Cyprus has introduced innovative housing policies to combat the housing crisis, including ‘built to rent’ and ‘renovate to rent’ schemes. These policies offer increased building coefficients, tax incentives, and obligations for developers to allocate units for affordable housing sales, with the aim of diversifying housing options and making renting more accessible. These groundbreaking regulatory changes and financial incentives have the potential to set a precedent for other nations facing similar challenges.
What are Cyprus’ new innovative housing policies to combat the housing crisis?
Cyprus has introduced ‘built to rent’ and ‘renovate to rent’ schemes to address the housing crisis, offering:
- An increased building coefficient by up to 45%.
- Tax incentives for affordable housing construction.
- Obligations for developers to allocate units for affordable housing sales.
- Initiatives to revitalize vacant properties for rental markets.
Cyprus has stepped into the limelight with their latest approach to address the housing crisis. The Interior Minister, Constantinos Ioannou, announced on Wednesday a set of groundbreaking regulatory changes and financial incentives. These are expected to inject a new dynamism into the housing market, potentially setting a precedent for other nations grappling with similar issues.
Government’s Unified Housing Policy: A Dual Approach
The cabinet’s recent approval of the ‘built to rent’ and ‘renovate to rent’ schemes marks a pivotal shift in the country’s housing policy. The initiatives are the government’s response to the pressing need for affordable housing. By offering additional free building coefficient, they aim to stimulate construction and renovation activities that could benefit the rental market.
Developers and property owners are incentivized to add more residential units and revitalize vacant properties. The expectation is that these efforts will diversify the housing options available and make renting more accessible for those in need. Alongside these measures, tax incentives and exemptions have been put in place to catalyze action.
Built to Rent Scheme: A Boost for Affordable Housing
The ‘built to rent’ plan is particularly innovative as it offers an increased building coefficient of up to 45 per cent on private land, coupled with appealing tax incentives. This scheme is designed to encourage developers to not only build more but also commit to maintaining affordable rent prices for a minimum of six years. It is projected that around 800 new residential units will be realized through this plan within the next three years.
In terms of the revised town planning incentives, a similar increase in building coefficient is granted. Property developers are now obligated to allocate a quarter of their newly developed units for affordable housing sales. For instance, if the construction of 100 apartments was initially planned, a 45 per cent increase in the building coefficient allows for 145 apartments, out of which 25 must be sold at accessible prices.
Renovate to Rent Scheme and Economic Projections
While detailed information on the ‘Renovate to Rent’ scheme is set to be published in January, its core objective is clear: to bring unutilized properties back into the housing market. The plan aims to entice owners to refurbish their vacant properties and offer them for rent at lowered rates.
Looking ahead, the Department of Town Planning has estimated a need for an additional 6,000 to 7,000 housing units over the next few years, a number that is subject to the economic trajectory and the potential influx of businesses and foreign workers. In a move to support economic recovery, the cabinet also extended the Town Planning Incentives Scheme for Business Activity, increasing the compensation percentage and extending the validity of permits to streamline the licensing process.
The Way Forward
The recent initiatives underscore a strategic move towards a welfare state and demonstrate a clear government backing for affordable housing. Stakeholders are encouraged to apply and participate in these schemes, which are the fruits of comprehensive consultation and learning from international best practices. As Cyprus ventures into these policy reforms, the stage is set for a notable transformation in the housing sector, potentially influencing the broader European approach to similar challenges.
What are Cyprus’ new innovative housing policies to combat the housing crisis?
Cyprus has introduced ‘built to rent’ and ‘renovate to rent’ schemes to address the housing crisis, offering:
- An increased building coefficient by up to 45%.
- Tax incentives for affordable housing construction.
- Obligations for developers to allocate units for affordable housing sales.
- Initiatives to revitalize vacant properties for rental markets.
How do the ‘built to rent’ and ‘renovate to rent’ schemes work?
The ‘built to rent’ scheme offers developers an increased building coefficient of up to 45% on private land, along with tax incentives. Developers are also required to commit to maintaining affordable rent prices for a minimum of six years. The scheme aims to stimulate construction and provide affordable housing options.
The ‘renovate to rent’ scheme encourages property owners to refurbish their vacant properties and offer them for rent at lowered rates. More information on this scheme is set to be published in January.
How will these policies make renting more accessible?
The innovative housing policies in Cyprus aim to diversify housing options and make renting more accessible. By offering tax incentives and increased building coefficients, developers are incentivized to build more residential units and allocate a portion of them for affordable housing sales. The revitalization of vacant properties also contributes to increasing the availability of rental properties.
What impact do these policies have on the housing market and the broader economy?
The introduction of these innovative housing policies is expected to have a significant impact on the housing market and the broader economy in Cyprus. The construction and renovation activities stimulated by these policies will help meet the need for affordable housing units and contribute to economic growth. Additionally, the initiatives have the potential to set a precedent for other nations facing similar housing challenges.
