— Currently, in our country, there is not only a lack of a long-term strategy, but there isn’t even any idea on how to get out of this dire situation in the housing market. A 0 percent mortgage or social housing won’t solve anything, and all efforts will be in vain without any real results. In fact, the immense untapped potential lies elsewhere, and the role of the state should be to unlock it. We need more social initiative and trust in citizens, not confusion and obstacles — says Władysław Grochowski.
The entrepreneur is the president of the development and hotel group Arche SA, listed on Catalyst. The company started its operations in 1991, with its first investments in Warsaw and Siedlce, and has been building across Poland for the last two decades. In its 33-year history, it has built over 12,000 apartments and houses. It is also the largest Polish hotel chain, with 20 properties. Recently, Grochowski spoke about the condition of the housing market, identifying the biggest problems in development and price stabilization.
— We need to simplify procedures that should take a few months, but now take many years and drive up housing prices. Another important aspect is increasing availability and unlocking blocked land. Certainly, we should also allow more companies to participate in construction. Currently, the developer law, escrow accounts, and mandatory insurance create a system convenient only for the largest players, thus creating a kind of monopoly that excludes smaller and cheaper companies — often those wanting to build in small towns. What’s worse, the high entry threshold for this sector effectively limits investments that larger developers aren’t even interested in. The untapped potential also includes almost two million vacant homes while there’s a similar shortage of housing. Although every successive government has its ideas, the housing problem has remained unsolved for years. For example, from the previous government’s plan to build 100,000 social housing units, only about 10 percent were completed, and it took twice as long. Now we have more ideas that won’t solve anything and may even worsen the situation. While there are no perfect solutions, I believe a partial solution would be to simplify procedures that drag on endlessly. Bureaucracy significantly increases costs, and we are also living in times of expensive money. In the end, this results in a 20-30 percent increase in the final price of an apartment, which customers have to pay — explains Grochowski.
— Bureaucrats are increasingly tangled in this flawed system. For example, technical conditions in richer countries are not as difficult to meet or as complicated, and proper regulation could reduce construction costs by up to 20 percent. It shouldn’t be about enforcing rules for the sake of it, where many norms are excessively strict. Another absurd example is the blocking of investments by parties to administrative proceedings and the need to repeat the entire procedure. Of course, everyone has the right to oppose an investment, but bureaucratic decisions cannot take years to resolve. Ultimately, this makes housing less accessible and very expensive. For vacant properties, the procedures are the same as for large-scale investments — to renovate or change the use of a property, you have to go through the entire bureaucratic process. This is why there’s a lack of interest in dealing with this area. Social housing is even worse, and local governments don’t even want to address the issue. Typical developers are only interested in investments of at least 10,000 square meters of usable floor space. Allowing smaller firms into the market and simplifying procedures could improve a lot. The entry of smaller players with lower costs and profit margins would also reduce prices. What’s important is that they could develop areas that are currently lying fallow — Grochowski outlines.
— Not everyone needs to buy an apartment, in many situations renting is a better solution, which is related to the offer of PRS (Private Rented Sector). What’s important is that Poland still doesn’t have the state-supervised funds, known as REITs, which exist globally and have been repeatedly promised. These allow ordinary people to safely invest across the entire real estate market — including commercial properties. The current situation leaves small Polish investors with very limited options, such as buying an apartment for rent. But, when they do, the eviction of a troublesome tenant costs a fortune and can take years due to poor laws. As a result, many prefer to leave properties empty to increase their value rather than risk such situations. Interestingly, foreign REITs have been investing and profiting in our country for years, generating huge returns for their shareholders. Meanwhile, more and more Poles are buying real estate abroad, especially in southern Europe, with Spain being the most popular. It’s a complete reversal of logic! — Grochowski concludes.
Source: [managerplus.pl](https://managerplus.pl/wladyslaw-grochowski-biurokracja-i-brak-strategii-hamuja-rozwoj-rynku-mieszkaniowego-w-polsce-54234)
