Hellenic Property Federation to PM: Provide incentives for to-rent units

The Hellenic Property Federation sent a letter to Prime Minister Kyriakos Mitsotakis regarding its proposals for creating incentives to increase the supply of rental housing, in view of his upcoming announcement at the Thessaloniki International Fair-TIF of measures on this issue.

In its letter, POMIDA points out that a successful intervention by the State to renovate and offer to tenants, houses for use as a main residence, should include serious incentives to increase incentives for prospective tenants, improving the operating framework of the private sector, and the available housing on the market, essentially helping the energy and functional upgrade of existing houses that have gradually been taken off the market due to the inability of their owners to renovate them. Any other “rental type” measure will take us 50 years back, with the first victim being the tenants themselves, and especially their new generation!

The full letter:

“To the Prime Minister Mr. Kyriakos Mitsotakis

Athens, 24.8.2022

SUBJECT: Incentives for the renovation and offer of houses for use as a main residence.

Honorable Prime Minister,

In view of your announcement at the TIF of measures that will concern residential housing, we consider it useful and timely to bring to your attention the following:

As is well known, in our country the institution of “social housing” is non-existent, which is particularly common throughout northern Europe. Anyone who wants to rent a domicile should turn exclusively to the private sector, which alone and unaided provides the solution to this issue, housing today a huge number of long-time tenants at very low rents and with insignificant increases, as can be seen from the monthly figures of Hellenic Statistical Authority, and which, however, operates under increasingly unfavorable conditions.

Today, while the demand for housing shows an increasing trend, especially for larger housing due to the expansion of telework during the lockdowns, the supply of housing for rent is steadily decreasing every year for the following reasons:

Progressive exit from the residential rental market of unrenovated houses built decades ago, mainly in city centers, when they are abandoned by their old tenants, due to huge material and labor costs required for their functional and upcoming forced energy upgrade, which cost, their owners are unable to cope with. The result is the desolation of these units and the gradual ghettoization of the apartment buildings and the neighborhoods in which these homes are located. The situation will worsen dramatically, especially at the expense of tenants, if the EU plan on the prohibition of renting houses with a low energy class is implemented in a few years.

Total dearth of construction of new houses for the purpose of renting, due to minimization of construction with compensation in kind for land owners, which during the previous decades was the main supplier of the for-rent market.

Complete discouragement of real estate lessors to make units available for residential rental because of the high income tax, up to 45%, which, combined with ENFIA property tax, acquires a literally confiscatory character, and renders this activity pointless. Ultimately this results in selling many of these homes to buyers who will use them mainly for their own residence.”