Local governments preparing to build affordable housing with state subsidies now have clearer guidance on how much they can charge tenants. The government approved new regulations this week establishing a methodology for calculating what’s known as “cost-based rent”—the ceiling for potential rental prices in subsidized housing projects.

Setting this threshold is essential for the affordable housing support program to function properly. Municipalities across the Czech Republic have prepared hundreds of projects worth approximately 60 billion crowns, and the new framework will help them plan future developments more effectively. “For the first time, there will be a unified, predictable, and professionally grounded procedure for calculating cost-based rent, ensuring a fair relationship between the state, municipalities, investors, and tenants,” said Minister for Regional Development Petr Kulhánek.

The cost-based rent calculation incorporates construction costs, operational expenses, and future major repairs. Operating costs include items like insurance, while major expenses might cover roof replacements or utility infrastructure upgrades. The resulting amount should be lower than typical market rents in the area and will vary based on location, apartment size, and even the risk of vacancy periods.

Construction costs will be spread over twenty years, while major repairs are distributed across the building’s entire lifespan—potentially several decades longer. This temporal distribution is designed to protect households from excessively high rents that municipalities might otherwise calculate.

The affordable housing program targets lower-income families, single parents, and essential workers such as police officers, firefighters, and healthcare professionals, ensuring these groups have access to reasonably priced accommodation in their communities.