How the Shelter Act will affect the new housing market Poland

by   CIJ News iDesk III
2024-09-04   10:54
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What impact will the Civil Protection and Civil Defence Act have on the housing market, which stipulates that underground floors in new multi-family buildings and garages are to be designed to accommodate emergency shelter spaces? Will the new regulations, which are due to take effect from 2026, increase construction costs in new projects? By how much? Will this translate into housing prices?

Tomasz Kaleta, managing director of sales and marketing at Develia:
In my opinion, the entry into force of the provisions of the Civil Protection and Civil Defence Act will have a significant impact on the real estate market. These regulations pose challenges, not only for the development industry, but also for the construction industry. Additional investment will certainly be needed due to, among other things, the need for structural reinforcements. In the case of new buildings, the announced regulations may result in a reduction in the area that could be used for parking spaces or storage rooms. It can be expected that both the design and construction times will increase, as well as the costs of these processes. As a result, the new regulations may lead to an increase in housing prices, which will ultimately burden buyers.

Mateusz Bromboszcz, vice-president of Atal:
The property development industry assesses the draft in its current form - and especially its introductory provisions - unequivocally negatively. There is far too little time to implement the solutions. Particularly as the provisions are unclear in the form presented and raise many interpretative doubts.

The proposed changes will certainly have an impact on higher housing prices, as the technological solutions will be considerably more expensive than those used today. The first estimates relating to the increased costs of performing additional works and construction works in relation to garages, which will not be shelters (more requirements), but only places of temporary shelter (fewer requirements), speak of additional costs in the order of PLN 300 per sq.m. upwards. The detailed costs of building shelters, due to the current wording of the regulations, are difficult to estimate.

In addition, the newly required building equipment according to the proposed regulations is currently difficult to find on the market. Therefore, they may be subject to speculation and their prices inflated. It is worth remembering that rising investment costs will mean higher prices for a finished square metre of housing. Consequently, buyers will have to reckon with rising property prices.

Shraga Weisman, CEO of Aurec Home:
The Shelter Act will significantly affect developer investments. The provisions of the Act stipulate that underground floors, among others in multi-family buildings, and underground garages are to be designed to accommodate ‘emergency shelter spaces’. This means a lot of changes, developers will have to adapt to the new requirements, which may cause delays in projects and prolong the process of obtaining building permits. The changes proposed in the Act will disrupt developers' projects because, above all, they involve a complete redesign of the building. Dedicating an additional room in the underground garage for security purposes will reduce the number of parking spaces, proportionally reducing the number of flats.

In addition, these changes will disrupt the stability of doing business, and not only for us developers, but for all entities operating in the housing market, i.e. local authorities implementing municipal investments, cooperatives or Social Housing Associations. The requirement for shelters or protective rooms in new buildings will also increase construction costs. Developers will have to factor in the additional costs associated with the construction of these rooms, which will affect the final prices of the flats.

Małgorzata Ostrowska, Director of the Marketing and Sales Division at J.W. Construction:
One of the key consequences of the changes will certainly be an increase in the cost of development, which will translate into the final price of the property.

Marek Starzyński, Sales Director, Okam Capital:
The introduction of the obligation for developers to build ad hoc shelters will translate into the need to adjust architectural designs and thus into an increase in the costs of project implementation. It is likely that these costs will have to be included by investors in the prices of the units. It is also important that developers and general contractors are given time to prepare for the changes in the regulations.

Andrzej Gutowski, Vice-President, Sales Department Director Ronson Development:
The Civil Protection and Civil Defence Act is an important initiative that, in the face of growing threats of armed conflict, introduces needed solutions to increase the safety of residents. However, the new regulations pose significant challenges for developers. They will certainly increase the cost of development, which will consequently translate into higher housing prices.

There is also a risk that the regulations, may conflict with current zoning plans, which will force developers to redesign their investments. An additional challenge is the short vacatio legis, scheduled for early 2026, which leaves little time for projects to adjust. This could lead to delays in the start of planned investments and, in extreme cases, to their abandonment.

Michał Świętosławski, Communications Specialist at Archicom:
From our experience so far, customers who decide to buy flats do not show any interest in the possible retrofitting of the development with a shelter. Current legislation does not impose such a requirement on investors either. Although we currently do not see the need to build this type of infrastructure, we do not reject such an option definitively, given the potential change in circumstances in the future.

According to our estimates, the cost of building such a facility would significantly exceed the amount of PLN 5,000 per square metre of its total area. However, the calculation should also take into account the expenses associated with maintaining the shelter during its lifetime. Challenges in the implementation of the project would certainly be the inclusion of the area of the shelter in the building intensity ratio, as well as compliance with the provisions of the local spatial development plan.

Damian Tomasik, CEO of Alter Investment:
In the face of increasing threats, such as climate change or potential conflicts, ensuring the safety of residents should be a priority. We see the introduction of regulations that make it mandatory to design underground storeys and garages with the possibility of converting them into shelters as the right course of action. In the future, such solutions may become a key element of the civil protection system.

The introduction of these regulations will have a significant impact on the property market. The need to design underground floors and garages with the possibility of converting these areas into shelters involves additional expenditure on building materials, engineering works and technical protection. We estimate that the new requirements to adapt building designs to the new standards will increase construction costs by approximately 5-10 per cent.

The increase in construction costs may lead to higher housing prices in new projects. The final impact on prices will be driven by demand and land availability.

As a result, the new regulations may result in moderate price increases in the primary market, which may affect the availability of housing for certain groups of buyers.

Despite the potential financial challenges, we believe that in the long term the introduction of these regulations will bring benefits, improving the safety of residents and raising construction standards in Poland. We will monitor developments on an ongoing basis and adjust our investment strategies so that our projects, not only meet the new requirements, but also remain competitive in the market.

Source: dompress.pl
Photo: Rokokowa Vita, Develia

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