The draft of the new housing policy through OAED

By Dimitris Katsaganis

Countdown to the implementation of the new public housing policy with the “vehicle” of the Public Employment Service (as the OAED has been renamed) with the aim of supporting young couples and socially vulnerable groups has begun.

As the Minister of Labor, Mr. Kostis Hatzidakis, stated yesterday, this is about restarting the housing policy, pointing out that, for many years, there has been no substantial, central, coordinated housing policy.

As he noted, the new housing policy will focus mainly on young couples, as housing costs are high and this fact creates pressure and increases the demographic. “We will make use of all the tools and implement a modern benefit policy in terms of housing”, he underlined.

According to secure information from Capital.gr, a special working group has been set up with the aim of formulating specific proposals for the implementation of the provisions of the relevant law, while executives at the highest government level are dealing with this matter. Also, it is very likely that the Prime Minister himself, Mr. Kyriakos Mitsotakis, will make specific announcements from the platform of the TIF.

The same sources state that the immediate priority is the rent subsidy measures and then the lending for the acquisition of a residence. And this is because the lending will require the drawing of large sums from the reserves of DYPA-OAED in the Bank of Greece, but also the involvement – at least in the case of interest rate subsidies – and the banks, while the status of guarantees in case of inability to repay (bank) loans.

It is recalled that the Hatzidakis Law specifically provides for the possibility of acquiring real estate and promoting partnerships to achieve the goals of the Public Employment Service related to housing assistance.

The Public Employment Service (DYPA), more specifically, can acquire unstructured and structured properties that are necessary for the exercise of its responsibilities and the achievement of its goals, as provided for by the current legislation.

In this context, DYPA can cooperate with public or private entities for the construction of real estate in order to promote government policies regarding the housing protection of the workforce and its families.

The government will use a reserve of 1.5 billion euros that DYPA (formerly OAED) has, which instead of just making workers’ housing, will be able to move in a more modern way, more flexibly and at different levels.

DYPA will be able to purchase or lease plots of land for development through Public-Private Partnerships (PPPs) and will implement a variety of individual actions that may be:

– the concession with a low rent so that in a few years with appropriate arrangements the employee can buy the property (rent-to-own),

– the rent subsidy,

– the interest subsidy,

– the subsidy for buying a first home or renovating existing buildings in order to make them available to employees.

Housing programs will not only target the workforce but also young people as a whole, as the government is interested in supporting the start of young couples as we have an acute demographic problem and housing workers, especially young people, will be a priority for the government which seeks to put social policy into practice.

Recommendations

Valid information from Capital.gr states that the recommendations that have fallen on the table of the DYPA administration from the perspective of competent officials of the same agency in relation to the first major field of the new housing policy – namely that of rent subsidy – provide for the possibility of subsidizing up to and 80% of the rent.

The percentage of the subsidy, according to the same recommendations, should be determined by criteria that have to do with the declared income of the beneficiaries but also the amount of rent and the square meters of the residence. Thus, the lower the income of the beneficiaries, the higher the percentage of the subsidy can be, provided – of course – that their residence has square meters and is rented at a rent consistent with their declared income.

According to the same sources, the second major field of the new housing policy – that is, the acquisition of property – constitutes a more intractable “equation”, as in some cases of subsidy the banks will also be involved.

In particular, proposals foresee subsidizing even the entire interest rate in case of borrowing from a bank. Critical is the issue, the same sources state, of the guarantees (part or all of the loan) that DYPA may have to undertake to the banks for the provision of the relevant loan.

Alternatively, DYPA (formerly OAED) will be able to lend with equity, especially to new couples. Especially the lending with equity from DYPA’s side is related to the real possibility of mobilizing its reserves. These amount to a large amount (1.5 billion euros) and are deposited in the Bank of Greece, but it is not yet clear what percentage of them and at what rates they can be withdrawn per year (given that they are invested in various “parts” ) for the purpose of lending to new couples for the acquisition of a new home.

Within the framework of the same policy, it will be possible, and in fact, according to the same sources, more easily (as it will concern a smaller amount), for a repair or completion loan for a property.