The Czech government yesterday presented the affordable housing programme and outlined specific parameters for supporting the construction of affordable rental housing in the Czech Republic. In the first phase, the state will offer support of CZK 8 billion in the form of soft loans for the construction of apartments with rents below the market average. The earliest it will be possible to apply for support from the State Fund for Investment Support (SFPI) is in September. This was announced yesterday by Prime Minister Petr Fiala (ODS), Finance Minister Zbyněk Stanjura (ODS) and Regional Development Minister Ivan Bartoš (Piráti). The state has already allocated some 200 plots of land for municipalities to apply for free of charge, provided they build affordable rental flats.
The Ministry of Finance (MoF) has also launched a price map recording the amount of rent in flats by cadastral area.
According to Fiala, the project is based on cooperation between the state, regions, municipalities and private capital. Currently, the state has developed four models of how local governments, the state and private investors could participate in the creation of affordable housing. Municipalities could build with state support or in partnership with a private investor. But at the same time, a private investor could build affordable rental housing on its own if it makes arrangements with the municipality. Another option is for municipalities to buy already built houses for their own stock.
In September, SFPI will offer the Affordable Housing Programme, in which CZK 4.5 billion will be available for soft loans. Next year, the National Development Bank will join it with its CZK 3.5 billion of instruments. In both cases, the majority of the funds will come from the National Recovery Plan (NRP), which will be further supplemented by state budget and private sector resources. Bartoš has previously said that after the involvement of private sources and international institutions, the total investment in housing construction could increase to CZK 20 billion.
Support from the SFPI could be used for new buildings, building modifications or extensions. Part of the money can be used immediately for a maximum of 40 per cent of the total cost if specific requirements are met. The subsequent subsidised loan at the EU base rate for the Czech Republic, reduced by up to three percentage points, can be up to 65 per cent of the project cost. In total, the subsidy and the soft loan could cover up to 90 percent of the investment. The repayment period is up to 30 years and early repayment is free of charge. For example, a local government unit, a state-funded organisation or a church can apply.
The subsidised affordable housing is intended to serve four target groups. The income group includes all but the wealthiest 20 percent of households. Applicants in the target group must not own any property zoned for housing. The next group is young people under the age of 35 who are also not among the richest 10 percent. The third group is public service professions such as health professionals, police officers, social workers and others. They may own a property to live in, but not in the same county in which they apply for bargain housing. The final group is victims of domestic violence. But Stanjura said the state doesn’t want to set any binding rules, so municipalities will be able to determine who the housing is for.
The Czech Chamber of Chartered Engineers and Technicians in Construction, for example, predicts that the construction of affordable municipal housing could help young people to live, increase the birth rate and have a positive impact on the state budget in the long term. According to its calculations, it is possible to build and sell a new 60 square metre apartment in a standard house for CZK 3.6 million, or roughly CZK 60,000 per square metre. The Chamber uses volume price indicators for housing construction, which show that even after including other necessary costs, it is possible to complete and sell apartments this year at final prices ranging from CZK 46,000 to CZK 60,000 per square metre.
According to Deloitte’s latest analysis, the average apartment in the Czech Republic was sold for CZK 95,000 per square metre. According to the company, the average rent in the first quarter was CZK 295 per square metre.
A survey by the Ministry of Regional Development shows that 69 percent of the Czech municipalities surveyed consider their housing stock to be insufficient. Almost three quarters of them would like to expand or reconstruct it. Larger municipalities that already have some housing stock want to build, while smaller municipalities are less interested.
Source: CTK
Photo: Prime Minister Petr Fiala
