Interview with IULIA MERSOIU
Iulia Mersoiu is my mother, she is 62 and more than 40 of them were spent working as a surgery and internal medicine nurse at the Prahova County Hospital in Ploiesti. She was assigned to work in Ploiesti in 1974 and rented a flat until she contracted a housing mortgage in 1978.
First of all, please tell me when and how did you come to Ploiesti?
I did my nursing studies in Ploiesti between 1972 and 1974, coming from Ramnicu Sarat, Buzau County. I was assigned by the state to work in the city after nursing school, but Ploiesti had been declared a closed city. However, that year the government issued an ordinance which said that those who have been assigned to work in a certain city could become citizens of that city of they contracted housing thorough OCLPP…
The Department for the Construction of Private Homes, set up in 1966…
Yes, that’s right. So you contracted the place according to some plans, and then you waited. They weren’t ready immediately, but depending on what you chose, what you really wanted. You could choose a one-bedroom flat, a two-bedroom, a three-bedroom or more. Depending on the size and the area – because the suburbs were being extended at the time, towards the north and south of the city. So I applied for an apartment…
This was at the beginning of nursing school?
No, this was in 1976. Before that I paid rent. Yes, I applied for it after the earthquake of 1977. In 77 or 78.
What were the conditions when you were paying rent?
I was living with someone who had a two-bedroom flat, close to the county hospital, in the northern part of the city. I had a furnished room. My salary was around 1000 lei when I started working as a nurse, but then it was raised to 1100-1200. And the rent was 150.
Were rents regulated by the state?
No, they weren’t. The rent was peanuts in state-owned housing. You needed to be well-connected to live in state-owned housing. And I paid rent for about 3 years…no, a bit more. Yes, a bit more, because the block of flats I had applied for, in the northern part, wasn’t ready on time. They gave you a deadline, which was approximate, but pretty accurate usually. But in this case it wasn’t ready on time. I couldn’t wait the 6 months they told me I should wait. I was bringing my mother from Ramnicu Sarat, we had no place to stay. So I went to the head-engineer or architect or whatever he was and he showed me other construction plans and their deadlines. And this one in the southern part was more convenient, so at the beginning of 1979, they gave me the key and we moved in. Afterwards, there were several adjustments made. There was the first reception, and then a second one shortly after that. There were minor flaws, as you have with living together in a block of flats. It was their job to fix all the issues.
After you were assigned to Ploiesti, did you receive any institutional support in finding a place to stay?
Absolutely not. That was up to you. The city was closed. Without this housing loan option, it was very hard. I was privileged, I took out a short-term loan, I was single. The reference for the loan was my salary and my salary alone. For apartments, you had to pay an initial down payment, one-third of the value of the apartment. The initial evaluation was 134.000 lei. The one I contracted was about 10.000 lei cheaper, because it only had a balcony across the living room and the kitchen, not all the way across. The amount of space was the same.
I didn’t have enough for the down payment, so I took out a small interest loan at CEC, the state bank. The interest was only 1%, I think. I took out 20.000 lei, short-term. Short-term meant 5 years. And I was paying one-third of my salary. They weren’t allowed to retain more, because back then I was supposed to make a living on the rest of it. In the meantime, my mother sold the house in Ramnic, I could pay off the loan in advance, because it was allowed back then. Nowadays you cannot do this, the bank doesn’t allow it. And I paid off the loan in 2 years, I think.
That was in 1980-1981?
No, no, that was before I moved in. I made the down payment, 62.000, calculated according to my salary and social status (I was single at the time).
What did that amount of money mean? Considering my salary, 1200 lei, think about it. It was a lot. But I paid it, I had to. In early 1979 I said I would move in and they started retaining the long-term installments, meaning the rest of the value of the flat, 127.000 plus interest. I calculated about 170.000. So roughly 50.000 was the interest. In 20 years time. And I was paying a third of my salary, the installment was 469 every month. About 1300 was my entire paycheck. And I paid until 1999, when I went to the notary public, lifted the mortgage and became an owner.
How did the installments fluctuate after 1989-90?
It didn’t. It remained the same, regardless of how much the value of money decreased and how much the salaries were increasing. The mortgage installments quickly reached the level of a loaf of bread, I was paying them without any effort. And that’s how I bought my own apartment. But not just me, many people became owners this way. I became a citizen of Ploiesti and took my mother to live with me officially, as was the formal procedure back then.
What would be the differences between a mortgage loan back then and a mortgage loan nowadays?
I can only tell you in theory, because I’ve never taken out a loan after 1990 and I never will. This is something I taught you, as well. It is an enormous burden. It’s true that the paychecks are higher, the possibilities of paying back the loan are different, but God forbid you take out a loan in Swiss francs. Mortgage loans are long-term loans, 20, mostly 30 years. Nowadays jobs are no longer safe, you can’t really juggle anymore. You have to think of the worst. It’s very complicated, only if you have some money put aside so you can make a larger down payment…that way the loan is smaller and the installments are bearable. Because nothing is certain anymore. I don’t think there is any comparison with the loans from before 1990. There were all kinds of loans back then, even for houses. That’s how my cousin got her house. She had the land and took out a loan to build the house. She can tell you, she was the head of the loan office at CEC. There were no other banks, only the National Bank and CEC. And they gave out these mortgage loans. I don’t know of any other kind of loans.
For consumer goods, maybe?
No, there was no such thing.
In august 1991, the government of Petre Roman issued ordinance 562, which facilitated the selling of homes built by the state. For instance, the minimum down payment had to be only 10% of the entire value and the installment period was limited to 25 years. 80% of people who were still paying rent to the state became owners in a short time span.
Yes, they prioritized buying the homes for those still paying rent to the state. That’s how my father-in-law bought his apartment, it was very convenient. He negotiated larger monthly installments and bought it within 2 years. Only with his pension. A lot of people bought their homes then. They’d already been living in them, but they were owned by the state. And the state wanted to get rid of them. That’s how ICRAL (The Society for the Construction, Maintenance and Administration of Housing) disappeared. If you had any issues, you called ICRAL to fix it. But that’s how it disappeared.
Interview conducted by MARIUS BOGDAN TUDOR