The affordable housing incentives aimed at land development entrepreneurs

Entrepreneurs in the land and building development sector recently had the opportunity to be informed, receive clarifications and exchange opinions on the new housing policy implemented by the Interior Ministry with the aim of creating conditions for affordable housing.

The event under the title "The new housing policy: From theory to practice" was organised by the Cyprus Land & Building Developers Association that took place at the Experience Center of PwC's headquarters in Nicosia on 21 October.

It had a focus on special housing incentives with urban planning benefits provided to industry professionals towards their investment in the affordable housing market.

In a speech on behalf of the Minister of the Interior Constantinos Ioannou, the Permanent Secretary of the Ministry, Dr. Elikkos Elias, noted that the special housing incentives with urban planning benefits are part of the integrated housing policy and include a coherent network of innovative policies that provide for an increase in the maximum building factor, with the aim of involving the private and wider public sector in the production of housing stock, new and existing that is not being utilised, and making it available at affordable prices.

The Interior Ministry is pleased that June's updated incentives have caught the attention of land developers, with increased interest in investing in the affordable housing market.

According to the Permanent Secretary of the Interior Ministry, the first urban planning applications for the utilisation of housing incentives have already been submitted, while a number of projects for affordable housing are being examined and, soon, new applications are expected to be submitted towards securing planning permission.

"On this occasion," he said, addressing the land development and construction entrepreneurs, "I would like to thank you warmly for your interest and continued support, as a social partner, in the Government’s work to alleviate the housing issue."

On his part, the Chairman of the Cyprus Land & Building Developers Association, Yiannis Misirlis, emphasised that the multi-level measures announced a year ago are moving in the right direction, to note that the common goal of all is to find radical solutions within the state housing policy.

The conditions for the utilisation of urban planning incentives, as well as the process of their use by land development entrepreneurs, were presented by Senior Planning Officer, Department of Town Planning and Housing, Natasa Kaspari and the General Director of the Cyprus Land Development Corporation (CLDC-KOAG), Eleni Symeonidou.

The philosophy of the new housing incentives, as they indicated, is to provide increased development possibilities for plots, given that, during the implementation of the development, the owner will create, alongside his own development, other affordable housing units, which he will make available to beneficiaries which will be selected by the CLDC and at a price that will be determined by the organisation itself. As mentioned during the presentation, the three housing incentives to produce affordable housing are:

• For the production of affordable housing for sale with an increase in the building factor of up to 45% (Incentive +45%).
• For the production of affordable housing for rent, with an increase in the building factor of up to 45% (Built to Rent+45%).
• For the production of affordable housing for sale, with an increase in the building factor of up to 25% (Incentive +25%).

With regard to the ways of utilising the incentives for the first and third categories, the creation of affordable housing within the main property planned for purchase by beneficiaries selected by the CLDC, at a disposal price that it will determine, or for a secondary property for purchase by beneficiaries that will be selected the CLDC at a disposal price that it will also determine or the purchase of the incentive through the payment of monetary compensation.

For the Built to Rent +45% category, it is planned to create an affordable “roof” within the primary property for rent by beneficiaries selected by the CLDC, at an affordable rent determined by the Department of Lands and Surveys.

It is noted that the presentation by Kaspari and Symeonidou was followed by a presentation by Constantinos Savvides is a Director of Deals services and in charge of the Real Estate Advisory practice at PwC Cyprus, on the topic "New incentives for affordable housing - Sustainability analysis of the implementation of incentives (indicative development scenario)".

(Source: InBusinessNews)