Housing Plan: here’s how it will affect rents and mortgages. ‘But sustainability is at risk for businesses’

The number of households able to buy or rent a home has risen by 20 per cent. However, without corrective measures, there is a risk that some of the initiatives under the new Housing Plan launched by the Meloni government will not be economically viable, particularly outside the major metropolitan areas. This is the message that Ance is conveying at its general meeting to mark the association’s 80th anniversary, an occasion that also coincides with the end of President Federica Brancaccio’s term of office after four years characterised by the Superbonus, the National Recovery and Resilience Plan (PNRR) and geopolitical crises.

Housing remains the most pressing issue. This is what prompted Prime Minister Meloni to say in a video message sent during the builders’ association’s celebrations at the theatre of the National Etruscan Museum in Villa Giulia – against the backdrop of the splendour of Bartolomeo Ammannati’s Loggia, restored in collaboration with ANCE and ANCE Roma using theArtbonus in ‘a virtuous dialogue between the business world and culture’, as the associations explain – that ‘with the Housing Plan, we have a new tool at our disposal, not only to provide a home at a fair price to those who do not have one, but also to make our communities more liveable and on a human scale’. However, for the head of the builders’ association, this is ‘an emergency response to an emergency’, noting that the measure intervenes ‘without addressing the sector’s structural rules’. Underlying this is the failure to reform urban regeneration, an issue on which the construction sector has been awaiting a regulatory breakthrough for years. “The only major reform has been that of the Public Procurement Code,” is the assessment given by the head of the builders’ association. But let’s look at the estimates. According to simulations carried out by the association, the Housing Plan would make home ownership and renting accessible to around a fifth more households than at present, thanks to the subsidised prices provided for under the third pillar of the government’s programme.

In Milan, the average income required to afford a home would fall from over 76,413 euros a year to just over 50,154, whilst in Rome it would fall from just over 61,000 to around 40,000 euros, and in Bari it would drop from 35,630 euros to 24,980.

This is one side of the coin. There is another side, however, where the social benefits mask a problem of economic sustainability for businesses. ANCE’s simulations show that in integrated construction, if the proportions between the subsidised and market-rate segments are kept strictly fixed, projects prove profitable in the strongest markets, whilst they become difficult to carry out in other parts of the country.

For a typical development comprising 125 flats of 80 square metres, with 70 per cent of the homes at controlled prices and 30 per cent at market rates, the project remains viable in Milan (6.33 per cent return; profit of 14.1 million), but falls to the point of being almost unsustainable in Rome (0.92%; profit of 1.6 million) and in Bari (0.30% return; loss of 16.8 million). The return is weighed down precisely by the rent-controlled pricing, which, with its rigid breakdown of 70 per cent at reduced rents and 30 per cent at market rates, does not guarantee sufficient and reliable returns across the whole territory. For this reason, developers are calling for greater flexibility in the proportion of subsidised housing, tailoring initiatives to the conditions of the various local markets. ‘The share of the free market varies enormously depending on where I’m building, whereas costs remain fairly stable in any part of the country,’ comments Brancaccio. ‘The balance in certain areas could even be 80-20, so even by reducing the proportion of the free market, but in other areas with a 70-30 split, it simply won’t work.’ On the subject of housing, the first pillar, ANCE estimates 1 billion in 2027 to get started immediately, totalling 7.3 billion euros up to 2034, rising to 10 billion “if national and European cohesion policy funds (3.3 billion) are taken into account”, explain the builders. All these funds would be allocated to social housing and the so-called ‘grey zone’ social housing sector.