Published on and written by Cyril Jarnias
In the Czech Republic, cities have become veritable battlegrounds—political, economic, and climatic. Behind the cranes and construction site hoardings, something deeper is at play than a mere real estate cycle: an attempt to reinvent the ways of living, moving, and producing the city in a country where housing prices are soaring faster than wages, where the industrial legacy has left thousands of hectares of brownfields, and where heatwaves and droughts are multiplying.
The country is reshaping its urban landscape through large-scale projects in Prague, national affordable housing programs, the massive regeneration of industrial brownfields, and the rollout of rapid transit and “smart city” solutions. This evolution makes the Czech Republic a genuine open-air laboratory.
A Housing Crisis Forcing the State to Shift Gears
The backdrop is stark: about 270,000 people are considered to lack decent, affordable housing. Czech households spend a larger share of their income on housing than the OECD average, and property prices have risen faster than incomes, especially in major cities. In a country where about 75% of the population are homeowners, the subsidized rental market accounts for only 1.4% of households.
The Czech Republic ranks only 23rd in the EU for housing availability and quality, according to a prosperity and financial health index. Meanwhile, construction activity remains below its pre-2009 levels, while large swathes of the urban housing stock are aging and energy-intensive.
In this context, the government has finally put together a genuine arsenal to revive construction and, above all, make rents affordable.
A Highly Aggressive National Affordable Housing Program
The pivot of this strategy is the National Affordable Housing Program, managed notably by the Support Fund for Investment (SFPI). The financial volumes represent a step change in scale.
| Program component | Announced amount | Type of financing |
|---|---|---|
| SFPI Program until 2026 | 7 bn CZK | Grants |
| Preferential loans (1st phase) | 8 bn CZK | Subsidized loans |
| National Development Bank intervention | 3.5 bn CZK | Co‑financing |
| Total expected housing investment | 20 bn CZK | Apartment construction |
The scheme combines grants (up to 40% of project costs) and low-interest loans (up to 65% of costs). Together they can cover up to 90% of the investment, with maturities of up to 30 years and no early repayment fees. This secures operations that neither municipalities nor private operators could have undertaken alone.
By the end of 2024, the SFPI was processing 44 funding applications for affordable rental housing.
Mobilized Public Land and a Redesigned Legislative Framework
To bypass land shortages, the state has identified about 200 plots that can be made available free of charge to municipalities, on condition that they build affordable rental housing on them. A decisive move in a country where the legacy of 1990s privatizations left many municipalities without land reserves.
A draft law defines affordable rent as a maximum of 90% of market rate. A future Housing Support Act will create a framework for systemic aid, and the Ministry of Finance has launched a territorial rent map to standardize practices and calibrate ceilings.
For young households, the executive is considering public mortgage guarantees to loosen the lock on homeownership.
Finally, the state relies on advice from the European Investment Bank (EIB), via the InvestEU Advisory Hub, to structure its housing policy and build a robust national affordable housing framework.
Prague, a Laboratory for Subsidized Affordable Housing
With 1.35 million inhabitants—about 13% of the country’s population—the capital concentrates all the tensions: land scarcity, exploding prices, economic attractiveness. It is here that an unprecedented project was launched with the EIB and the bank Česká spořitelna.
A First “Pipeline” of Over 700 Homes for Essential Workers
The EIB and Česká spořitelna have set up the first large-scale Czech affordable housing project, structured as a national pilot. It plans the construction of over 700 new apartments across four sites in Prague. The estimated cost is 187.5 million euros, with up to 60 million euros in EIB loans, the remainder to be covered by the specialized subsidiary DBČS (Dostupné bydlení České spořitelny).
These homes are prioritized for public sector workers deemed essential to the city’s functioning, such as nurses, teachers, police officers, and administrative staff. The apartments are to be handed over to tenants progressively from 2025 into early 2026.
The ambition is twofold: securing the presence of these professions in the capital by partially shielding them from real estate pressure, and testing a reproducible model for the entire country, similar to an EIB-supported scheme in Austria.
The Prosek Example: Rents 20% Below Market
In Prague’s Prosek district, Česká spořitelna partnered with developer Finep to build 254 homes specifically reserved for staff of university hospitals, law enforcement, and education personnel. Rents will be about one-fifth lower than market prices, with some apartments advertised around 10,000 crowns per month.
This type of project is part of a pipeline estimated at around 700 affordable homes under development. Volumes that are still modest relative to needs, but significant in a country that had virtually no institutional model for subsidized rental housing.
