NICOSIA, May 20 (Xinhua) -- A new scheme to provide affordable housing to low income people in Cyprus will soon change the structure of the housing market, which is currently targeting middle and high income people, Interior Minister Constantinos Petrides told the state radio on Monday.
Petrides unveiled the scheme on Friday, saying it is based on the needs of young people at the start of the creation of a family and also of low income families.
"The plan aims at creating affordable housing for vulnerable groups of the population based on eight pillars, including the introduction of building incentives and simplified schemes for certain areas," Petrides said.
Petrides said the scheme will yield immediate results for targeted groups of the population by producing housing that will cost under 30 percent of a household's gross income.
He said that the average construction cost in 2017 was 869 euros per square meter for flats and 1,086 euros for houses.
An affordable 80-sqm house will be around 70,000 euros and a 100-sqm flat, around 86,000 euros, he added.
The eight pillars of the scheme include the introduction of planning incentives and tools to produce affordable housing and create an affordable rent market, rent subsidies, introduction of new simplified and targeted housing schemes for areas neighboring the buffer zone which divides the island, and also for mountain regions.
Incentives also include an increase of 25 percent in total allowable building area for lower cost flats or houses for selling or for low rent. The increase in allowable building area goes up to 40 percent for large building sites, provided that 20 percent of the space will be for affordable housing.
Eligible for the scheme are people with a yearly income of 25,000 euros gross for a single-parent family or a person living alone, 45,000 euros for a couple with no children, 50,000 euros for a three-member family, 55,000 euros for a family of four, and 65,000 for families of five-people and above.
Petrides said an innovation is the funding of the scheme by the much-criticized citizenship by investment program, with 75,000 euros for every passport issued. It is expected that the program will provide a total of 55 million euros.
"Let those who criticize the passport program as immoral to suggest practical ways to raise money for cheap housing for which they are clamoring," he said.
The housing problem has been exacerbated in recent years for several reasons, including the 2013 economic crisis that left many people without a job and unable to repay their mortgage and a sharp increase in the student population.
With tens of thousands of university students seeking accommodation, rents have gone sky high.
Data showed that compared to 2014, rents went up by 68 percent in Paphos and 57.47 percent in Limassol, 44.81 percent in Nicosia, 42.86 percent in Larnaca and just 5 percent in Famagusta, which does not have a university.
These increases are translated into a rent of about 600 euros a month for a two-bedroom flat in a not so new building in Limassol, with rent in other cities close to that.
