Enterprise zones could help ease housing pressure in Cyprus, but cannot on their own constitute housing policy, a Cyprus Forum panel heard, with speakers stressing that any such scheme would need to be tied from the outset to jobs, infrastructure, affordable homes and clear planning rules.
The discussion, titled Housing beyond Demand Subsidies: Can Enterprise Zones Rebalance Cyprus?, brought together government and private-sector representatives to examine whether shifting investment and employment away from the main urban centres could help rebalance both development and housing demand.
The panel was chaired by Nicoletta Kouroushi, journalist and International Relations Analyst, and architect and researcher Andreas Papallas, with Nea Dynami as knowledge partner.
Closing the discussion, Papallas said the central conclusion was that enterprise zones could only form one part of a much broader housing and regional development strategy.
“Enterprise zones on their own cannot constitute housing policy,” he said, arguing that their success would depend on whether they were connected from the beginning to housing needs, infrastructure, mobility, land values and clear commitments over who ultimately benefits from development.
Pitros calls for concentrated incentives
Dr Charalambos Pitros, chief executive of Zyprus Real Estate, argued that enterprise zones could act as a catalyst for housing if incentives were sufficiently strong and concentrated rather than spread too thinly.
He proposed a mix of tax incentives, planning bonuses and targeted grants, drawing on examples from other European countries.
Pitros argued that the state should focus resources on a small number of zones rather than dispersing funding across a large number of communities.
“It is better to create two or three zones and provide strong incentives so that they actually have an impact,” he said.
He also advocated greater use of state land through forms of social land-for-development arrangements, under which private developers would receive development rights and return a share of the resulting homes to the state.
Pitros linked the proposal to the wider decline of rural communities, warning that depopulation had been under way for decades.
“The question is not whether enterprise zones will help. There is no other solution,” he said, arguing that reviving rural areas could also relieve pressure on the main cities.
Interior Ministry: Housing must be built into planning from the start
Patrina Taramidou, Director of the Housing Policy, European Affairs and Administration Directorate at the Ministry of Interior, said Cyprus’s housing strategy was designed to address both access to housing and the supply of new homes.
She pointed to existing schemes supporting mountain, rural and disadvantaged areas, assistance for young people, affordable-rent programmes and planning incentives intended to increase housing stock.
Taramidou argued, however, that affordable housing would have to be incorporated into the design of any future enterprise-zone policy rather than treated as an afterthought.
“The housing factor must be taken into account from the beginning of the overall planning,” she said, adding that affordable housing should be developed in cooperation between the public and private sectors.
The state, she said, also had a role in intervening directly where the market failed to provide homes in areas of genuine need.
She referred to plans involving state-owned land and around 500 housing units in Cyprus’s four largest cities as an example of direct state intervention.
Chrysochos: Jobs and demand must come first
George Chrysochos, Executive Director of Cyfield Group, warned against assuming that housing development would automatically follow the designation of an enterprise zone.
He drew a distinction between social housing and affordable housing for working and middle-income households, saying developers were largely driven by actual demand rather than incentives alone.
“If there are companies that come and bring thousands of people to work in an area, the construction sector will follow,” he said.
For Chrysochos, the priority should therefore be to attract anchor companies and create jobs first, with housing supply then responding to the demand that follows.
He also argued later in the discussion that simply increasing supply would not necessarily solve affordability if construction and land costs remained high.
In Limassol in particular, he said, land prices had become a major constraint and called for consideration of restrictions on purchases of very large plots by third-country buyers.
Hadjipanayiotou: Existing schemes must first be made to work
Michalis Hadjipanayiotou, chief executive of Cybarco Development Ltd, took a more cautious approach to the creation of new enterprise zones.
He said Cyprus should first assess whether existing housing incentives were functioning effectively before adding another scheme.
Hadjipanayiotou pointed to planning incentives and targets for processing applications which, he argued, were not always working in practice.
“The first thing we have to do is see how the existing schemes can work,” he said.
He argued that incentives had to be clear, predictable and implemented within defined timeframes, and called for a central body to coordinate procedures so investors were not sent from one authority to another.
Infrastructure, he stressed, was also essential.
“If you do not build the infrastructure, nobody will go there. We will simply create another problem,” Hadjipanayiotou said.
Pilides warns against ‘build it and they will come’
Natasa Pilides, General Manager of eWise Cyprus Ltd, also cautioned against treating enterprise zones as a stand-alone solution to the housing crisis.
“The idea of ‘build it and they will come’ has become somewhat outdated,” she said, arguing that enterprise zones should be designed around clearly identified business and labour-market needs.
Pilides said attracting new investment could itself create additional pressure on schools, housing and infrastructure if new workers arrived without sufficient planning.
She stressed that incentives were not necessarily limited to taxation and could also include measures to attract workers with the skills businesses needed.
Pilides also highlighted the constraints imposed by EU state-aid rules, warning that generous tax or financial incentives for enterprise zones would need to comply with European Union requirements.
Businesses could make commitments in return for public support, she said, including maintaining employment or providing transport for workers, but such measures would only succeed if locations were genuinely accessible and suitable for employees.
“Planning must always start from the needs,” she said.
Infrastructure emerges as common denominator
Despite differing views over how extensive enterprise zones should be and where they should be located, speakers repeatedly returned to infrastructure as a condition for success.
Roads and transport links were only part of the equation, Pilides said, with schools, energy systems, services and wider community needs also requiring consideration.
Taramidou similarly said that a zone should not simply be declared and left to develop, but should provide the conditions necessary for workers to live “with dignity” close to their place of employment.
The panel ultimately concluded that the housing debate could not be reduced to building more homes or offering additional subsidies.
“The objective is not simply to create more development or more housing,” Papallas said in closing, “but to design mechanisms and a clear framework that connect economic development with genuinely affordable housing and more balanced spatial development across the country.”
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