We seem to follow the Irish example in the ways to correct our economy and many of the steps undertaken in Cyprus are a copy of Ireland’s measures.
The most recent one is the incentives that the Cyprus Government has introduced in order to provide affordable housing, both for rental, as well as for acquisition purposes.
The lack of development over recent years (post-2013) of suitable housing mainly for the middle income groups, increased demand emanating from student housing, Airbnb and restricted financing to home buyers, has increased demand for rentals, which, according to the Ministry of Labour, caused rents to increase by 30%-40% in Limassol and Nicosia over the last couple of years.
So, the Government came up with the idea of providing incentives to make the development of affordable apartments/housing and units to let attractive (in order to increase supply and satisfy demand).
We have examined the incentives and we think that the measures are not enough nor imaginative (whereas in some cases is contradictory) in order to help the situation.
Basically, the incentives, on the one hand, provide increased building density, so that more units can be provided on a certain plot, but then it places numerous restrictions and limitations, so at the end, it is a “gift without substance”.
The main cause of the housing shortage started 15 years ago when some theoreticians from the Planning Department decided to fix the minimum size of apartments/houses, depending on the number of bedrooms.
So, we ended up with a 2-bedroom unit having a minimum size of 100 sqm, a 3-bedroom of 120 sqm and so on.
Instead of letting market demand express what people want/can afford, we ended up with units around 20%-30% larger in size than what people can afford – hence one of the reasons for the problem.
Quoting the ex-minister of Environment of Ireland, who declared that “we should build houses that people can afford” (affordable housing) and following their experience, we have (as a Government) now woken up to the facts of life and reality.
We objected to the fixing of housing sizes 15 years ago and every year 2-3 times we remind the Government how wrong this was.
Now we are faced with unaffordable housing and even with the incentives given, the Government came too late to cover Cyprus’ needs (especially for the younger generation and the lower income groups).
Such incentives/new projects will not come onto the market earlier than 2-4 years and in the meantime the shortage of affordable housing will become worse (a similar situation exists with the unworkable common fund law for which we object to regularly through direct contact with the Interior Minister and keep going in the hope of correction).
We are annoyed and angry about the stupidity of our own “experts” on the subject and we have even proposed to have those in charge and with deaf ears to bear some sort of personal financial responsibility and or letting them go from the Civil Service.
The creation of incentives for affordable housing should be compared in a cost/benefit analysis in order to ascertain if the incentives will work and reach the desired goal or stand to fail (as we expect).
We live in hope dear readers, but even our own hope is fading away (be it that we will not stop nagging and criticize the attitudes, including the independent technical groups, such as the Architects Association, planners and others who have a role in this – but keep indifferent-quiet.
In our criticism we include the journalists who do not appreciate, it seems, their power and effect they have through their publications on corrective measures needed.
It took one month of reporting in the local media for the Government and political parties to wake themselves up and to face a problem that was in existence for over 7-8 years.
We have asked if the Irish Government could lend us its Minister, who came up with this idea of affordable housing, to teach our thick-headed planners and others how the job is done.