17.08.2020
EIB promises Erste Bank 150 million Euros for affordable housing in Austria
- The EU Bank and Erste Bank to provide a total of 300 million Euros for social housing
- The agreement supports the construction of new subsidised or non-profit rental units
- This model has already been used to invest around 200 million Euros in 2,200 affordable housing units over the last 14 months
The European Investment Bank (EIB) has promised the Erste Bank der oesterreichischen Sparkassen AG 150 million Euros in funding to support affordable housing in Austria. The Erste Bank will add a further 150 million Euros to this, which will consequently see it contribute a total of 300 million Euros to social housing over the next three years.
The agreement, which has so far signed off on 100 million Euros and approved a further 50 million, essentially involves granting financing, with interest fixed for up to 28 years, for new subsidised or non-profit rental units, thereby securing rents for nearly three decades. The money is primarily to be used in cities where the demand for affordable housing is particularly high.
Based on this model, framework financing for investments of 200 million Euros was agreed on between the EIB and Erste Bank back in May 2019. After 14 months, almost all this funding has now been allocated. It has been/is being used to build around 2,200 affordable housing units for approx. 3,900 residents, such the ‘Vielschichtig Wohnen’ project conducted by the Österreichisches Volkswohnungswerk housing construction company in Vienna’s 21st municipal district.
The agreement, which has so far signed off on 100 million Euros and approved a further 50 million, essentially involves granting financing, with interest fixed for up to 28 years, for new subsidised or non-profit rental units, thereby securing rents for nearly three decades. The money is primarily to be used in cities where the demand for affordable housing is particularly high.
Based on this model, framework financing for investments of 200 million Euros was agreed on between the EIB and Erste Bank back in May 2019. After 14 months, almost all this funding has now been allocated. It has been/is being used to build around 2,200 affordable housing units for approx. 3,900 residents, such the ‘Vielschichtig Wohnen’ project conducted by the Österreichisches Volkswohnungswerk housing construction company in Vienna’s 21st municipal district.
Vice President Andrew McDowell, responsible for EIB business in Austria, made the following statement upon signing the agreement: ‘The housing market in many European cities is in the midst of a crisis. The costs for lodging often take up a considerable part of people’s incomes. Even in Austria, people trying to secure social housing or other subsidised housing often end up on long waiting lists. Our aim, as the EIB Bank, is to fund affordable housing with high energy-efficiency standards right across Europe. We can only do this by working with experienced, reliable partners. Which is why I am all the more pleased about our second transaction with Erste Bank Österreich in this sector.’
Erste Bank CEO Peter Bosek: ‘A study carried out by Integral from 2019 found that nearly half of all Austrians consider housing to no longer be affordable. Forecasts are equally bleak, with three quarters of Austrians expecting housing to barely be affordable in 2030. Housing
has become a key issue in Austria, and we see it as a social task to make housing affordable again. Many thanks to the EIB for this correct, sensible partnership that will set trends for thousands of families and people.’
The European Investment Bank (EIB) is the European Union’s institution for long-term financing. Its shareholders are the member states of the EU. The EIB grants long-term funding for solid projects that comply with the EU’s objectives.
The ÖVW project at Georg-Schicht-Platz 1, 1210, Vienna, with 281 subsidised housing units and 33.6 million Euros in investment, was also built using EIB funds.