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The Ministry of Interior, referring to an article published today by the newspaper "Phileleftheros" entitled: "Housing for 600 poor families in the air", notes the following. However, during the presentation of the project before the Minister of Interior by the Cyprus Land Development Agency (CLDA), it was reported that the Agency had a budget deficit of EUR 7 million, which made the project not financially viable for the CLDA, due to a reduction in the expected amount to be received from the Cyprus Investment Programme, which was terminated. Therefore, its promotion, in the size and scope originally planned by the CAA, is not possible except with the financial contribution of the State which, as indicated by the CAA, amounts to 20 million only for the first phase.
It is noted that the project cannot be financed either by commercial banks or by the European Investment Bank, which could potentially finance part of the project cost subject to State guarantees, which the Ministry of Finance considered it prohibitive to grant. At the same time, according to the update from the Agency, no inflows for financing even a first phase of the project are expected from other sources (other than the CIG reserve and the receipts already received from the CCP), while the original plan was for many more housing units to be concessioned at affordable rent.
With the above in mind, a meeting was held in May 2023 between the COAG Board and the Minister of Interior to discuss these issues and the Agency's plans, but without a specific request for funding to assess whether it could participate in the State's affordable housing planning.
The COAG sent a study to the Ministry of Interior two months later, which submitted scenarios for the production of housing units. Depending on the scenario, a state grant/financing of €8 - €45m is required, with a production of 172 to 619 housing units, within five years, including, however, a number of assumptions/variables in the above calculations.
The Ministry of Interior will soon announce a new housing policy, with an emphasis on affordable housing, to address the housing problems faced by our fellow citizens. In this context, it is considering all of the above scenarios, and the role that the CRA could play in producing affordable housing in a way that ensures the viability of the project.
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