Concrete progress

An amendment to the special residential act, colloquially known as the ‘Lex Developer bill’, has found its way to the Polish government’s legislative body. [Ed: this conversation took place at the beginning of September]. The Polish Association of Developers [PZFD] has been intensively lobbying for these changes. Why are they so important?

Patryk Kozierkiewicz, a legal trainee and expert at the PZFD: These reforms are set to open up new opportunities for developers and unblock many investment sites, while local authorities would not lose control over how this land is used. Such projects will still need local government approval. At the moment, on the basis of current legislation, you can develop a project that does not fit the spatial plan but that nevertheless has to be in line with the site conditions. There are a number of exceptions to this, such as sites formally used for production and railway land; but what the amendment will do is to increase their scope to include large format retail plots and former office sites. This is particularly attractive land that is often ideally located and completely unused.

Why not?

Since the time when these spatial plans were approved, the situation on the market has changed as well as our habits and needs. In many districts, it no longer makes sense to build a gigantic shopping centre with a vast car park, because we now prefer smaller centres. In addition to that, Covid and the switch to hybrid work has altered the demand for office space in some locations – we have such a situation in Warsaw in the Służewiec office basin sarcastically referred to as ‘Mordor’, where there is a shortage of land for residential development. It’s estimated that many thousands of apartments could be built on the office plots in the district, but under the current regulations even if an owner decided to knock down an office building, all that could be built in its place would be yet another office block, apart from those exceptions where in the meantime another spatial plan has been approved allowing for the development of a residential building. These sites have been concreted over, but now, to use a construction metaphor, thanks to this amendment we can get the jackhammers out.

So the residential sector is to be the main beneficiary of the changes?

Yes, but it’s not only the residential sector that will benefit. Landowners will also benefit, since they will be able to use their properties more flexibly to meet local needs – and all under the supervision of the local authorities. More sustainable mixed-use projects could be built in line with the concept of the 15-minute city, where residents live side by side with office blocks, retail and entertainment facilities. Home buyers will also benefit, as more residences will be able to be built in attractive locations with access to public transport and other infrastructure. This will also be a factor in preventing cities from sprawling out beyond their limits.

Will local authorities still make such permission conditional on what we could call ‘offset’, that is, developers building public roads and squares?

‘Conditional’ is not really the right term. A local council can assess what it needs in the area of a planned development and under this law will be able to negotiate with a developer for them to finance and build a particular complementary project, such as the renovation of a local park or the construction of a school. It’s worth noting that this participation mechanism was created only for projects covered by this bill, which is an additional advantage that may encourage local authorities to grant such permission.

When can we expect the amendment to come into force?

The council of ministers has until the end of September to finish drafting it. So, barring any problems, it should be voted in by the Sejm by the end of the year.

How effective do you think the original act was? It’s been in force now for around four years. Has it changed the market in any significant way?

It’s only recently that the law has really been used. At the beginning it was hard to convince local councils of the efficacy of the new law, but with every new project this became easier, because they began to see real benefits and this encouraged others to use it. So far, local authorities have granted permission for 266 projects involving the construction of 35,000 apartments. As we can see, this has been a very piecemeal process. Most of these approvals were for small developments, which were sometimes only for a dozen or so flats in small districts, and so the general public only heard of such projects from time to time as the media only reported on the largest developments in the biggest cities. We should certainly expect that the unblocking of sites from large-format retail use is going to speed up the whole process and make more spectacular projects possible. It’s not just single buildings that are going to be built, but entire estates similar to those now being developed in Warsaw.

Interview: Tomasz Cudowski