MMR will allocate an additional 400 million CZK for processing documentation for affordable housing

Prague – The Ministry for Regional Development (MMR) will allocate an additional 400 million Czech crowns to municipalities for the preparation of project documentation for the construction of affordable rental housing. Thus, the total amount will increase to approximately 1.4 billion crowns. MMR informed about this in a press release today. The funds will come from European sources, specifically from the National Recovery Plan. MMR will start accepting applications at the end of this May. The legal definition of what can be considered affordable rental housing is included in the amendment to the State Investment Support Fund (SFPI), which President Petr Pavel signed on Monday.

"Expanding municipal housing funds is an effective way to long-term increase the availability of housing. Larger cities are well aware of this and many of them have already embarked on this path themselves. However, I often hear from mayors and mayors of smaller municipalities that expensive preparation of housing projects is holding them back. Without this, they cannot even apply for grants or loans for construction and reconstruction," said the Deputy Prime Minister for Digitalization and Minister for Regional Development Ivan Bartoš (Pirates).

Municipalities, regions, and their organizations can apply for funding from this call. The financial support will enable them to prepare and complete projects up to the tender announcement phase for contractors. It can cover up to 100 percent of eligible costs excluding VAT for the preparation of project documentation, feasibility studies, and construction technological solutions or the implementation of architectural and urban competitions. Local governments can also use the support to cover the preparation of contracts when cooperating with the private sector.

Investments in the construction of rental apartments with lower than comparable local rental prices are part of the ministry's program called Affordable Housing, operated by the State Investment Support Fund. By 2026, seven billion crowns should be allocated for construction. However, Minister of Labour and Social Affairs Marian Jurečka (KDU-ČSL) previously stated that he would like to increase this amount to ten to fifteen billion crowns, as the current amount corresponds more to the needs of one region.

The support for affordable housing from public funds has previously been approved not only by the Chamber of Deputies and the president but also by the European Commission (EK). Its decision allows the Czech Republic to provide support to the affordable rental housing sector until 2030 in the amount of up to 12 billion crowns.

Support can be used for new constructions, building modifications, or extensions. Part of the funds can be used immediately for a maximum of 40 percent of total costs when specific requirements are met. The subsequent subsidized loan can be up to 65 percent of the project price. Overall, grants and favorable loans could cover up to 90 percent of the investment. The repayment period is up to 30 years, and early repayment is without fees.

For the construction of affordable housing, the state has allocated 201 plots to municipalities, with a total area of approximately 73 hectares, or 730,000 square meters. They are located across the Czech Republic. Municipalities will be able to apply for the plots free of charge. The government will seek additional land for the construction of affordable housing, for example, from the Railway Administration or Czech Railways.