BTR Consulting, consultancy firm
Strong Requirements for Energy Performance
These new complexes aim not only at being “social”: they are also designed as environmental showcases. The buildings must achieve top energy performance classes (PENB A or B), integrate green roofs, advanced water management systems, and energy-efficient technologies.
This choice aligns with the EIB’s strategy, which has committed to supporting 1 trillion euros in climate and environmental investments by 2030, and with the Czech “New Green Savings” program (Nová zelená úsporám), which funds energy renovations and efficient new buildings until 2030.
Regenerating Brownfields: The Other Front of the Transformation
Beyond housing, a significant part of the urban revolution underway in the Czech Republic involves the transformation of brownfields—disused, often polluted land and built sites, legacies of an industrial, military, or agricultural past.
These sites are often located in highly attractive locations, well-connected to transport and networks. Their recycling appears as a central lever for densifying cities without encroaching on agricultural land and for addressing climate challenges.
A National Strategy Dedicated to Brownfields
The National Brownfield Regeneration Strategy (NBRS) aims to create an environment conducive to the rapid launch of conversion projects and to prevent the emergence of new abandoned sites. It combines economic, environmental, social, and heritage objectives.
The Ministry of Industry and Trade coordinates this strategy, while CzechInvest plays the role of operational conductor: managing the National Brownfield Database, supporting project developers, and assisting in finding funding.
| Brownfield indicator | Value |
|---|---|
| Sites identified by CzechInvest (latest data) | 4,377 |
| Total area | 13,351 ha |
| Sites registered in the national database | ~3,500 |
| Sites published on brownfieldy.cz | > 450 |
| Number of sites in Prague | 18 |
| Average area of Prague sites | 4.7 ha |
The first major mapping studies were conducted as early as the beginning of the 2000s, funded by the PHARE program. They allowed for the mapping of over 2,300 sites and the structuring of a public policy now consolidated in the NBRS 2024.
Grants and New Momentum via the Recovery Plan
Since 2017, the Ministry of Industry and Trade has been distributing grants for brownfield conversion projects for economic use. A specific program, “Brownfield Regeneration for Business Use,” supported by the National Recovery Plan, saw record success in its latest call: 35 projects selected, four times more than in previous waves, for a budget of 200 million crowns and an overall planned envelope of 500 million crowns.
Aid can reach up to 40 million CZK per project for construction, subject to financing and deadline conditions.
An important feature: the new program now also allows non-exclusively economic projects, such as mixed-use buildings combining commercial space, a municipal library, or housing. All regions are eligible, including Prague, whereas previous aid mainly targeted disadvantaged areas (Moravia-Silesia, Ústí, Karlovy Vary, etc.).
The most frequent uses are the creation of offices for local artisans and entrepreneurs, services, restaurants, community halls, or municipal housing. Most projects favor heavy renovation, but about one-third combine demolition and new, highly energy-efficient construction.
Massive Developer Interest, But Significant Obstacles
A 2024 study by CEEC Research among property developers shows that 94% of them want to use brownfields for their future projects. They highlight three advantages: reuse of already built-up land (68%), improvement of the site’s ecological quality (19%), and increase in neighborhood value (10%).
The average additional cost to build on a brownfield compared to a greenfield site, according to the article.
Potential Analyzed Region by Region
A recent academic study, published in 2025, applied a Multi-Criteria Decision Analysis (MCDA) method to measure the regeneration potential of all Czech regions (NUTS 3). Criteria included: ownership structure, past uses, site area, and accessibility to infrastructure.
The regions of Ústí nad Labem (score 0.75), Moravia‑Silesia (0.58), and Liberec (0.54) appear most ready for massive conversions. Conversely, South Bohemia, Zlín, and South Moravia show lower potential. The density of brownfields, their former use, and the share of public ownership stand out as the factors most correlated with transformation capacity. The capital Prague is excluded from the final comparison due to too few sites in the national database.
Smíchov City: The Showcase of the New City on Brownfield
Symbolizing this conversion policy, the Smíchov City project in Prague 5 is presented as the largest unified urban project in the country’s modern history. It is located on the former Smíchov freight railway station, a site of nearly 20 hectares.
A major urban project in four phases, developed by the Sekyra Group, mixing housing, offices, retail, and public facilities around a major pedestrian axis and green spaces.
Nearly 400,000 m² of built-up area and over 21,000 m² of green spaces, including two large parks of 1.4 hectares each.
