According to Hlaváček, eight to ten plots of land have been selected for pilot projects in federal housing. “We mean smaller plots. We would like to build the larger ones as a city or providers of construction cooperatives, “Hlaváček said, adding that, for example, in Palmovka, where 280 rental city flats could be built, the municipality wants to build them itself.
Hlaváček refers to federal housing as a baugruppe, which is a type of construction of smaller apartment buildings, where a group of ten or fifteen people agree and build a house on their own. “When we look at German examples, they are often plots of land that no one knew how to deal with. They required a larger ceiling and a higher personal commitment, “he said, adding that unique buildings were then created.
However, the federal housing project approved by the council has greater ambitions. Associations could build houses with dozens of flats on city land. Fifty people and families, for example, would be selected by lot by lot and a developer manager would be appointed, ie a person who would organize everything, and the association would take out a loan for the construction.
“We have agreed with Komerční banka a unique financing model that combines the advantages of classic project financing and a mortgage loan,” said the chairman of the Municipal Housing Committee Pavel Zelenka (Prague himself).
The loan should have a maturity of up to forty years and low rates. “Such a product is not yet on the market and is a huge benefit for the financing of federal housing, because the project is significantly cheaper,” he added, adding that after smaller pilot houses he could imagine larger projects.
Fair price on departure
In such a case, the city can provide land, establish a building right on it for up to 99 years and protect the part of the flats for its own purposes. The members of the association can, over time and generate, pay not only the cost of the apartment but also a proportion of the land, the value of which will be regularly valorized. For example, the monthly payment for an apartment of 75 square meters should be around ten thousand crowns at an entry cost of 500 thousand crowns.
The money for the land will go to the Affordable Housing Development Fund, from which the city will pay for the preparation of other projects to ensure the sustainability of urban housing. The association can completely buy the land and acquire the flats into personal ownership. Unlike cooperatives, a stake in an association cannot simply be sold. It must be offered first to buy the city, then to the market. Naturally, people can also pass on their membership in the family.
“We focused a lot on ensuring that the people who joined the project have a guarantee that they can leave it at different stages of their lives without losing their investment,” said Zelenka. “The invested funds will be paid to people paid at the valorised value as the price of housing has changed. If you pay half the cost of the apartment, if you leave the association, you will get half of the current value of the apartment, “he added.