It will be possible to use money from the Affordable Housing subsidy-loan program for the construction of an apartment building, building modifications or the purchase of a new apartment, which will contribute to solving the current housing crisis.
From October, the State Investment Support Fund (SFPI) will offer preferential loans for municipalities, regions, their organizations, and other legal entities for 7 billion crowns until mid-2026. Next year, the National Development Bank will join it with its instruments for another 3.5 billion crowns. The program targets affordable rental housing for young families, necessary professions, and the so-called middle class in general, and is part of the Ministry of Regional Development’s extensive reform of Housing for Life.
The goal of the Affordable Housing investment program is to increase the share of available rental apartments, both through their reconstruction or construction and in the case of municipalities, also through purchase options. As a result of the sharp rise in real estate prices and the reduced availability of housing loans, it became impossible for many households to pursue their own housing, and therefore the demand for rental apartments increased significantly. This increases price pressure in this area as well. Public support for investments in the construction of affordable apartments with lower than market rent was made possible by the April notification, which the MMR negotiated with the European Commission.
“Thanks to the program, up to 5,000 apartments will be created in addition. At the moment, there is a minimum of them in the property of the municipalities. The new apartments will mainly help young families, but also seniors and people with normal incomes. It will also enable municipalities to better respond to fluctuations in the labor market and recruit or retain workers in certain professions. These are primarily teachers, health workers, social workers, firefighters, or police officers,” added Ivan Bartoš, Deputy Prime Minister for Digitization and Minister for Regional Development.
Funds from the Affordable Housing program can be used to build rental apartments either in newly built apartment buildings or in reconstructed buildings. The program also supports the possibility of purchasing apartments if the applicant is a municipality, region, and a legal entity established by them, a state subsidy organization, a registered church or religious society or a legal entity established by them, and a public benefit legal entity.
“The amount of support can reach up to 90% of eligible expenses, the subsidy can only be provided in combination with a loan,” explains the conditions of the program, Director of the State Investment Support Fund, Daniel Ryšávka. “Details on the conditions of the program are available on the website of the State Investment Support Fund, which administers the program. Regional Centers for the Support of Housing Investments have also started to operate in all regions. They will offer the mayors suitable financing models for affordable housing projects and give advice, for example, in legal and technical areas,” adds Daniel Ryšávka.
Affordable rental housing is a special category (unlike owner-occupied, cooperative, or other forms). It will be provided to selected target groups for a set lower than market rent.
Preparation of housing construction in municipalities
The Czech Republic has been struggling for a long time with insufficient construction of new, especially municipal, apartments. The results of last year’s MMR survey show that only about a third of larger municipalities in our country had any experience with their own housing construction in the last eight years. At the same time, roughly 70% of all municipalities are dissatisfied with their housing stock.
“Unfortunately, the preparation of the construction of apartments in municipalities is often hampered or completely stopped by a lack of funds or a lack of experts. We are therefore trying to remove these barriers. At MMR, we have already supported the preparation of 72 housing projects. However, the interest of male and female mayors is much greater, which is why we released additional funds. They can be used for the preparation of documentation or perhaps for the realization of an architectural or urban planning competition,” added Deputy Prime Minister and Minister Ivan Bartoš.
MMR has already offered a total of over 1.4 billion crowns from the National Recovery Plan for the project preparation of municipalities.
Links
You can find a list of regional housing investment support centers and their contacts in this link: https://sfpi.cz/regionalni-centra-podpory-investic-do-bydleni/
You can get more information on the Housing for Life reform on the Housing for Life website: https://mmr.gov.cz/cs/microsites/bydleni-pro-zivot/uvod
You can find the terms of the Affordable Housing program at Affordable Housing – SFPI: https://sfpi.cz/dostupne-bydleni/
Results of the municipal housing survey: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://mmr.gov.cz/getattachment/c77d59d1-044d-4403-a596-a5e68cffac25/Vysledky-setreni-Obecni-bydleni-2023.pdf.aspx?lang=cs-CZ&ext=.pdf