Brussels, 9 April 2024
The European Commission has approved, under EU State aid rules, a €476 million Czech scheme to support the construction, reconstruction, and acquisition of affordable rental flats. The project will be partly funded by the Recovery and Resilience Facility (‘RRF’).
The aim of the scheme is to facilitate an additional supply of rental flats that the market would not supply by itself. The flats will be provided for an affordable rent to households falling within one of the following groups:
(i) households with insufficient funds,
(ii) young families, and
(iii) households where at least one member is active in a profession of essential nature, such as healthcare, education, maintenance of public security, provision of social services or public administration.
Under the scheme, the aid will take the form of a loan or a combination of a loan and a direct grant. Under the scheme, the support for construction and reconstruction will be open to all legal persons established within the European Union, the European Economic Area or the Swiss Confederation under certain conditions, while only legal entities of the public sector and non-profit organisations with a proven long-term commitment to the provision of social or affordable housing will be eligible to receive aid for acquisition of properties. The beneficiaries will be selected based on a number of criteria such as quality of design and environmental, social and economic sustainability. Aid under the measure will be granted no later than 31 December 2029.
The Commission assessed the measure under EU State aid rules, in particular under Article 107(3)(c) of the Treaty on the Functioning of the European Union which enables Member States to support the development of certain economic activities under certain conditions. The Commission found that the measure is necessary and appropriate to support the supply of affordable rental flats. Moreover, the Commission concluded that the measure is proportionate, as it is limited to the minimum necessary, and has a limited impact on competition and trade between Member States. On this basis, the Commission approved the Czech measure under EU State aid rules.
The non-confidential version of yesterday’s decision will be made available under case number SA.106249 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.