In everyday conversations, at family gatherings, or in spontaneous discussions in cafes, few things evoke as much nostalgia as the sentence: “In Tito’s time, the state providedapartments free of charge.”
This deeply rooted narrative has become an axiom of collective memory about the Socialist Federal Republic of Yugoslavia (SFRJ). It is a memory of a system that provided many with a roof over their heads, but when examined through the lens of historical and economic facts, it reveals a much more complex, harsher, and layered story.
The socialist state was not an abstract benefactor with unlimited resources, and the apartments were not allocated “out of the blue.” The entire process of planning, constructing, and allocating housing stock relied on the blood, sweat, tears, and obligatory sacrifice of the working class. Through a complex web of Basic Organizations of Associated Labor (OOUR) and Self-Managing Communities of Interest (SIZ), every employed citizen, by allocating a determined percentage of their gross income, collectively and in line with the system’s principles, financed what we now call “social housing.” In reality, this was a massive, forced collective savings.
This system in Bosnia and Herzegovina initiated a civilizational shift. In 1945, it was mostly an agrarian and poor republic, but it quickly transformed into a center of heavy and specialized industry. Giants such as Sarajevo Energoinvest, Zenica Željezara (Steelworks), and Tuzla Kreka literally built entire satellite settlements from undeveloped land, reshaping the landscape of basins and forming a new proletarian class.
Although the system was based on proclaimed class solidarity, its implementation often generated deep inequality. While employees set aside equal amounts from their salaries, the allocation of apartments was determined by strict scoring lists that clearly favored “shortage occupations,” such as engineers, doctors, and managers.
Thus, a large number of ordinary workers who for years accumulated so-called “years spent as tenants” by financing housing allocated to more privileged groups, while simultaneously dealing with bureaucratic inefficiency, had to turn to unplanned “illegal construction” on the hillsides of Bosnian and Herzegovinian cities.
Although envisioned as a just and equal system, some still found ways to manipulate it, leading to the campaign “You own a house, give back an apartment,” which was mocked by surrealists in a famous sketch.
Today, thirty years after the fall of that system and amid massive post-transition privatization, Bosnia and Herzegovina has, paradoxically, one of the highest percentages of private residential housing in Europe.
To fully demystify this phenomenon and separate nostalgia from historical facts, we spoke with Dr. Aida Ličin Ramić, a historian with a PhD on this topic and author of the book “Sarajevo u ritmu modernizacije: urbana transformacija i njene posljedice1970-ih i 1980-ih” (Sarajevo in the Rhythm of Modernization: Urban Transformation and Its Consequences in the 1970s and 1980s).
A collective memory of our society is deeply rooted with a myth on how the “country allocated apartments for free.” How would you, from the perspective of the economic history, explained actual financing mechanisms of apartment construction through OOUR and SIZ?
The myth on “free apartments” originates from a simplified understanding of socialist system. Apartments were not free, but collectively financed through specific institutional mechanisms.
The housing construction financing system in socialist Yugoslavia changed through the series of reforms and adaptations within the self-management system. Mostly the funds were collected through allocation of personal income in the Basic Organization of Associated Labor (OOUR). In such way the housing construction was directly tied to work and economic success of enterprise, but also to the collective contributions of the employed.
Since the 1970s this system has been further reformed through forming of Self-Managing Communities of Interest (SIZ), which are taking a key role in organization, direction and allocation of funds for housing construction. Therefore, the apartments were not “free”, but their construction and allocation to workers was a result of the complex system of collective financing and administrative allocating, which reflected ideological principles of socialistic society, but also its internal differences. It is important to highlight that system was not completely egalitarian. On the contrary, the investigation shows that there were significant differences in access to housing, which indicates on existence of social stratification and segregation within the socialist society.
The Yugoslavian system was based on the concept of collective solidarity, where all employed individuals contributed a portion of their income. In practice, how was the challenge addressed given that the housing fund continuously increased, while the allocation of apartments was gradual and could not cover all workers?
This is one of the key questions that clearly reveals the boundaries and weaknesses of the system. Although all employees contributed to the housing funds, the construction of apartments could not keep up with the continuously growing needs and expectations for public housing.
In practice, this problem was addressed by establishing ranking lists and a point-based system within work organizations. Apartment allocation was organized according to predefined criteria, primarily including length of service, family status, existing housing conditions, and, in some cases, the needs of the work organization – especially when it came to scarce professionals, who were allocated so-called staff apartments.
However, the source analysis clearly shows that the system functioned under constant tension. For many who had waited years for a housing solution, ranking lists were a source of frustration and dissatisfaction. Despite long waits, many irregularities were recorded in the process, as shown by the number of complaints and court cases, which were not uncommon.
The tenancy right was a unique legal institution of that time. What were its main characteristics? How did the apartment exchange system function in practice, and how long did it take to develop its own, somewhat informal market? What can be said about the phenomenon of “years spent as tenants”?
The tenancy right was one of the key and specific legal institutions of the Yugoslav socialist system. It did not include ownership of the apartment, but rather the right to its permanent use. In this way, the apartment was seen as a social good, not as a commodity on the market.
The principle that the apartment is a social good was confirmed not only by a series of legal acts but also by the Constitution of the Socialist Republic of Yugoslavia in 1974. In Chapter III, “Freedoms, Rights, and Duties of Man and Citizen,” Article 164 states: “A citizen is guaranteed the acquisition of a tenancy right to a socially owned apartment, which ensures that, under conditions determined by law, they may permanently use the socially owned apartment to satisfy personal and family housing needs. The right of citizens to use an apartment subject to ownership rights shall be regulated by law.”
