The Ministry of the Interior of Cyprus (MoI) has presented updated data to Parliament regarding applications submitted for urban planning permits under the incentive program for affordable housing construction. As of November 20, a total of 32 applications had been submitted nationwide, covering the development of 1,600 residential units (245 of which are designated for low-income citizens).
Legal Framework and Basis of the New Incentives
In 2024, the Cabinet of Ministers approved an initiative introducing several incentives to promote the construction of affordable housing across the island.
The approved plan introduces two new alternative options for using additional building density coefficients, depending on the needs and planning strategy of each interested developer.
The housing incentive includes increased maximum allowable building density:
- Up to 45% for residential zones with a density coefficient greater than 1:1
- Up to 25% for residential zones with a density coefficient equal to or less than 1:1
The incentives apply as follows:
- For projects with a minimum net area of 1,000 m², the maximum allowable density increase is 45%
- For projects with a minimum net area of 4,000 m², the maximum allowable density increase is 25%
Using the increased building density obliges developers to allocate part of the resulting additional floor area to affordable housing:
- 25% of the additional space must be provided to beneficiaries of the affordable housing program; the remaining 75% may be used at the developer’s discretion (for zones with density > 1:1)
- 15% of the additional space must be allocated to the program; the rest can be used freely (for zones with density ≤ 1:1)
Purpose of the Amendments and Implementation Monitoring
The adjustments are intended to create more favorable conditions for constructing economically accessible housing and to increase overall housing development volume. The Ministry emphasizes that all incentives are under continuous monitoring and will be reviewed if results fall short of stated goals.
The Cyprus Land Development Corporation (ΚΟΑΓ), the main operator of national housing policy, is responsible for allocating affordable housing units.
Statistics on Submitted Urban Planning Applications
According to the Ministry of the Interior, most applications originated from Limassol, where demand for housing has traditionally been the highest. A total of 16 applications were submitted for 855 residential units, with 185 units earmarked for affordable housing. The Ministry has approved 7 applications, while 9 remain under review.
In Nicosia, 5 applications were registered for 175 units, of which 33 will serve social needs. Four projects have already been approved, and one remains under examination.
Larnaca received 9 applications covering 3,256 residential units, with 27 designated for affordable housing. Four projects have been licensed, one application was withdrawn, and five are still being reviewed.
Paphos received 2 applications for 219 new units, and both are still under evaluation.
Interestingly, information about specific developers has not been disclosed, as it does not fall under parliamentary oversight requirements.