Currently, the capital or its boroughs own over 30,000 apartments. The housing stock has been systematically shrinking for thirty years as flats are privatized. In some parts of the city, privatization continues. The new housing strategy, which you can use, the city’s Institute of Planning and Development (IPR) has now completely reversed the age-old trend.
The shrinking of the housing stock is due to end. On the contrary, by 2030, the number of city apartments in the metropolis should increase by five thousand. “Sure, it is possible to argue that all city apartments sell and leave housing to the private sector. But experience from abroad shows that cities need a reasonable level of their own housing stock. And these are cities like Munich, which no one can accuse of a voluntary approach, ”says Petr Hlaváček, the deputy mayor responsible for territorial development.
According to the new strategy from the IPR workshop, housing construction in Prague is to increase more. Both traditional private developers and, recently, the metropolis itself are to take part in this. The goal is to complete nine thousand apartments a year to satisfy the hunger for housing and stop the brutal rise in prices. However, this would mean raising construction by almost half. Last year, almost 5.5 thousand flats were completed in Prague – and this was a ten-year record. At the same time, developers began construction of only 4.3 thousand new housing units.
How do you want to help nine thousand flats a year to be built in Prague at last? The fact that eight to 10,000 flats a year need to be sent to the market to stop the Prague housing crisis has been talked about for years, but the situation has not changed much.
But we are finally doing something about it. Last year, we founded the Prague Development Company (PDS). It takes care of what is professionally called “land development”, prepares the area for construction. Today, PDS works in about twenty localities, where we imagine within a few years that they should have a state of nine to ten thousand flats a year. Two thousand of them would be built under the influence of the city.
What does “under the influence of the city” mean?
Either it will be flats built directly by the city, or the DSO will prepare the area for construction, and before that, housing cooperatives are needed. We have a vision to build two thousand flats a year in this way.
– 1st Deputy Mayor of the Capital of the City of Prague elected as TOP 09 + STAN.
– is responsible for the strategic development of the city and the zoning plan.
– He graduated from the Faculty of Architecture of the Czech Technical University. He started his career in 1987 at the Project Institute of the Capital City of Prague. of the City of Prague, later he worked in private architectural studios.
– from 2015 to 2016 he headed the Institute of Planning and Development of the Capital City of Prague. of the City of Prague, he was removed after the appointment of Adriana Krnáčová (ANO) to the post of mayor.
Does Prague still have any significant building plots today? The building plots have so far sold out to private developers.
Prague no longer has large plots of land, but still owns some localities. We also include the property of city districts or city companies, such as the Transport Company of the Capital City of Prague. Two such most interesting files are Palmovka or Nové Dvory. There also results in a metro station, there is to be a multifunctional development. In both localities, the zoning plan is being changed, negotiations are being made with the city districts, and a real project is being prepared. And there are other plots of land we are working on.
When will the city work to build two thousand new apartments a year to start?
We do what we can. There are legislative barriers that everyone is writing about. That it takes nine years to process a building permit. We want to prepare in such a way that it is built in this way in the previous election period. To prepare projects.
Does this mean that the DSO will transfer the territory to investors with a building permit already issued?
Yes. She should order a building permit and then the city council will decide whether to build a city in that area or whether to select a cooperative based on the selection area. Or if it will be built, for example, through the so-called “Baugruppe” (builders’ association, community construction modeled on Germany or Switzerland, ed. Note)
End of sale
Does the city stop selling land to private developers completely?
Basically, we said we didn’t sell land. We pushed it through in the coalition. But it may happen that in some set with the city it will seem reliable to sell part of the prepared territory. However, with the added value of a building permit that has already been issued. The sale of prepared projects can be a source of funding for the preparation of additional land. But the current philosophy that everything will sell has not led the city to complete satisfaction.
How do developers react to this turnaround? Will they have enough space in Prague for private construction?
They still don’t need all the land from the city. We get a lot of space, for example, from state companies, for example from Czech Railways and the like. They can continue to buy from other owners.
What does PDS look like after less than a year of existence? How many people does he have for the preparation of construction sites?
About eight today. The target state, which should gradually occur, is about twenty people. Which is actually the size of a medium-sized development company.
In a press release on the new housing strategy, IPR states that housing construction is to take place mainly on large transformation areas, specifically called Bubny, Žižkov Freight Station or Smíchov. But these are all locations that developers have long since dismantled. The city with its own construction can no longer go there.
Yes, these are mostly private plots. But we have another point in the strategy, in addition to our own construction, also the availability of quality housing. And the development of the city’s housing stock, which are mainly the reconstruction of apartments. And then there is our key point associated with contributions or the participation of private investors. It is the coordination of various private intentions. In other words, we work in large areas, such as Bubny or Žižkov Freight Station, so that the projects of individual entities are coordinated there and also with the participation of investors to collect enough funds for new schools and possibly even for city apartments.