In practice, there was a legally recognized possibility of apartment exchange according to the needs of users, for example, between smaller and larger apartments depending on household size. Although this practice existed, the sources donot confirm that it was widespread or that it developed clear forms of an informal market. Rather, it created occasional solutions, and their implementation depended on various administrative and practical circumstances.
Amid the housing shortage and ongoing housing crisis, many citizens addressed the problem by renting. For this reason, “tenancy length,” used in point-based and ranked lists for allocating social apartments, was highly valued as an indicator of long-term unresolved housing needs.
As a compromise for the lack of apartments, the system offered attractive housing loans, which led to widespread and unplanned individual construction on the outskirts of the city. Did the country turn a blind eye to this “illegal construction”?
Housing loans did exist in socialist Yugoslavia, but they were not dominant; rather, they served as a supplementary mechanism for addressing housing needs. Bank loan funds were mostly directed toward economic enterprises, while citizens primarily accessed loans for consumer goods such as household appliances, furniture, and cars.
At the same time, since the 1970s, the authorities tried to encourage greater use of personal citizen funds to address housing issues, especially through various forms of individual construction and organizations such as housing cooperatives. In this context, the key role belonged to the credit funds that enterprises granted to their employees, aimed at resolving housing issues, mostly for the construction of family houses. This was also a response to the inability to address all workers’ housing needs through the allocation of public housing. Such credits, combined with citizens’ personal income, although intended to meet housing needs, in practice contributed to the development of illegal construction.
Regarding this type of construction, often referred to as “illegal construction” in sources, it must be emphasized that it was a consequence of the inefficiency of housing policy, urban planning, and the inability of the social sector to respond to growing housing issues. In conditions of chronic apartment shortages, citizens were forced to resolve housing issues with their own funds, mostly through individual construction.
Although the authorities tried to direct and regulate these processes, they were not always successful. The state‘s attitude toward illegal construction was ambiguous; despite attempts at control and legalization, this phenomenon was tolerated during certain periods, indicating an uneven and often insufficiently effective response to a process deeply rooted in the structure of urban development under socialism.
At the same time, illegal construction was not only a spatial, economic, and social issue, but also a political one. Its main participants were mostly workers, the social group through which the government built and maintained its legitimacy, which further explains the ambivalent attitude toward this phenomenon.
Industrialization has dramatically changed the demographic profile and urban landscape of Bosnia and Herzegovina (Sarajevo, Zenica, and Tuzla). How did the housing policy in mining hubs, where apartments were compensation for miners’ poor health, differ from the policy in administrative and industrial centers?
It is true that industrialization and the process of deagrarianization drastically changed the demographic profile throughout Yugoslavia, especially in Bosnia and Herzegovina, which entered the new society with a significantly high proportion of its population in agriculture (81% in 1945). According to assessments, by 1953, around 370,000 people had left agriculture, and a significant portion of the population was moving toward larger cities and industrial centers in search of employment.
During the post-war years, due to a shortage of housing, many workers lived in temporary structures and barracks built near industrial facilities. Only with the strengthening of enterprises and the development of social housing construction some of these workers gradually resolved their housing situation through the allocation of public housing.
Meanwhile, it is difficult to describe the apartments as direct compensation for poor health, even in the mining centers. The system for allocating apartments was neither solely nor primarily based on the difficulty of work or health risks; rather, it varied from enterprise to enterprise and was shaped by broader social and organizational criteria.
In practice, it often became evident that workers performing the most difficult manual labor, but with the lowest qualifications, were underrepresented among public housing recipients. Early sociological research in Yugoslavia and Bosnia and Herzegovina confirmed such patterns, indicating pronounced social segregation within the apartment allocation system. Therefore, it can be said that housing policy, in some respects, contributed to the reproduction of social inequality.
By the end of the 1980s, amid hyperinflation and economic crisis, SIZ mechanisms were collapsing and construction cranes in Bosnia and Herzegovina stood still. How did this macroeconomic collapse affect the ordinary worker who had been on a “waiting list” for years?
By the end of the 1980s, during the deep economic crisis and inflation, the mechanisms for financing housing construction also weakened, which directly led to a slowdown in construction and more openly emphasized the need for greater involvement of citizens’ personal funds in resolving the housing issue.
For the average worker, who had participated for years in financing housing funds and waited for a resolution to the housing issue, this meant a prolonged period of uncertainty and further delays in an already lengthy and complicated process of obtaining an apartment. At the same time, amid inflation, the value of the funds being contributed declined, which further undermined trust in the system.
As a result of Yugoslavian housing policy and post-transition privatization, Bosnia and Herzegovina today has a very high percentage of private real estate ownership. Do you agree with the thesis that real estate now serves as the strongest social safety net preventing widespread homelessness in our harsh transitional capitalism?
The high percentage of private real estate ownership in Bosnia and Herzegovina today (according to a 2015 analysis, around 95%) is largely a result of socialist housing policy and the system of social housing, followed by the subsequent purchase of social apartments during the transition period. Comparative analyses also show that former socialist bloc countries have a significantly higher degree of real estate ownership, such as Romania (94%), Slovakia (93%), Hungary (92%), and Croatia (91%), while in some Western European countries this percentage barely reaches 50%.
Regarding the thesis that such an ownership structure today acts as a safety net preventing homelessness, it can be said this claimhas some basis, because a high degree of ownership can undoubtedly contribute to housing security for a large portion of the population. Still, it is important to be cautious with general conclusions like this.
Such questions require a deeper analysis of economic and social trends, while research that would systematically examine the consequences of the transition on housing policy and housing in Bosnia and Herzegovina, as well as in a broader regional context, particularly historiographical research, remains underdeveloped, Klix.ba writes.
