Interior minister denies housing project in Limassol is in jeopardy (Updated)

Interior Minister Constantinos Ioannou has denied reports that a project aimed at providing housing for 600 low-income families in the Limassol areas of Ayios Nikolaos and Ayios Ioannis is now hanging in the balance.

According to Phileleftheros, the government has informed the Limassol municipality that funds are missing to see the project completed, regardless of the fact that it reached its final stages.

The ambitious housing project includes the construction of 138 apartments. The Limassol municipality has already relocated nine families to the complex. However, the report said the current occupied apartments are in makeshift conditions.

Ioannou, however, clarified that the project is moving forward. Furthermore, he confirmed what President Nikos Christodoulides said earlier on Thursday, namely that at the end of September the government will announce a specific plan for housing policy.

Speaking before the House interior committee, Ioannou admitted the project underwent some liquidity issues. However, he confirmed that by no means it will be halted.

“There is no ‘red flag’ from the government,” he said. “On the contrary, the housing project is moving forward. We simply asked the Cyprus Land Development Corporation (KOAG) for a detailed plan before proceeding with the works.”

When asked to comment on statements by Disy MP Nikos Sykas, who claimed that the government lacked the necessary funds of €5 million per year for four years to support “the largest social project in Cyprus,” Ioannou said that such claims are unfounded and based on incorrect reports.

He was referring to the article published on Philenews detailing a possible reluctance from the government to provide annual funding for the project, which, in turn, has cast doubt on the feasibility of the housing complex.

The report also outlined the difficulties faced by the Limassol municipality, as it would be burdened with an additional tax of approximately €2 million for the first phase of the project, including capital gains tax and VAT. In addition to that, the project is not-for-profit, as it was approved as a social initiative by the local authority.

The housing project was approved in 2019 by the Limassol mayor Nicos Nicolaides and was introduced as a response to the severe housing crisis.

In 2019, the Limassol municipal council approved Nicolaides’ proposal to utilise three pieces of municipal land in town, totalling 31,081 square metres and valued at over €20 million, for the construction of residential units for low-income families.

A year later, in July 2020, the Limassol municipality signed a preliminary agreement between and the Cyprus Land Development Corporation (KOAG), under the chairmanship of the then-government spokesman, Marios Pelekanos.

In December 2021, the project was extended to include the construction of a further 600 affordable housing units to address the high rents in Limassol. At the time, it was hailed as a historic agreement, as it represented the largest social housing project in Cyprus, involving direct or indirect participation from government authorities.

According to the agreement, the Limassol municipality would transfer the municipal land plots to KOAG in exchange for the gradual development of the affordable housing infrastructure financed by KOAG. Subsequently, the affordable housing units would be provided to eligible households through transparent processes and based on specific income criteria. The total cost of the entire project exceeds €100 million.

The collaboration between the municipality and KOAG takes the form of an exchange agreement, and the project will be constructed in three phases.

The first phase envisions the construction of six apartment buildings, with four on one of the two Ayios Nikolaos plots and two on part of the Ayios Ioannis plot. The successful completion of the project would alleviate the housing difficulties faced by vulnerable families in Limassol.

As mentioned by Ioannou, Christodoulides also commented on the housing project’s ongoing issues from the naval base in Mari during the ‘Eunomia 4-2023’.

“I haven’t been made aware of the specific issues concerning the project, but what I can say is that at the end of September the interior ministry will announce a specific plan for housing policy,” he said.

Christodoulides added that housing issues “concern everyone greatly, not just in Limassol, but in the whole of Cyprus.”

“We want to address the house issue with a detail plan and with incentives scheme, for which we have been working hard since I took office,” he concluded.