The transition from a centrally planned to a market-oriented economy in post-communist states has taken much longer than most observers anticipated. However, as a consequence of years of privatization and decentralization, the so-called “East European Housing Model” has now disappeared. Even so, efficient market relations (especially in the housing finance system) have developed very slowly, and this has made any attempt to introduce major social housing programs unfeasible: in the absence of readily available mortgage finance, the state has continued to help middle-class families address their housing problems. If housing is not affordable to the majority of households, the influence of fiscally constrained social housing programs is correspondingly limited.
Several positive changes took place in the 1990s with respect to the legal and institutional framework of the housing finance system in the region. However, the creation of efficient market-oriented housing finance systems in the countries of Eastern Europe and the Commonwealth of Independent States remains a work in progress.