Housing plan, challenge on figures for subsidised housing

Ambitious and to be defined above all in its most operational aspects. For the government's Housing Plan, hearings begin today in the House committee, for the process of conversion into law. Among thethree pillars of the decree - which came into force on 8 May - the most challenging is probably the third, the one dedicated to integrated residential construction, designed to offer affordable solutions to those who are not part of public housing but can no longer afford the costs of the free market. The objective is to attract private capital that can allocate no less than 70% of the investment to subsidised housing for rent or sale, with prices and rents 33% lower than market values. In these cases, operations will be able to benefit from simplified procedures, including the Scia for renovations and demolitions, volume extensions, accelerated services conferences and facilitated changes of use. The most significant, however, will be related to private investments with foreign capital exceeding one billion euro. Among the operators, the announcement of the Plan has been welcomed and they are now at the window to understand how it will be implemented and engaged.

Pending the official perimeter of intervention, there is no doubt that the success of this part of the Plan will depend on the economic sustainability that will be guaranteed to the operations. For this reason, the central points of the final structure, which this part of the decree will assume, will probably revolve around the sustainability of the 70% quota of subsidised housing, the annexed incentives, and the thresholds for investment by foreign capital. "The simplifications envisaged by the measure make it possible to increase the economic sustainability of projects and give certainty to timescales," explains Gabriele Bonfiglioli, chief investment officer of Coima. "However," he continues, "the measures only apply to large operations with more than one billion in foreign capital. The perimeter should also be extended to smaller operations, to Italian capital, and to projects that are not only new. Some of those already partially started would need a greater convergence of resources. This would generate a multiplier effect'.

As for the 70 per cent threshold, according to Bonfiglioli, 'much will depend on the area of intervention. Inlarge cities it could be sustainable, especially if the quota allocated will be considered additional area to the ordinary area of intervention as envisaged by the measure. In other areas, additional incentives might be needed'. The sustainability of the business plans of the agreements will indeed be essential. "An approach such as the one proposed," adds Luca Dondi, managing director of Patrigest (Gabetti Group), "if not associated with forfeit subsidies, zero-cost areas, and relief on charges, risks being scarcely sustainable even in a market as generous in terms of returns as Milan's.

In the absence of favourable extraordinary conditions, in large urban areas where returns are more certain, according to Dondi, it would be difficult to go beyond the 30-35% threshold of subsidised housing. Alessandro Maggioni, president of the Consorzio Cooperative Lavoratori, agrees on the subject, according to whom it will also be important to understand the details of the division (of the 70% quota) between rent and sale. "If we are talking about an operation consisting, for example, of 40% sales at EUR 3,300 per square metre and 30% for rent, the budget can be sustainable. Of course, it also depends a great deal on the availability of public areas and possible reclamation costs,' Maggioni explains. 'In cities like Milan, Rome or Bologna,' he continues, 'the sustainable rent for the categories of workers targeted by this measure cannot exceed 100-110 euro per square metre per year.

At the national level there is no single quota for subsidised housing. The percentage varies depending on the municipality, urban planning agreements and the type of intervention. In general, in large urban regeneration projects, the share is between 20% and 40% of the residential area. In Milan, the Piano di Governo del Territorio (Pgt) provides in some cases for at least 20 per cent for subsidized housing. In large recent urban developments, such as the Scalo Farini, the quota of social housing has been raised to 43% of the entire residential surface area planned between sale and rent. In Cascina Merlata, the UpTown neighbourhood developed by Near (the group created by the merger of Redo Sgr and EuroMilano) is characterised by a broad mix, with more than 4,500 flats, 50% of which are subsidized (with prices around EUR 3,200 per square metre) and assisted. According to Near's management, "the 70/30 ratio is achievable and economically sustainable provided that certain enabling factors are guaranteed. We will have to wait for the contents of the conversion law, but considering that the cost of construction currently exceeds 2,000 euro per square metre, the objective will become attainable if guarantees, simplifications, certainty regarding timeframes, availability of areas and buildings, or other forms of de-risking are set".