According to estimates by experts, there may be a shortage of as many as 2 million homes in Poland! The government is considering changing regulations related to agricultural land in cities as a solution to this problem. However, will the new regulations actually facilitate the implementation of new investments and thus stabilize real estate prices? RynekPierwotny.pl asked representatives of development companies in Poland this question.
Tomasz Kozak, Board Member / Commercial Investment Director at PROFBUD
The change in regulations concerning agricultural land in cities can increase the supply of apartments, which is crucial in the face of increasing demand. In Poland, there is a shortage of at least 1 million apartments, and some experts estimate the deficit at even 2 million. Developers account for the lion’s share of the built premises.
The current lack of available land for development leads to a rise in property prices and limits the development of housing. Releasing agricultural land will increase the available investment areas, which will contribute to the stabilization of prices and improvement of housing availability. Greater availability of land will enable the implementation of a larger number of projects, which will benefit the entire real estate market.
However, the conversion of agricultural land should be carried out taking into account the protection of the environment and the needs of local communities. At PROFBUD, we implement responsible environmental practices in our investments. We take care of ensuring that new housing estates are well communicated, have the appropriate infrastructure, and integrate urban greenery, which increases their attractiveness and functionality.
Jesika Mackiewicz, Business Manager Portfolio Warsaw, Matexi Polska
The development industry has long been appealing for a package of changes to increase the supply of land for residential construction, including changes to agricultural properties in urban areas.
In the context of the latter, we are talking about thousands of hectares of land in cities that are considered agricultural. Their removal from the protection of agricultural acts, and in particular the act on shaping the agricultural system, will facilitate the change in status of agricultural parcels to construction lands. As a result, the lands that have been subject to restrictions so far will be released for investment activity, increasing the supply of land on the housing market. It can be presumed that the change in regulations will slow down the increase in land prices within city limits and, therefore, a drop in house prices. This is the main aim of the proposed changes in the legislation.
However, alongside these changes, it will be necessary to ensure the protection of agricultural land in cities at the legislative level. This requires precise determination of which agricultural lands may be designated for housing construction, and creating mechanisms for monitoring and evaluating the impact of these changes on the environment and local communities.
Piotr Pietrzak – Director for Expansion Unidevelopment SA
Current regulations of the Act on the Tailoring of the Agricultural System significantly complicate the turnover of agricultural lands in cities. These regulations limit the possibilities of selling and buying agricultural land, such as those whose agricultural purpose stems from the content of local spatial development plans and, in the absence of a plan, from land records. Lands with an area of 3000 m² to 10,000 m² are subject to the right of first purchase by the National Agricultural Support Center, and the turnover of lands above 1 ha is almost impossible. Only land up to 3000 m² is exempt from restrictions.
These limitations are difficult to justify, as agricultural lands in cities often are not utilized in accordance with their original purpose, which undermines the purpose of their protection. Industry organizations have long been calling for the abolition of these restrictions. We estimate that such changes would result in market revitalization and an increase in land supply. Additionally, the new regulations can simplify and speed up the procedures for converting agricultural land into construction land, which can shorten the time of investment implementation and increase their number.
The challenge remains the general plans currently being prepared, which may keep some lands without the possibility of development. Lands not covered by local spatial development plans may remain outside the so-called area of supplementing the development, which will prevent the issuance of decisions on building conditions for them. Therefore, it may turn out that despite the release of lands, some of them will still not be able to be used, which would significantly slow down or completely prevent real changes.
Karol Dzięcioł, Business Development Advisor in the Develia Board
The changes declared by the government are primarily intended to solve the problem of insufficient land supply for residential construction in cities. I assess any action of this type positively. This move seems rational because it is able to free a significant part of the land whose sale is limited by the act on shaping the agricultural system. However, it should be noted that this is rather a long-term perspective, as we are talking about agricultural land, often unplanned and devoid of the technical infrastructure necessary for the implementation of investments. The process of preparing them for the implementation of the building will require many months of work which, as a result, will translate into an increase in the supply of new apartments after a few years. In my opinion, the change in regulations related to agricultural lands in cities will have a stabilizing effect on house prices and will meet the demand needs of the population, but only in the longer time perspective.
A major problem for cities may be the location of this type of site. They are usually located on the outskirts and have limited access to kindergartens, schools, public services. This can create a risk of creating investments generating additional social costs, the need to invest in infrastructure networks or the development of communication. The yet unknown role will be played in this case by the new act on spatial planning and development, local general plans and the urban standards of municipalities, whose intention was also to prevent uncontrolled city development.
Katarzyna Unold, Managing Director at ACCIONA in Poland
At ACCIONA we maintain the opinion of most developers and experts that it is a move in the right direction. The act, which will soon go to public consultations, will give a chance to release a large amount of land with agricultural status, which are located within cities. So far, even when the surroundings of the land were decidedly “non-agricultural”, but the land itself had agricultural status, above 1ha could only be acquired by a person conducting agricultural activity (except when there was a local spatial development plan with a non-agricultural purpose in a given area).
In this way, more plots for residential construction may be transferred for turnover, the right of first purchase will disappear and the practices of speculation with such lands will be eliminated. However, it should be noted that these regulations may also cover, apart from urban, armed with infrastructure areas, also areas on the outskirts of cities, which would cause an unfavorable trend of “spilling” of peripheral districts.
Despite everything, we look forward to the final shape of the new regulations and we hope for a high standard of legislation, which was not the rule lately.
Dawid Wrona, Chief Operating Officer at Archicom
New regulations proposed by the Ministry of Development and Technology aim to free up agricultural land located within cities, thereby increasing the supply of land for housing investments in them and affecting the reduction in real estate prices. This means that agricultural lands will no longer be subject to restrictions arising from agricultural acts, and above all the act on shaping the agricultural system, which hindered investment development and limited agricultural land turnover. Thanks to the planned changes in the legislation, it will be easier to change the status of agricultural plots to building ones, which has so far been a long and complex procedure. The National Center for Agriculture will no longer have the guaranteed right of first purchase in agricultural land transactions. The amendment project will soon go to public consultations.
The possibility of buying and easier reclassification of agricultural lands for building will affect real estate prices and an increase in their supply, which will undoubtedly be beneficial to the market. Although the cost of purchasing such land will certainly increase, the disparity between the prices of agricultural land and those intended for construction purposes will decrease. The changes in the legislation will accelerate the pace of implementation of new urban and developer investments, as well as the property acquisition process. This will certainly encourage investors to be more active, which will translate into dynamic city development and housing price stabilization on the developer market. However, for the new regulations to bring the expected effects, their introduction should be accompanied by streamlining administrative processes – including in the matter of adopting local plans, their proceedings, or the approach to planning rent. It should be borne in mind that each change in regulations, apart from benefits, involves additional challenges, in this case related to technical and social infrastructure.
Magda Kwiatkowska – Świstak, Legal Advisor RONSON Development
The project to free up agricultural land located within administrative city limits, on which the Ministry of Development and Technology is working, is an initiative that can have a positive impact on the housing market. According to the announcements, it aims to facilitate the change of status of agricultural plots to construction plots, thus increasing the supply of land for residential construction. As RONSON, we see many positive changes in this concept. They can contribute to better use of urban space and support urban development, provided they go hand in hand with infrastructure availability. We can also expect an acceleration of the construction project implementation process.
However, it should be noted that this is a new proposal. We will be watching with interest the progress in working on this project.
Source: https://managerplus.pl/deweloperzy-o-planowanych-zmianach-w-prawie-budowlanym-opinie-i-prognozy-83786
