Prague’s First Cooperative Housing Project Approved

The Prague City Hall will build the first city-supported cooperative housing project, in which two blocks of houses with up to 266 flats should be built near Radlická Street in Prague 5.

Today, Prague representatives OK’d the construction, development and funding of a cooperative housing project. The aim of the project is to improve the availability of affordable housing.

Prague has long struggled with a shortage of flats as prices rise even higher. Now, it is looking to co-ops to help keep costs low. In the future, the city also wants to launch other similar projects.

“This is the first ready-made pilot project of affordable housing. Together with the Prague Development Company (PDS), we have selected land and the most prepared one is in Radlická. We have a step ahead of competing for a partner who will set up a team with us. The aim is to ensure affordable housing because the situation is alarming. It is not a single project, but the first one,” said Councilor Hana Kordová Marvanová.

Marvanová also said that Prague is the last in terms of housing availability in Europe and that 17 gross monthly wages are needed to buy an apartment. According to her, Prague cannot replace the work of the state, but it can contribute in the mentioned way by providing land for the city and then also obtaining flats in houses for the necessary but often underpaid professions, such as teachers and nurses.

The house in Radlická will have a gross floor area of 20,000 square meters and will consist of at least two blocks with separate entrances. Inside, there will be 221 to 266 apartments and their average area should range from 54 to 65 square meters. Civic amenities are also taken into account. He estimates the costs at CZK 950 million. Given the deposit of 25 percent of the price of apartments, the city initially put tens of millions into the cooperative.

The residents will have to pay a quarter of the price of the apartment immediately and will repay the rest as a share of the loan that the cooperative will take out with the bank for the construction.

Applicants for membership will have to have a permanent residence in Prague and will not be able to own other housing. In addition to repaying the loan, the cooperative will also send money to the municipal fund for the development of affordable housing, thus repaying a kind of advance payment for the future purchase of land.

The plan for the support of affordable cooperative housing was approved by the Prague City Council in December 2020. The entire project is intended to support people who do not reach for supported urban rental housing but are also unable to obtain or pay a mortgage.

At the same time, a third of the flats will go to the city, which will use them for rental housing.

Deputy Mayor Petr Hlaváček said that unfortunately, cooperative housing projects cannot become massive construction. The reason is that the city owns very little land. According to him, this has a number of reasons, including, for example, the sale of land by the city in recent decades or poor cooperation with the state, when state companies such as Czech Railways and the like sold land to private investors, not the city. Going forward, we can only hope that private developers also see the value in such living arrangements.