The company Affordable Housing (Dostupné bydlení ČS), owned by Česká spořitelna together with its subsidiary Stavební spořitelna ČS, plans to start building cheaper rental flats in the next few months. About 250 flats are to be built in two district towns and one Prague district. The key is to cooperate with towns of over 10,000 inhabitants that own the land. "Four to five people out of ten have problems covering the normal cost of housing," said Pavel Kelner, CFO of Dostupné bydlení Česká spořitelna (CS). The bank announced this plan earlier this year, citing inspiration from its parent company in Austria.

Three models will now be tested to see how the future development, in which the bank plans to invest billions, could be realised. In the first case, the city already has the land and the project, in which Affordable Housing CS (Dostupné bydlení ČS) will step in as a co-investor. Some of the apartments will remain with the city and some will be for cheaper rental housing for key professions, for example. The selection of future tenants will belong to the city, with whom the bank will agree. In the second model, the company acts as the developer. "We will buy the land for the project from the city, build the apartments and continue to own them. The city will then occupy the apartments based on our bilateral agreement," Kelner explained. The third case will copy the normal cooperation between the developer and the investor. One builds the flats and the other one buys them for subsequent rental. Affordable Housing CS (Dostupné bydlení ČS) will then make this package of apartments available to the district so that it can arrange to rent them out.

The bank aims to achieve rents that are approximately one-fifth below market price by combining several factors. Thanks to its parent company, Affordable Housing CS (Dostupné bydlení ČS) has access to loan financing for an unusually long period of thirty to fifty years. Other savings are expected to come from lower margins than developers used to have, as well as cheaper standardized modular construction. "We can't subsidise rents directly, but we believe we will be able to progress joint projects with municipalities and take advantage of lower-cost municipal land. Such projects are typical in Vienna, where the city provides land at a discounted price on the condition that affordable rental apartments are created, some of which are subsequently rented out," explained Česká spořitelna CEO Tomáš Salomon. The provision of land is also part of a new model of Affordable Cooperative Housing (Dostupné družstevní bydlení) that the capital wants to test.