A central pedestrian axis one kilometer long and 28 meters wide, named in honor of Madeleine Albright.
Creation of over 21,000 m² of green spaces, with a park-amphitheater designed as a “Prague Hyde Park.”
The project integrates housing, offices, retail, and public facilities.
| Smíchov City – Key Figures | Value |
|---|---|
| Site area | ~20 ha |
| Total built-up area | ~400,000 m² |
| Green spaces | > 21,000 m² |
| Target population (residents + jobs) | 12,000 people |
| Private investment | 35 bn CZK (~1.38 bn €) |
| Associated public investments | 15 bn CZK (~0.59 bn €) |
| Total investment | 50 bn CZK (~1.97 bn €) |
| Expected completion | 2032 |
The buildings aim for ambitious standards: BREEAM certification, minimum energy class B, partial supply by geothermal and photovoltaic panels, rainwater reuse, and sometimes greywater recycling. The project was reviewed by UNESCO, which concluded it did not harm the World Heritage status of Prague’s historic center.
The first phase, primarily residential, comprises about 400 homes and a first office building “Na Knížecí,” for an investment of around 3 billion CZK. The second phase notably includes the future headquarters of Česká spořitelna, a 75,000 m² campus for 3,500 employees, designed to be carbon-neutral (heat pumps, solar). Later phases will deliver nearly 800 additional homes and a new district around the current Radlická Kulturní Sportovna cultural center.
Adjacent to Smíchov City, the Smíchov Terminal is under construction: an intermodal hub set to become the country’s first major integrated station, connecting 11 modes of transport, with a capacity of 250,000 daily users. The city and the railway administration will invest about 13.5 billion crowns, partly for a 1,000-space parking garage topped by a bus station.
Smíchov City illustrates the direction taken by the capital: recycling large railway sites, densifying by creating mixed-use districts, highly connected to rail, and betting on energy performance.
Development Plans and Construction Law in Full Flux
This flurry of projects fits within a deeply overhauled planning framework. The Czech Republic has adopted a new Building Code (Act No. 283/2021), fully applicable since 2024, which replaces the former 2006 law. It notably introduces a unified permitting procedure, substituting an integrated system for the old two-step process.
Regional authorities and administrative courts now have jurisdiction to settle disputes related to urban planning agreements, which municipalities can now impose via their zoning plans, with binding deadlines for their signing.
Spatial planning operates on several hierarchical levels: the National Spatial Development Policy, regional development plans, local plans, and regulatory plans. For any legally binding document, public participation is mandatory. This process relies on analytical documents that serve as a basis for decision-making and are particularly valuable for the elaboration of major urban projects.
On the environmental side, the Environmental Act, the Environmental Impact Assessment (EIA) Act, and the Energy Performance of Buildings Act closely regulate urban projects. Any new building or one undergoing major renovation must have a valid energy performance certificate for 10 years. The Building Code now requires proof of energy compliance at the construction stage, not just at the permit stage.
Rapid Transit: High-Speed Rail and New Stations as Urban Engines
Urban transformation is not limited to real estate. The state is preparing a shock wave of investments in rail and public transport, largely backed by European funding and public‑private partnership (PPP) structures.
Towards a 700 km High-Speed Line Network
The Czech Republic plans a network of about 700 km of high‑speed lines (up to 320–350 km/h), for a total investment exceeding 40 billion euros over about twenty years. These new infrastructures are meant to bring Prague closer to Brno, Ostrava, Vienna, or Dresden, while freeing up capacity on existing lines for regional trains.
The Moravian Corridor between Brno and Ostrava represents an investment of 7 billion euros.
In parallel, the EIB is lending 466 million euros to modernize key lines and deploy the European ERTMS signaling system on over 600 km of tracks, as part of an already approved package of about 2 billion euros.
PRAK: Connecting the Airport to the Dense City
The PRAK project aims to link the Prague‑Veleslavín metro station to Václav Havel Airport with a new rail section including an underground station. The PPP perimeter covers about 14 km of infrastructure to be designed, built, financed, operated, and maintained at an estimated cost of 1.1 billion euros. The pre‑qualification procedure is underway, with a competitive dialogue expected in 2025.
Beyond airport access, this type of project catalyzes the restructuring of peripheral urban fabrics, densification around stations, and favors the extension of tram and electric bus networks.
