In practice the housing policy of Polish communist regimes was more pragmatic than the Soviet model. In some regions, high housing demand inspired locally controlled cooperatives that pooled state and private resources. State housing construction actually was halted in the 1960s to create demand for cooperative housing, for which rents were much higher. Thereafter, however, the cooperatives gradually became centralized national monopolies, and construction in the 1970s was dominated again by large state enterprises. The monopoly status of the builders and the cooperatives insulated those groups from market competition and enabled them to pass along the costs of inefficient operations to the tenant or to the state.

Under these conditions, housing construction was extremely wasteful and inefficient. The economic crisis of 1980 combined with existing weaknesses in industrial policy to begin a housing shortage that lasted through most of the decade. Between 1978 and 1988, annual housing completions dropped by nearly 45 percent, and investment in housing dropped by nearly 20 percent. At the same time, the Polish birth rate added pressure to the housing situation. By the late 1980s, the average waiting time to buy a house was projected at between fifteen and twenty years if construction continued at the same rate. The housing shortage was a primary cause of social unrest however, the structural flaws of Polish building continued unchanged. Construction remained of low quality, builders maintained the monopoly control granted by centralized planning, labor productivity dropped, and distribution and transport remained centralized and inefficient.

Housing also remained subordinate to industrial goals. In the 1980s, this meant that new workplaces were the center of housing construction activity, which produced dormitories for workers. By 1988 Poland ranked last in Europe in housing with only 284 dwellings per 1,000 persons 30 percent of Polish families did not have their own housing accommodations and the average number of persons per dwelling was 20 percent above the European average. In addition, the average usable area per dwelling in Poland was 10 to 15 percent below the average for other socialist countries and 30 percent below the average for Western Europe (see table 4, Appendix).

Private housing revived somewhat in the 1980s, although independent cooperatives still faced critical materials shortages in the construction stage. An easing of tax regulations and other economic changes raised the profitability of private property in that period. In 1988 the percentage of housing construction projects in which individuals invested had risen to nearly 34 percent from its 1978 level of 26 percent. Although state investment also rose slightly in that period, both increases were at the expense of cooperative investment, which dropped by 10 percent. Nevertheless, in towns privately owned properties remained insignificant until 1989, mainly because high inflation in the 1980s devalued the long-term, low-interest loans offered on 30e n state property. In 1989 the new government's anti-inflation measures realigned such loans with present currency values and raised interest rates, stimulating conversion of two-thirds of cooperative flats into private property by early 1990. At the same time, the monopolistic Central Cooperatives Association was split into numerous genuine cooperatives, the state housing administration was abolished, and new incentives were introduced to stimulate private building and rentals.

Data as of October 1992