Press Conference of the General Secretary of AKEL, S. Stefanou on housing policy

 

16 May 2024, Nicosia Town Hall

Last year, AKEL organised a major, nationwide campaign on housing policy. During this campaign, we presented specific proposals, which we submitted to both the Government and the relevant Departments.

A few months after the conclusion of the AKEL campaign, the Christodoulides Government announced the ‘Unified Housing Policy’. AKEL noted the positive elements it identified in the government announcements, which were largely the result of the political pressure we had exerted through our campaign.

However, we had since then pointed out specific problematic points in the government’s announcements.

First, the impact of the government’s measures was not sufficient enough to increase the supply of housing to meet the strong demand for housing and society’s real needs.

Second and most importantly, the Government did not provide an answer to the major problem of financing for the acquisition of housing.

To these two problematic areas, we add a third: the tardiness and long delay in implementing the programmes. Delay perpetuates and exacerbates the problems.

Today’s press conference is being held to assess the implementation of the government’s plans and to reiterate AKEL’s specific proposals on the housing problem.

Eight months after the government’s announcements, we have the following results:

• The revision of the town planning incentives, although it came into immediate effect, did not work as expected.
• The ‘Renovate-Rent’ scheme has not yet been implemented, despite the fact that the government announced that its implementation would start last January.
• The ‘Build to Rent’ scheme is still pending as the necessary studies for the construction plans have not been carried out.
• The ‘Allocation of Plots to Families’ scheme has registered zero progress.
• The ‘Housing Subsidy for Young Couples’ scheme has not yet been implemented.
• The plans of the Cyprus Land Development Corporation (CLDC) for affordable housing production are very limited and are not expected to have a substantial impact any time soon.
• Plans for the highland and remote areas, while previously starting to be implemented in March, have been suspended until May.
• The ‘I BUILD’ Scheme for the 1974 refugee housing estates is experiencing delays, as is the project for the reconstruction of refugee flats.

At the same time, key problems remain unresolved:

• Borrowing costs are soaring.
• There are no options for sustainable financing, a problem that particularly afflicts thousands of young couples.
• Construction costs and, by extension, the prices of acquiring a primary residence are constantly rising.
• A huge demand for renting, which is also driving up the cost of renting, is unavoidably being recorded.

For all these reasons it is urgent to implement other, feasible measures such as:

First: The establishment of a Unified Housing Authority to have overall responsibility for policy making on Housing. Its role will be to coordinate all housing programmes, monitor the progress of their implementation, evaluate their results and regulate the targeting of state priorities.

Second:  The creation of a financing body with the assistance of the state on the basis of socio-economic criteria so as to enhance the ability of small and medium-sized households to acquire housing. The Housing Financing Corporation, from the moment it was turned into a bank by the Anastasiades-DISY government in 2017, cannot play this role.

Third: The state should take a substantial initiative to increase the housing reserve.

If the government does not respond to these critical issues, there can be no comprehensive housing policy.

We are ready to contribute to the implementation of a comprehensive and socially-oriented housing policy that focuses on the following measures:

1. Transforming the Cyprus Land Development Corporation into a central body of state policy on housing issues.
2. Restoring the social character of the Housing Financing Corporation and strengthen it so that it operates as a funding agency for middle and low income groups.
3. Utilizing state land or other public land in cooperation with the private sector for the construction of affordable housing, either for purchase or for rent, along with simplifying procedures in relation to planning and building permits.
4. Including social housing in the Government’s plans in cooperation with Local Authorities for the vulnerable groups of the population.
5. Covering the cost of borrowing for new and existing loans through interest rate subsidy schemes. Towards this end, we have submitted a Bill Proposal in Parliament to tax the windfall profits of the banks and the revenues generated should also be utilized for interest rate subsidy.
6. Rapid implementation of incentives granted to the private sector to increase the stock of affordable housing.

In an effort to contribute with ideas and proposals, we are submitting today the research requested by our MPs from the competent parliamentary services on the issue of Social Housing Projects in the countries of the European Union. Its findings are quite interesting and if the Government wishes, it can identify useful examples and ideas from the practice of other countries.

There is, for example, the innovative model in Austria that brings together public and private sector efforts. A similar partnership can be observed in Spain. There are examples of countries where local government plays a dominant role in Social Housing Programmes, as well as countries that have broadened the criteria for access to social housing beyond income, age and family circumstances.

The survey also includes interesting data on the funding of housing policy which is largely provided by government budgets but there are also countries where resources are derived from revenues collected from property sales and rents.

The problems created by the housing crisis afflict a significant section of Cypriot society. There needs to be a real will demonstrated and specific policies need to be elaborated and applied.

AKEL will support every effort in the right direction and will continue to submit realistic and feasible proposals so that housing remains a right for all and not a privilege for the select few.