New Stations, New Neighborhoods
The modernization of major stations is almost systematically paired with urban projects. In Prague, the redefinition of Smíchov station as an intermodal terminal directly accompanies the creation of the Smíchov City neighborhood. Masaryk station is being redeveloped to better open onto the city, with a new platform above the tracks, linked to a vast office and retail project originally designed by Zaha Hadid Architects.
Elsewhere in the country, the upgrade of stations in former coal regions benefits from a specific component: eight stations have been selected for grants from the Public Sector Loan Facility (PSLF), one of the instruments of the European Just Transition Mechanism, to support a just transition in territories most marked by industrial decline.
Roads, Bridges, and Ring Roads: Urbanization Under Mobility Constraints
The Czech Republic is not betting solely on rail. The highway network is set to expand from about 1,500 km to 2,000 km by 2033, via a series of projects, several of which are PPPs (D4, D35, D3, D55). The first, the D4, worth 440 million euros, is already completed and in operation.
The amount in billions of crowns invested in section 511 of Prague’s outer ring road, scheduled for delivery in 2027.
Inside the city, new structures are altering daily geography. The Dvorecký Bridge, exclusively for public transport, cyclists, and pedestrians, is set to open in early 2026 for about 1.5 billion CZK, featuring a climbing wall, skatepark, and small amphitheater at its base. The complete reconstruction of the Libeň Bridge, for 2.2 billion CZK, is to be completed in 2025, while the Barrandov Bridge has just finished a heavy renovation costing 0.75 billion.
These road and multimodal infrastructures reconfigure flows, free up routes for trams, and serve as a pretext for public space upgrades like Wenceslas Square or Jiřího z Poděbrad Square.
Climate Adaptation Integrated into Urban Projects
The other major backdrop to these transformations is climate disruption. The country has seen its average temperature rise by about 0.3 °C per decade, with an additional increase of 1 °C expected by 2030. Prague, whose center now exceeds 10 °C annual average, has gained 1.3 °C between 1911‑1960 and 1961‑2010.
Projections forecast an explosion of “tropical days” above 30 °C and tropical nights above 20 °C, particularly in dense neighborhoods, where the urban heat island shows an average intensity of 1.6 °C. Total annual rainfall is expected to remain stable, but with wetter winters, drier summers, and a marked increase in rainless periods, hence droughts. Intense thunderstorms and extreme events (tornadoes, storms) are expected to multiply.
A National Strategy and an Action Plan
As early as 2015, the Czech Republic adopted a National Climate Change Adaptation Strategy, aligned with the European strategy. This document assesses the likely impacts of climate on health, forests, agriculture, water, cities, biodiversity, tourism, transport, and energy, and proposes adaptation actions. An updated version details objectives for 2030, with a vision to 2050.
A National Adaptation Action Plan then translated these guidelines into concrete measures.
Prague: From Strategy to Very Concrete Projects
The capital adopted its own Adaptation Strategy in 2017, with the stated aim of reducing the city’s vulnerability and improving residents’ quality of life by combining nature-based solutions, technological measures, and “soft” actions (information, warning systems, education).
A first implementation plan for 2018‑2019 included 47 measures divided into five main themes (open landscape, built fabric, building adaptation, risk management, communication). A second plan for 2020‑2024 deepened this logic with pilot projects in Prague 6 district.
The city also participates in European projects like UrbanAdapt or UNaLAb, focused on green and blue infrastructures, and has signed the Mayors Adapt initiative, making it a nodal point for climate transition in Central Europe.
Nature in the City, Stormwater, and Sustainable Mobility
Concretely, adaptation involves tree planting, creating parks and stormwater basins, riverbank renaturation, or installing green roofs and water retention systems. Pilot projects like the Dívčí Hrady park, the Soutok (Confluence) suburban park, the anti‑flood measures in Lipence or Čakovice, or the Maniny floodplain illustrate this approach.
Extrametropolitan initiatives illustrate this approach, notably the cross-border program **LIFE for MIRES**, which works on the hydraulic restoration of peatlands in the Šumava and Bavarian Forest ranges. Meanwhile, the forest adaptation strategy developed by Mendel University near Brno is another concrete example.
In cities, nature is mobilized as a solution to cool the air, retain water, filter pollutants, and provide recreational spaces. Where these solutions are not possible, technological measures take over (efficient collective air conditioning systems, innovative coatings, underground basins, sensors, and alerts).
Sustainable mobility plans – notably that of Prague and its surroundings – complete the picture, by reducing car space, strengthening public transport, and encouraging cycling, with over 2,300 km of cycle paths already partly funded by European funds.
