this has the same effect on investors as a tax — but does not harm those
using the land for housing.
In Slovenia, land is not expensive because there is little of it.
In reality, more than 95% of the country is undeveloped.
Our territory covers 20,273 km² and is home to just under 900,000 households.
Of these, about 25% do not own their homes.
If each of them needed 350 m² of land, that’s only 0.4% of the national territory.
Anecdotally, even if we allocated forest land for this purpose,
forest coverage would drop from 58% to 57.5%.
Buildable land is expensive not because of scarcity,
but because of a lack of permits. This is called artificial scarcity.
It’s like a group of tourists in the middle of a lake allowed to drink
through just one straw. Their problem is not water shortage…
A simple formula to lower the price of buildable land:
allow construction on more of it.
Helicopter land
The state owns almost a quarter of Slovenia’s land.
We propose that 2% of state-owned land near towns with good infrastructure
be reclassified as standard-size (e.g., 350 m²) buildable plots and allocated
as so-called helicopter land for single-family housing.
Helicopter land means this land is privatized for a symbolic fee or free of charge.
To ensure sustainability, the land is not inheritable and returns to the state
upon the owner’s death, replenishing the pool of available helicopter plots.
In these zones, more relaxed construction rules may apply,
such as pre-approval of architectural designs enabling faster permits,
or experimenting with techniques and materials that would otherwise take decades to approve.
First-time seekers can choose a region, and specific plots are assigned by lottery,
possibly with social benefit criteria — e.g., priority for those volunteering for military service.
Minimum unbuilt land quota
To ensure an adequate supply of buildable land and encourage the YIMBY effect,
each municipality should be required to maintain at least 25% of its built-up area
as unbuilt buildable land. If this quota drops below the threshold,
the municipality must release more land.
Exceptions can apply to areas heavily dependent on tourism.
V. Jazbinšek 2.0
Apartments with non-profit rents, still owned by the state or municipalities,
represent a frozen housing stock that rarely circulates.
Tenants rarely move out, and rental rights are often informally passed within families.
This is understandable — why would someone leave a quality apartment in a good location
at one-third the market rent?
This model is long-term inefficient and opaque. The state pays for maintenance,
but never regains control or redistributes the housing effectively.
We propose offering these homes for sale to current tenants:
- At a fair discount, factoring in years lived, social status, and real value.
- With safeguards against immediate resale or speculation.
This would:
- Relieve the public administration of inefficient housing management.
- Ensure tenants’ long-term social security and affordability in retirement.
- Save the state long-term maintenance costs.
This is not a new idea. The original Jazbinšek law in the 1990s was hugely successful —
around 160,000 people gained homes, ensuring housing security and stability.
The problem was not privatization itself, but that apartments were sold too cheaply.
Two models are possible:
-
Classic improved privatization:
the tenant gradually pays off the apartment through rent,
becoming the owner after a set period. This system is fair,
prevents sudden financial burdens, and encourages responsibility.
-
Singapore’s rent-to-own model:
the tenant gains lifetime usage rights, but ownership remains with the state.
After the tenant’s death, the apartment returns to the housing pool.
Note: Slovenia’s housing success was also built on inflation-indexed loans —
something that cannot be repeated today.
VI. Investments in better road networks
Infrastructure investments are long-term. Railways, highways, and tunnels
are built not for today, but for the next 10, 20, or even 50 years.
If we believe that in a few decades autonomous electric vehicles will be
widespread, the logic of mobility will fundamentally change.
Such vehicles will be:
- Safer — eliminating human error and fatigue
- Accessible — usable by children, elderly, disabled
- Comfortable — enabling sleep, reading, or work during transit
- Efficient — coordinated by traffic algorithms
- Green — running on clean renewable electricity
In such a world, traditional public transport will become less essential.
Instead, we will send cars to pick up others, share rides, or personalize our mobility.
