Investor participation in urban development in the context of affordable housing
Abstract: The article focuses on the issue of investor participation in spatial development as a potential partial contribution to addressing the current socio-economic problem of housing unaffordability in the Czech Republic. Rising real estate prices, limited housing supply, and intensive urbanization have resulted in significant social inequalities and increased pressures on public budgets. The concept of investor participation, based on a balanced partnership between the public sector and private developers, aims to equitably distribute the costs associated with public infrastructure necessitated by new construction projects. Methodologically, the paper is grounded in a theoretical literature review, comparative analysis of investor participation methodologies implemented by Czech municipalities, and quantitative analysis of secondary data, particularly focusing on the relationship between housing prices and household incomes. Furthermore, the paper examines specific projects realized according to the Prague methodology of investor participation, highlighting certain shortcomings in the current implementation of this instrument, notably the absence of mandatory affordable housing quotas in developer-led projects. The findings indicate that although investor participation methodologies represent a significant step towards a fairer distribution of costs between investors and public authorities, their current form is insufficiently effective in addressing the long-term challenge of housing unaffordability. Drawing on international experiences, the conclusion recommends implementing obligatory minimum quotas for social or affordable housing units within all larger-scale development projects. Such a policy adjustment could substantially improve housing affordability, consequently alleviating the socio-economic impacts of the ongoing housing crisis.