Smart Cities: Data, Sensors, and Citizen Participation
The other major transformation of Czech cities is digital. Under the “smart city” label, several metropolitan areas have undertaken to equip themselves with data platforms, sensors, traffic management systems, or digital services for residents.
Smart Prague 2030: A Six-Pillar Roadmap
Launched in 2016, the Smart Prague initiative is based on a 2030 strategy articulated around six themes: future mobility, smart buildings and energy, waste-free city, attractive tourism, inhabitants and urban environment, and data space.
Implementation is entrusted to the municipal enterprise Operátor ICT (OICT), which also manages the PID Lítačka transport card. About 600 million crowns have already been earmarked for smart projects.
The Golemio data platform centralizes urban information (transport, energy, environment, services) for municipal services, researchers, and sometimes the public. The My Prague mobile app, meanwhile, directly informs residents about services, parks, cultural events, health, parking, and recycling centers.
Prague is also developing a 3D digital twin to simulate the impact of new projects on traffic, networks, microclimates, or the perception of public spaces. A participatory planning platform allows citizens to visualize proposed transformations in their neighborhood and provide feedback.
Smart Mobility and Connected Urban Services
One of the showcases of the smart approach remains traffic management. An intelligent management center using artificial intelligence to control traffic lights, analyze flows, or prioritize public transport has reduced average travel times by about 15% since 2025.
So-called “intelligent” public transport stops offer Wi‑Fi, charging points, screens showing wait times, and sometimes environmental sensors. A waste collection system based on sensors in containers has reduced truck trips in the city center by 30%.
Number of electric vehicle charging points integrated into streetlights installed between 2021 and 2022.
Brno and Others: Diffusion of the Smart Model
In Brno, a geospatial data platform aggregates information from various municipal services. The city uses AI to adjust tram and bus schedules in real time, anticipates floods with a 6-hour forecasting system, and also uses sensors to optimize waste collection.
The URBIS Smart City Fair, held annually in Brno, has become a major event for smart city stakeholders in Central Europe, linked with major international events in Barcelona and Stavanger.
At the national level, the SMART Czechia strategy, developed by the Ministry of Regional Development, seeks to disseminate these best practices to medium and small municipalities, around three pillars: population and communities, local economy, living environment. The challenge is also to find robust financing models for these digital solutions, which can be costly in the long term.
Large-Scale European Funding
Behind the proliferation of construction sites, a key financial element emerges: the country’s ability to mobilize European funds. For the 2021‑2027 period, the Czech Republic negotiated 42.6 billion euros, of which over 21 billion under cohesion policy. The major items are as follows:
| Funding source | Amount allocated |
|---|---|
| European Regional Development Fund (ERDF) | 10.3 bn € |
| Cohesion Fund | 6.6 bn € |
| European Social Fund+ | 4.5 bn € |
| Just Transition Fund | 1.6 bn € |
| Recovery and Resilience Facility (grants) | ~177 bn CZK |
| Recovery and Resilience Facility (potential loans) | > 400 bn CZK |
| Modernisation Fund (energy, clean mobility) | ~150 bn CZK |
The IROP (Integrated Regional Operational Program), Environment, Just Transition, Transport, Technology and Applications for Competitiveness, or Employment+ programs directly fund urban projects, whether for cycle paths, trams, renovation of schools and public buildings, brownfield decontamination, energy efficiency, or clean mobility.
Total amount of grants obtained by three Czech municipalities under the Public Sector Loan Facility for just transition projects.
Urbanization Under Strong Tensions, But in Transition
Underlying all these projects remains a structural difficulty: the lack of synergy between different levels of the state, municipalities, and market actors. Many municipalities want to expand their housing stock – about three‑quarters of them declare this intention – but face land scarcity, lengthy procedures, and limited technical capacities.
National authorities are well aware of these weaknesses: an OECD report on optimizing public investment recommends strengthening strategic planning, project evaluation, and the skills of local authorities. The new legislative frameworks, grant programs, and support from European institutions aim precisely to fill these gaps.
The Czech Republic is banking on the development of denser, connected, green, and affordable cities as a lever for the future, despite tensions between flagship projects in Prague, national housing needs, climate constraints, local resistance, and budgetary trade-offs.
It remains to be seen whether, behind the investment figures and architectural renderings, the most vulnerable residents, public sector workers, young households, or inhabitants of transition regions will manage to find in these new neighborhoods and new transport lines something more than a horizon of glass and concrete: a genuine right to the city.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
