Poland: What is the most inhibiting factor for housing development today
What is the most inhibiting factor for housing development today? What regulations could improve construction and help the development of housing in Poland? What changes concerning the real estate market should decision-makers introduce so that there are more flats and they are cheaper?
Tomasz Kaleta, managing director of sales and marketing at Develia:
The biggest barriers to the developer's activity invariably remain: the long time of the investment procedure in offices - currently, launching an investment on the market from the moment the land is purchased takes two years on average, dynamically changing regulations, which are often implemented without consulting representatives of the industry, and the low availability of plots for residential development.
Therefore, we support all solutions that could contribute to increasing supply in the primary market. One example of such a measure is the announced amendment to the urban agricultural land legislation. It would be able to free up a significant part of the land whose sale is restricted by the Act on the Formation of the Agricultural System. The process of preparing them for development will require many months of work, which will only translate into an increased supply of new housing in a few years' time. However, in my opinion, in the long term this could have a stabilising effect on housing prices and would make it possible to meet the demand needs of the population.
Mateusz Bromboszcz, Vice-President of Atal:
The current reality of procedural matters in offices significantly affects the development of housing in Poland. The state should deregulate and simplify procedures that excessively lengthen the investment process, as well as standardise them, as the interpretation and enforcement of regulations varies from one municipality to another today. The lack of progress on these issues, not only hinders housing development, contributing to a supply gap, but also puts pressure on housing prices.
A separate issue is that most of the regulation protecting customers burdens developers. We are perhaps the most regulated market of all. We have nothing against the customer being protected as this is also in our interest, however, over-scaling in this area results in higher housing prices.
As an industry, we would also like to see legislation enacted with a more distant timeline and the quality of the law to be high, without raising questions of interpretation. Currently, many acts are passed at too fast a pace, the transition periods are too short, and this does not serve to optimally adapt investment plans to changing conditions and generally harms the market.
Małgorzata Ostrowska, Director of the Marketing and Sales Division at J.W. Construction:
We often answer this question and always mention several issues. First and foremost, the need to free up land for attractive developments in good locations. Another topic is the streamlining of the subject of formalities related to the construction of new estates. Prolonged procedures often affect the cost of investment, so this works to the disadvantage of all parties. Stimulating demand is key to solving one of the biggest problems in the housing market at the moment, i.e. reducing the housing shortage, as many people and families are currently excluded due to a lack of creditworthiness.
Andrzej Gutowski, Vice-President, Head of Sales Department, Ronson Development:
The development of housing in Poland is facing a number of problems that are hampering its dynamics. Market participants invariably emphasise the need for a coherent housing policy, the introduction of changes that would improve housing construction. These will not be solved by a single law. A package of laws is needed to create a strategy for housing construction in Poland for many years ahead. Cooperation between the government, representatives of the development community and local authorities is needed to prepare it.
Housing built at a lower cost would be cheaper, but this would need the release of the state stock and any land that is available in this stock. Another factor is the release of agricultural land within urban boundaries so that access is easier. Stability and effectiveness of the law is also key. Legislation that will enable developers to carry out housing projects should streamline the process, not prolong it. The metropolitan areas, and these are the largest housing markets, suffer the most from the current situation. Here, the statutory deadlines are not respected to any extent.
Shraga Weisman, CEO of Aurec Home:
Developers invariably and for years have been demanding directives from decision-makers on three key issues: the release of state-owned companies' land, the streamlining of administrative procedures and sensible reform of the housing system.
The main factor limiting the supply of new flats is the low availability of land. In Warsaw, only 40 per cent of the area is covered by zoning plans. Agricultural land plots are also excluded from housing production - with no possibility of conversion, and much of this type of land is located, for example, within the administrative borders of Warsaw. Developers have a huge demand for land suitable for housing development, including land currently held by the National Property Stock, State Treasury companies and land left over from decaying office buildings or large-format shops. We are looking forward to the law announced by the Minister of Development and Technology, Krzysztof Paszyk, which will make it possible to ‘mobilise additional land and build more housing’.
The second issue is speeding up the process of launching new investments. The prolonged time to obtain building permits means that investors have to wait several months for work to start. In the largest cities, administrative procedures are often dragged out without any substantive necessity and even last for years, despite the fact that the statutory time limit for obtaining a building permit is 65 days. Delays in issuing approvals and decisions translate into the level of a developer's offer, the costs of running investments and the ability to efficiently launch new projects and put units into use.
The third demand of developers to decision-makers is related to the creation of a long-term housing strategy, which will comprehensively outline housing issues in Poland. We developers know very well that one-off and short-term programmes work only on the demand side and are dedicated only to a limited group of customers. Supporting only the demand side with programmes based on subsidies, such as e.g. the 2% safe loan or Mieszkanie na start, in the long term brings about a rapid buyout of specific premises and a sharp increase in property prices. We are concerned with balancing the support.
Damian Tomasik, CEO of Alter Investment:
One of the main challenges for residential investments today is the complicated and time-consuming process of obtaining building permits. Significant delays resulting resulting from the need to obtain many approvals, opinions and decisions, as well as the volatility of regulatory interpretations, affect the lengthening of project implementation time. Simplification of administrative procedures and speeding up processes related to the issuing of building permits would be crucial for increasing the dynamics of the residential market.
Another important issue where changes in regulations could bring significant benefits is access to land for development. The introduction of more flexible land use regulations and the mobilisation of landowners to make land available for housing development could significantly increase the availability of land for new developments. This could reduce the cost of land acquisition, which is one of the key factors influencing the final price of housing.
Decision-makers should also focus on the stability and predictability of the law. Frequent changes in legislation, its vagueness and complicated interpretation negatively affect the planning and implementation of investments. Stable and unambiguous regulations would enable better planning of investments in the long term, which could contribute to increasing the supply of housing and lowering their prices.
One solution that could assist the housing market is the introduction of financial support programmes for investors, implementing projects with higher energy standards or building flats for rent under social programmes. Such initiatives could stimulate the development of the market in a sustainable way, while responding to the responding to the growing needs of residents.
In summary, the main obstacles to housing investment at present are the complexity of administrative procedures, the limited availability of land and the instability of regulations. A focus by decision-makers on the aforementioned issues could significantly increase the number of available flats on the market and reduce their prices.
Source: dompress.pl
Photo: Rokokowa Vita, Develia
