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Italy, in stimulus move, encourages home expansion

Published 04/01/2009, 08:20 AM
Updated 04/01/2009, 08:24 AM

ROME, April 1 (Reuters) - Prime Minister Silvio Berlusconi presented plans on Wednesday to spur a construction boom by relaxing Italy's strict rules on home expansion, saying it would help lift an economy mired in recession.

The conservative prime minister said his plan could add up to 70 billion euros ($92.51 billion), or up to 6 percent of GDP, to an economy which most analysts expect will contract by about 3 percent this year.

"I want to say that if 10 percent of the residents and homeowners take advantage of this possibility, we'll have an injection of about 60-70 billion euros into the economy," Berlusconi told reporters. "That's 4-5-6 percent of GDP."

Berlusconi said his government would issue a decree on the housing plan within 10 days, with the support of Italy's regional governments. He encouraged homeowners to hire contractors straight away.

"Families who want to expand their space can now call their architects," he said.

The plan would allow homeowners to add additional rooms to single- and dual-family buildings as long as the new space does exceed 20 percent of the cubic volume of the existing structure, or a maximum of 1,000 cubic metres.

In homes that must be demolished and rebuilt, the expansion can rise to up to 35 percent.

The opposition says the measure will benefit relatively few families, since most Italians live in apartment buildings that are not included, and also risks causing environmental damage and ruining historic structures.

Berlusconi said the government was also looking at ways to support construction of low-income housing. (Reporting by Giuseppe Fonte; writing by Phil Stewart; Editing by Toby Chopra)

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