Prague will start supporting cooperative and association housing

Prague – Prague will provide land to housing cooperatives and civic associations for the construction of residential buildings under favorable conditions. The rules for both forms of support were approved by the councilors last night. There have been disputes in the coalition regarding cooperative housing in the past, which Prague Sobě and the Pirates rejected twice in the summer at the council. The city will now begin preparing pilot projects on selected plots of land.

The support for both cooperative and association housing assumes that the city would provide its land for the construction of a residential building through a so-called building right for up to 99 years. On this land, either cooperatives established by the city along with a private partner, or special civic associations inspired by the German so-called baugruppe, would then build. In both cases, the entities will buy the land from the city only after the building itself has been paid off.

According to the city leadership, the advantage is that the cooperatives and associations organized by the future homeowners will save the margin that people would otherwise pay to a development company. Furthermore, until the house is paid off, the price will be reduced by the value of the land. Overall, the purchase price of apartments is expected to decrease by up to one third. In return for providing the land, the city will gain the right to use part of the apartments in the building, which can be used for accommodating representatives of necessary professions, such as healthcare workers, teachers, firefighters, or police officers.

Deputy Mayor Petr Hlaváček (for TOP 09) stated that while both projects are similar, they are intended for slightly different target groups. The chairman of the housing committee, Petr Zelenka (Prague Sobě), added that in the case of association housing, it is more about smaller buildings with up to 20 apartments. He mentioned that the form of an association allows for more flexible rules, for example, regarding the possibility of leaving the association if the members' life situations require it.

The city is now identifying suitable plots for the first similar projects, in cooperation with the recently established Prague Development Company. Councilor Hana Marvanová (for STAN) previously stated that municipal districts, specifically Prague 11, Prague 13, Prague 8, and Prague 12, have already expressed interest in cooperative housing projects.

Marvanová has been trying to push for the support of cooperative housing for some time; however, a coalition dispute arose around it, with representatives from Prague Sobě and the Pirates opposing the plan. They criticized the fact that after paying off the debt, the cooperative would need to buy the land from the city at the appraised price regardless of the appreciation of the plot. According to them, the city should have a sustainable housing policy set up so that the money obtained from sales could be used to finance further similar projects. This problem is finally expected to be addressed by an annual payment into the affordable housing development fund, which is planned for both cooperatives and associations.

In recent years, Prague has been grappling with a housing crisis and high housing prices, making private apartments unaffordable even for the middle class. According to recent information from the consulting firm Deloitte, the average asking price for available new apartments in Prague at the end of October increased by seven percent year-on-year to 118,200 crowns per square meter.