By: I.K. / Nova24TV
Slovenian housing policy has for many years been firmly rooted in a fully socialist approach, where solutions are sought solely through state intervention – via state repression and direct public investment. This creates a paradox: these very measures contribute to the core problem of housing policy, the shortage of housing. On one hand, the state stifles a dynamic rental market, while at the same time attempting to participate in the market itself – as arguably the most irrational actor. Naturally, this leads to anomalies that manifest as symptoms of the current situation. In a brief analysis on the social network X, Niko Gamulin pointed out that the state is, in fact, the root problem, one supposedly being addressed by the Ministry for a Solidary Future, headed by Simon Maljevac.
“In the public discourse, there are ideas that the housing crisis can be solved with more regulation. The truth is brutal – the crisis was not created by the market. It was created by the state. This is not an opinion; this is data,” wrote Gamulin. He presented a range of data supporting his thesis.
He first debunked the claim that the rising prices of housing and rents are a global issue. That may be true to an extent, but Slovenia’s problem is far worse than the global average. While real estate prices in the EU rose by 48% between 2015 and 2023, in Slovenia they increased by as much as 86.22% during the same period.
He identified artificial scarcity as the main culprit. The state does not encourage the supply of new housing, it actively suppresses it. How? Through two main mechanisms: paralysing bureaucracy and punitive taxes. Obtaining a building permit in Slovenia is a nightmare, with the process taking years. As a result, the sale of construction land has dropped by 45% since 2021, while land prices have increased by 17%.
The state as a profiteer
“The result of this blockage?” Gamulin asked rhetorically. In 2023, only 797 new apartments were built in Ljubljana, a city with 300,000 residents. This is not a market failure, he emphasised, but a politically manufactured catastrophe, one that the state profits from handsomely. It is not true that “greedy investors” are to blame. It is the state that profits from every new apartment: VAT, municipal fees, land-use planning fees, capital gains tax, etc. The consequence? From a €400,000 apartment, almost €60,000 goes directly into state and municipal coffers (VAT + municipal fees). The state is not the saviour, it is the primary financial beneficiary of the very crisis it helped create.
The state is a poor manager
In Slovenian politics, debates always end with the phrase: “The state should build the housing itself!” But Gamulin argued that history shows the state is a catastrophic builder. A report by the Court of Audit is clear – the state built only 32.5% of the planned non-profit housing, meaning less than a third was delivered.
Examples of good and bad practice
Gamulin pointed out that most Slovenian politicians and experts praise the Helsinki model, which he sees as a dangerous distraction. It is a targeted social programme for the chronically homeless, not a general housing policy for all citizens. Moreover, the model is expensive, reliant on state funding, and even in Finland, it is showing signs of failure.
Yet there is a proven effective solution that no one talks about: the Auckland model. In 2016, New Zealand radically simplified regulations and allowed denser housing construction (known as “upzoning”). The result was a boom in new builds, and deregulation in Auckland not only boosted the market but tripled the construction of government-provided housing. In other words, the free market enabled the state to build more homes for the vulnerable. Liberalisation is the best social policy.
In Ljubljana, by contrast, we see restrictions, bureaucracy, stagnation, and few new permits. Prices are soaring, and social housing is paralysed. In Auckland, deregulation, liberalisation, market growth, and record numbers of building permits have stabilised prices and sparked social housing.
A clear choice
Gamulin believes the choice is obvious: we can choose between ideological stagnation and dynamic growth. With the first, we can continue blaming Airbnb, introducing ineffective regulations, and waiting for a state that has repeatedly proven incapable of solving the problem. The second choice demands that we embrace what works – radical deregulation, lower taxes, and the use of technology to eliminate bureaucracy.
A fresh perspective
Gamulin’s analysis offers a fresh perspective on the housing issue, which in Slovenia – under the current government – has become entirely ideological and dogmatic. The government refuses to discuss alternative solutions, focusing solely on spending taxpayer money to build housing for those who cannot afford it. He also pointed to the hypocrisy of a state that creates scarcity through regulation and then demands to solve the problem with our money, all while satisfying its own political construction patrons.
A similar viewpoint was offered by former politician from the Civic List and founder of Slovenia’s first libertarian blog, Tomaž Štih, known to the public as Libertarec. In December last year, he clearly explained why young people cannot afford housing.