Brussels (Brussels Morning) – EU Commission approves €476 million Czech scheme for affordable rental flats, aiming to address housing shortages for low-income families and essential workers.
Today, the European Commission has authorised, under EU State aid regulations, a €476 million Czech scheme to fund the construction, reconstruction, and acquisition of affordable rental flats. The scheme will be partly supported by the Recovery and Resilience Facility (‘RRF’).
Will the Czech Scheme Solve Housing Affordability?
According to the Press of the European Commission, the purpose of the scheme is to encourage an additional reserve of rental flats that the market would not supply by itself. The flats will be delivered for affordable rent to families falling within one of the following classes: (i) households with inadequate funds, (ii) young families, and (iii) households where at least one member is involved in a profession of essential nature, such as healthcare, teaching, maintenance of public security, condition of social services or public administration.
How Does the Scheme Work?
Under the scheme, the support will take the form of a loan or a variety of a loan and a direct grant. Under the project, the support for construction and reconstruction will be available to all legal persons designated within the European Union, the European Economic Area or the Swiss Confederation under specific conditions, while only permitted entities of the public sector and non-profit associations with a proven long-term dedication to the provision of social or affordable housing will be qualified to receive aid for acquisition of properties. The beneficiaries will be determined based on a number of criteria such as grade of design and environmental, social and economic sustainability. Support under the standard will be granted no later than 31 December 2029.
Is the Czech Initiative a Housing Game-Changer?
The Commission evaluated the action under EU State aid rules, in certain under the Treaty on the Functioning of the European Union which allows Member States to back the development of certain economic activities under specific conditions. The Commission located that the measure is necessary and relevant to support the supply of inexpensive rental flats. Moreover, the Commission concluded that the effort is proportionate, as it is restricted to the minimum necessary, and has a fixed impact on competition and trade between Member States. On this ground, the Commission authorised the Czech measure under EU State aid rules.
What is the Purpose of a Recovery and Resilience Facility?
The Recovery and Resilience Facility (RRF) is a momentary instrument that is the centrepiece of NextGenerationEU -the EU’s strategy to emerge more powerful and more resilient from the present crisis.
Through the Facility, the Commission introduces funds by borrowing on the capital markets (giving bonds on behalf of the EU). These are then open to its Member States, to execute ambitious reforms and investments that: drive their economies and societies more bearable, resilient and equipped for the green and digital transitions, in line with the EU’s preferences; handle the challenges recognised in country-specific proposals under the European Semester framework of economic and social policy coordination.
The RRF is also essential for implementing the REPowerEU plan – the Commission’s reaction to the socio-economic difficulties and global energy market disruption driven by Russia’s invasion of Ukraine.
