Arcona Capital is negotiating with local, Czech and European public institutions to create a new financial structure for the development of 260 affordable homes in Uvaly, just to the east of Prague. It’s a reflection of the severity of the current housing crisis that the government is allocating considerable funds to combat it. But as Arcona Capital’s Guy Barker is finding out, these funds can’t be tapped, until the interests of all the stakeholders are properly aligned. What’s important about the project is that if he does manage to work out a solution with the Ministry of Regional Development and the EBRD, it could serve as a model for private investors to follow.
But the local impact on Uvaly would be equally dramatic. Construction recently began on a badly-needed new school on land Arcona gifted to the city. That gives Uvaly until just 2027 to hire 100 new teachers and support staff, no easy feat in today’s job market. Dangling the keys of a brand-new flat at sub-market rents could go a long way to convincing at least some of the school’s future educators.
It’s still too early to write about the details of the deal Arcona’s Guy Barker is trying to cobble together with the EBRD, the Ministry of Regional Development and the town. But it’s not too early for him to talk about some of the details in public, specifically at the Affordable Housing panel discussion co-organized by ThePrime and Wolf Theiss on Nov. 5. Arcona has already built 160 houses and flats on the 54 ha tract of land it owns on the edge of Uvaly. By transferring some of the land to the city for the construction of the school and access roads, and additional land for the construction of a new arterial road, it’s been able to increase the value of the area while providing cash flow for the overall project.
Barker says the attraction of building rental housing in addition to owner-occupier dwellings is obvious. “When the option of affordable housing came up with the interest of the EBRD to invest in it, we were always going to look at it,” he said. “If we could build for the rental market, it would mean we could build out the whole project quicker. There are lots of arguments why a variety of occupancy types is appropriate for the location anyway.”
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