Government explores planning incentives to expand long-term rental housing

The direction was confirmed by government spokesperson Pavlos Marinakis, speaking yesterday (6 October) on the MEGANEWS 104.6 programme “Paratypos,” hosted by journalists Giannis Christakos and Sotiris Bolakis.

Referring to the Build-to-Rent model, Mr. Marinakis said that the primary objective is to increase the number of homes available for rent. At the same time, he left open the possibility of increasing the floor area ratio, provided that any such increase is considered on an area-by-area basis and does not conflict with previous rulings by the courts.

“An increase in the floor area ratio can clearly be considered in areas where such a decision would not conflict with previous court rulings,” he said. He added that the assessment should be carried out separately for each area.

From Subsidies to Supply

The discussion forms part of a broader shift in the government’s housing policy, moving some of the focus from supporting demand towards increasing the supply of housing.

The National Housing Strategy 2026–2035 provides for a combination of measures aimed at developing new housing, repurposing existing buildings, making use of public assets, and mobilising private capital.

Within this framework, granting additional development rights could serve as a financial incentive for developers undertaking the construction of housing intended for long-term rental.

The rationale is that the state would not directly finance the entire investment, but rather create additional value through planning rights. Additional permitted floor area can improve the returns on a project and make residential developments financially viable in cases where current land, construction, and financing costs make it difficult to achieve the required returns.

So far, it has not been clarified whether the incentive would simply be linked to an obligation to offer the properties for long-term rental, or whether a specific proportion of the units would have to be offered under affordable housing terms.

The New Urban Planning Framework

The discussion coincides with the preparation of the new Local and Special Urban Plans, which are redefining land uses, development regulations, and development potential across a large part of the country.

This could prove decisive in determining how a new housing incentive is implemented.

Rather than introducing a nationwide, across-the-board increase in the floor area ratio, the possibility of additional development could be considered within the framework of local urban planning, taking into account population density, infrastructure, environmental considerations, and the housing needs of each area.

This approach has gained greater significance following recent rulings by the Council of State concerning the development bonuses provided for under the New Building Regulation.

The Council of State Constraint

The Plenary Session of the Council of State, in Decisions 146–149/2025, ruled unconstitutional the across-the-board application of certain increases and incentives under the New Building Regulation (NOK) that resulted in additional development without prior assessment of the specific urban planning characteristics of each area.

The ruling led to a revision of the relevant framework, restricting the automatic use of the NOK’s development bonuses.

It does not, however, preclude the establishment of different development parameters where these form part of comprehensive urban planning and are substantiated on an area-specific basis.

This appears to be the point at which the government’s new approach is focused. Mr. Marinakis’s reference to any increase being assessed on an area-by-area basis and subject to the condition that it does not conflict with established case law points towards a targeted rather than across-the-board model of additional development capacity.