Public Works Fund version 4.0
For many months now, they have been negotiating with private developers for a public investment fund, to which they would pay a different amount for the construction of public buildings, such as schools, or for other civic amenities. Have you already reached an agreement with investors on this?
There were a really large number of those meetings. We have such a 4.0 vegetable today, we would like to approve it in the council as a recommended material before the holidays. Colleagues are very responsible about this, they perceive that the city is in a difficult situation. That is, it needs to support the creation of projects and housing, but at the same time it does not have sufficient resources for full equipment in new neighborhoods. Because the city also has to save for metro D and other big events.
I see. Does version 4.0 anticipate that developers will contribute to public works? Did you agree with them on the amount of their contribution?
We have it focused on what our office is mainly dealing with at the moment – territorial development and changes in the zoning plan. It is in our interest, if changes to the zoning plan are to be approved, that the procedures are processed. We have several variants. And we want the contribution to public investment to be calculated from the difference in capacity between today’s zoning plan and its change. A levy would be calculated from the square meters intended for development, which will result from a change in the zoning plan. We propose it in the amount of 2.3 thousand crowns per square meter.
So the developer would actually pay that contribution to the city coffers for allowing him to build by changing the zoning plan.
It is a mutually agreed contribution to be returned to that territory in favor of full amenities. This decree should definitely not be used for the construction of a new recreational seat of the City of Prague or for the construction of a swimming pool under the direction of the city district. It should be for school and other amenities. But it must also be said that we take such basic interior equipment as a park, roads, connections as a natural part of a development project. We want the real amenities of the new city district.
Metropolitan plan within two years
The construction and approval of projects should also be accelerated by the new Metropolitan Plan. Last year you said it could be approved in 2021 or 2022. Is it still realistic?
Now we have a presentation of the Metropolitan Plan for the city districts, for various political clubs. The coronavirus crisis has quite delayed us in this, but we are preparing a transcript for the public hearing at the end of the year, where the comments of all the state administration bodies concerned will already be incorporated. They will then be able to comment on it again. In the Czech Republic, we simply have such a two-wheel system. We assume that after this public hearing, it will take another year to process those comments and submit them for final approval. It will certainly be an impetus for the development of the city.
According to the new IPR strategy, the city should increase its housing stock from today’s about 30,000 apartments to 35,000. Why does the city need more of its own apartments?
The five thousand extra flats is currently estimated. It is necessary to have a certain number of flats – as social flats or flats for so-called necessary professions. We want to get to them by a combination of different paths. Firstly, we will get new flats in houses built in cities. At the same time, intensive work is being done on the reconstruction of apartments that were previously empty. And then, of course, we consider a possible advantageous purchase of apartments. We definitely want to test whether it would not be possible to buy apartments. But investors can also fulfill their participation in construction projects by handing over parts of the cities’ apartments built at a cost.
City Hall as a developer
Last year, you ruled out the possibility of the city building its own houses as an investor. Now he talks about it as one of the ways to increase the city’s housing stock. We have undergone a fundamental change of opinion…
Definitely at this point. We anticipate that we will prepare flats as a city for implementation.
The construction of apartment buildings will be managed by PDS?
When a private developer builds a house, he prepares it, but the construction itself is done by a construction company. In our country, the tender for the supplier was prepared by the investment department, which would also organize the construction. And the house is then handed over to the administration of the property department.
Do municipal officials have the necessary knowledge and experience in managing construction projects?
Why shouldn’t he? It works similarly in Munich, Hamburg, Vienna. I’m a patriot and I think if he can do it there, we have to be able to do it too. Colleagues are preparing the project, the structure of the municipality must be able to build and manage houses.
Cost: 40 thousand per meter
In a press release on new housing strategies, IPR states that its implementation will not be possible “without securing significant financial resources”. So how much will the expansion of the municipal housing stock cost the Prague City Cashier?
This is about hundreds of millions of crowns. If two thousand flats are really built in the next election period, then each flat will have an average of some sixty-eighty square meters. The construction of each meter will simply be some forty thousand crowns plus infrastructure. Those projects must be necessary so that the economic concept is sustainable.
Are you sure that the housing strategy will not fall after the next elections, when the political constellation in the municipality may change? That the next Prague government just doesn’t throw it under the table?
I do not think so. Individual city districts, which have different colored lines, are very similar.
So you don’t see a political force in Prague that would like to go the other way, ie further reduce the city’s housing stock and leave the availability of housing to market mechanisms?
These are the examples of cultural Western European cities that manage their property as responsibly as saffron. The examples are quite clear. A city like Vienna has a tradition of urban living for a hundred years. The Hanseatic city of Hamburg also has a long tradition in this, with all major cities coordinating the development of their territory. He makes various investments in them, but at the same time he also builds in them, always in some agreed mix. We are at the beginning, so there is more pressure to build and prepare those things.