Nevertheless, there is a strong current trend of investing heavily in traditional
public transport — often framed as climate policy. But this may not be the most
rational or long-term choice.
For example, railways are:
- Extremely expensive and slow to build and maintain
- Inflexible — requiring high traffic density along fixed corridors
- Centralized — reinforcing outdated development models
- Slow to adapt — infrastructure changes are costly and lengthy
Much of this investment happens because rail is currently seen as "green."
But in a future dominated by electric, autonomous personal transport,
that advantage disappears. The issues rail solves today — emissions and congestion —
will be addressed by technology.
It’s wiser to invest in high-quality road and communication networks,
creating infrastructure that is flexible, decentralized, future-proof,
and technology-neutral.
VII. Transformation or abolition of housing funds
The state has established housing funds in Slovenia to increase the stock of
public rental housing. In practice, however, this model is proving neither
effective nor sensible.
Housing funds typically build no more than 600 apartments a year — a drop in
the ocean compared to actual needs. Around 17,000 children are born in Slovenia
each year, meaning even just covering new generations requires several times
more housing. When accounting for childless couples, immigrants, singles, and
the aging population, it's clear that these funds fail to meet even 5% of real demand.
In practice, it’s a housing lottery — only a lucky few benefit.
Moreover, housing funds often build in prime locations — city centers and
high-value zones. This is problematic because:
- It adds pressure to already overheated property markets.
- It pushes out the middle class, who can no longer afford to buy there.
- The state competes with the market for contractors, raising costs for all.
Housing funds also take loans backed by government guarantees, meaning taxpayers
bear the risk of failed projects. Meanwhile, many private investors — who could
build faster and cheaper — have no access to such guarantees.
Despite all this, millions of euros flow into housing funds annually — for
construction, interest, overhead, salaries, and project management — with
negligible results. Public money is spread thin while almost no housing gets built.
Housing funds are also large bureaucracies with management, legal teams,
commercial departments, investors, supervisors, and consultants. But the state
is not a real estate agency. These tasks could be more efficiently handled
by private or municipal providers already operating successfully in the market.
We propose:
- Gradual transformation or abolition of housing funds.
- Complete existing projects, but start no new ones.
- Reassign staff to the private sector or to a new, specialized state body focused solely on access to buildable land — today’s biggest obstacle to construction.
The state should focus where it’s truly needed: legislation, regulation, fair
taxation, and opening land for development. Housing funds should be a thing of
the past, not a permanent institutional market disruption.
VIII. Decentralization of the public sector
Most of Slovenia’s public sector is concentrated in a few urban centers,
primarily Ljubljana. This includes ministries, government offices, agencies,
universities, research institutes, hospitals, cultural institutions,
and broadcasters.
This causes major issues:
- Overloaded roads, congestion, and traffic jams.
- Lack of parking and constant space conflicts.
- Higher construction costs in expensive central areas.
- Housing pressure: thousands of public employees want to live near work, driving up prices and pushing out families.
Meanwhile, other parts of Slovenia — rural areas, small towns, and regional
outskirts — remain depopulated, opportunity-starved, and underutilized.
We’ve built a system where people are forced to move where the state is,
instead of the state going where the people are.
Public employees are generally well-educated and well-paid. Their presence in
a town boosts local demand — for restaurants, hairdressers, preschools,
housing, gyms, mechanics. In short, they support vibrant local life.
We propose a gradual relocation of public institutions across Slovenia.
This doesn’t mean putting every agency in a village — but relocating offices,
universities, and agencies to areas with good connections and available land,
where people would gladly stay — if given employment.
To reduce housing pressures, we must reduce demand — and one of the biggest
sources of that pressure is the state itself. The state should lead by example
and move first.
Slovenia already uses tools to promote balanced settlement — through grants,
EU funds, building restrictions, environmental limits, and spatial plans.
But while citizens are expected to live “dispersedly,” the state behaves as
though it can only exist in the capital.
