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High rents and homelessness

A rise in already high rents and an increase in the number of homeless people has led parliament to urgently call on the government to intervene and provide solutions to problems caused by high rents, especially in Limassol.

Cyprus: High rents and homelessnessWITH HOMELESSNESS on the rise MPs and other stakeholders have called for the government to revise its policy on social housing given to 1974 refugees and their family.

The House Interior Committee on Tuesday heard a group of activists claim that the state services are not responding to their calls to help homeless people who cannot afford a roof over their heads due to the rise in rents.

A representative from the “Movement for protection of the right to housing” pointed out to the committee that a person with an income of €500 a month is homeless because “to rent a small place to live they are asked a rent of €600 a month with two months up front and a month’s deposit “.

He indicated that the total cost of moving could reach €2,500.

“You are accountable to these people, you have to assume your responsibilities,” Lefteris Georgiou said, addressing both the MPs and a Ministry of Interior official present at the meeting.

The ministry’s representative confirmed that it had received 130 complaints, regarding homeless people. She said that 50 people involved in the cases reported were taken in by their family while adding that the Limassol Municipality has suggested creating a centre to temporarily accommodate homeless citizens.

She added that 80 persons were housed in reception centres adding that out of these 80 individuals, 60% were third-country nationals.

Individuals needing immediate shelter are accommodated in hotels, she added.

On Wednesday the cabinet approved of a 10% increase on the rent subsidy for vulnerable groups. The increase will be effective as of 1/1/2019 and will be given to some 4,500 beneficiaries.

The previous increase of 15% was approved on 29 November 2017, with this 10% rise being added to it, the total increase has risen to 25%.

As things are today the ceiling for a rent subsidy is €154 per month

A government roadmap is being prepared to pave the way for affordable housing, which will include a series of incentives.

Referring to the strategic housing plan being prepared, the ministry said that it will be more targeted than the previous one, noting that within the next few months the first phase of the plan, which concerns the rural areas, will be put into motion.

Limassol Rents

AKEL MP Eleni Mavrou argues that rents in Limassol are twice as high as the average rent island-wide, while at the same time, citizens’ incomes are not rising.

She said rents in Limassol, and to a lesser extent in Nicosia, are higher than European cities such as Amsterdam and Barcelona.

Quoting data from the statistical services, she said that average rents for apartments rose by 12.5% island-wide in 2017. In Limassol, they jumped by 25%. For houses, rents rose by 9.2% and 10.20% in Limassol.

According to the same data, studio apartments in Nicosia are rented between €250-€500 (near universities €350-€500) while one-bedroom apartments range from €350-€675, two-bedroom €500-€850 and three-bedroom range from €850-€1,300.

Talking to the Financial Mirror, Mavrou referred to tragic cases that have been brought to her attention.

“Just the other day an elderly citizen contacted us, to inform us that she is being evicted from the house she is currently renting as the owner feels that he is entitled to raise the rent. The old woman was evicted because she could not cover the increase asked by the landlord,” she said.

Mavrou added that the elderly lady receives the Minimum Guaranteed Income which is €400 with her rent being 350 while receiving €150 as rent subsidy from the welfare services.

“That means she had to pay €200 towards her rent and get through the month with the remaining 200. How is this person expected to pay her bills and buy her medication?” wondered the AKEL MP.

She believes that rents, especially in Limassol, are being pushed up by expectations created by a property bubble in the real estate sector.

“Euphoria is being cultivated around the construction and real estate industry and a seemingly high demand has led property owners to feel that they are entitled to more rent”.

Mavrou added that she has asked for information on the Ministry of Finance’s study on the implications of the citizenship for investment project, which she said helped to create the bubble.

She said that there are only a handful of areas where demand is indeed high.

Mavrou said the 130 homeless cases mentioned in parliament are just the tip of the iceberg.

“These are the people we know of. There are certainly more that are either staying with relatives or friends”.

She expects the problem of high rents and homelessness to worsen once banks start repossessing homes over the coming months.

Affordable housing

Andreas Frangos, the President of the Cyprus Land Development Corporation’s (CLDC) Board of Directors, told the Financial Mirror that the solutions lie in the revision of state policy regarding social housing.

“Until recently social housing was provided to 1974 refugees and their immediate family on the sole criteria of origin, that is if they originated from an occupied village. We believe that it is due time that we revise this policy. The state should start providing social housing on the basis of financial criteria to help those truly in need,” said Frangos.

He said that by providing social housing at affordable prices for people in need, would go a long way in tackling high rents.

Frangos noted that a lot of young couples are not able to afford to buy a house as banks are still reluctant to give out mortgages.

Acting on President Nicos Anastasiades’ orders, the CLDC has taken on the task of preparing a file with the terms of reference for the expert who is to prepare a study on government housing policy.

Anastasiades announced during his election campaign that the state’s housing policy would be placed under the auspices of the CLDC.

Frangos said that along with the file containing the terms of reference, the corporation has passed on to the president a set of recommendations which could help the state to tackle the problem of high rents and homelessness.

“Unfortunately, the state does not seem keen on our proposals and instructed us not to proceed with any new projects until the study on the state’s housing policy is completed.”

The state could impose on developers of big projects to include at least one social housing unit to be given to the corporation. “In France developers of big projects must allocate 20% of their project to social housing units,” said Frangos.

He also referred to the corporation’s proposal to build premises which can host young professionals wanting to set up their own business.

“These buildings can be used as shared offices for start-up companies which cannot find financing to rent a workstation”.

However, he expressed his disappointment at the stance of the government, as he does not understand why the corporation has not been given the green light.

Readers' comments

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  • Peter Davis says:

    One would have thought the market would dictate the level of rents. A Landlord will try to maximise their return in the property, whilst if it is set too high then the property will remain empty.

    It’s simple rule of supply and demand, until the Government gets involved, then it becomes complicated.

  • Deanna says:

    All of a sudden it should be on the conscience of government to provide so-called ‘affordable’ housing….
    From the mouth of ‘Andreas Frangos, the President of the Cyprus Land Development Corporation’s (CLDC) Board of Directors’……

    No, not ‘affordable’ housing (affordable for whom?), but government/municipality aka social housing. They could do-up a load of empty properties without building anything.

    How I hate opportunists.

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