A more fair, efficient, and meaningful approach would be for the state to
respect the principle of balanced regional development — relieving pressure
on major cities, reducing housing strain, and revitalizing lagging regions.
IX. Legalization of existing informal buildings
Slovenia has a long tradition of legalizing past unpermitted construction —
either through presuming old permits or via dedicated legalization processes.
Meanwhile, citizens who today try to build legally still face long waits,
consents, bureaucracy, and required documentation just to build a simple house.
This system is unfair — it creates double standards:
- Some obtain occupancy permits effortlessly,
- while others can’t get one despite full compliance and effort.
Even the Constitutional Court now questions whether such legalizations violate
the constitutional principle of equal treatment under the law.
We propose a more consistent and fair path:
- First, simplify the building code for everyone.
- Then legalize all existing structures that would comply under the new rules.
This way, all are treated equally — no retroactive privilege for past violations,
and no punishment for future compliance.
What about those who built under stricter rules?
They may feel uneasy, but this is not injustice — it’s progress.
Just as no one receives a refund when taxes go down,
this change means society moves forward — toward more accessible housing.
The legalization we propose is not about leniency,
but normalization. We’re not correcting individual wrongdoing —
we’re correcting unreasonable conditions that pushed people to violate rules in the first place.
X. Private microfunds and self-build cooperatives
Over recent decades, much has been said about Slovenia’s “housing miracle” —
the fact that a large share of Slovenians own their homes.
But this wasn’t due to state construction.
The Jazbinšek law privatized only around 160,000 dwellings — less than a quarter
of all housing. Many of these weren’t publicly built anyway, but nationalized
or confiscated homes from previous regimes.
The real foundation of Slovenia’s housing success was:
- Mass self-building in the 1960s–1980s,
- Family solidarity,
- Private initiative in creating homes.
That spirit of self-building — people building their own homes with effort and savings —
is fading. Why?
- Crippling overregulation,
- Construction burdened by excessive rules and approvals,
- Mobility restrictions that prevent competitive suburbanization,
- No buildable land where people can afford to live,
- No room for community-based solutions.
These imbalances are increasingly recognized. The Chamber of Commerce recently noted:
- Procedures for state investors are faster than for private builders, often due to political pressure,
- State projects are exempt from utility charges, while private builders pay full price for the same infrastructure.
This creates a system where the state competes against its own citizens — unfairly,
using far more resources and tools.
Slovenia must return space to private initiative — not through subsidies,
but by removing obstacles.
When every hardworking person can build a home — or join others in creating
a neighborhood — we’ll again witness a housing miracle. Not through law,
but through freedom.
The core proposal is:
- Empowering local communities to organize housing themselves,
- Simplifying rules that currently hinder initiative,
- Removing the state as a market-distorting investor.
Private microfunds would be small, local initiatives by individuals or groups collecting resources to build homes in their area. These could be cooperatives, parent groups, village communities, unions, or companies for employees. They would build where they want to live — not where the state assigns quotas. Housing would be owned by the fund’s members, not rented from the state.
Self-build cooperatives would be neighborhoods built together by individuals. Each person builds their unit (e.g., house), while the group organizes roads, fences, water, sewage, and electricity. Costs drop significantly as there's no need for commercial investors. Everyone invests what they can afford. The cooperative may jointly source materials, share tools, exchange skills — reducing reliance on the market.
The state does not finance or build these private projects. But it ensures:
- Barriers are removed,
- Land division is simplified,
- Shared ownership and building permits are easy to obtain,
- Construction is allowed without full utility readiness if members commit to self-sufficiency (e.g., water tanks, solar panels, composting toilets),
- A legal framework supports safe co-investment and shared use.
Private microfunds and cooperatives are not experiments — they are a revival
of what once worked in Slovenia. A society where the state builds a few hundred
units a year will never solve housing for 25% of households — over a quarter
million people.
A society that again trusts its people to build their own homes — can.
