Prague wants developers to contribute to the development of the city. This will make the apartments cheaper, says Deputy Hlaváček
Developers who want to build large districts in Prague will have to pay part of their profits to the city. After two years of preparations and negotiations, the capital is finally close to approving the so-called methodology of investor participation, or uniform rules according to which they will develop their participation in the construction of schools, schoolchildren, parks or city apartments. Along with the preparation of the new Building Act, this is one of the most significant changes for the real estate business in recent years. Last week, the methodology was approved by councilors from the municipal coalition of Pirates, Prague and the United Forces (TOP 09 and STAN). Representatives will discuss it on Thursday.
The contribution is aimed mainly at large projects such as the reconstruction of the Žižkov Freight Station or the development of Smíchov. Developers will provide it either in money, land or by building schools, kindergartens and parks or city apartments. The investor should pay 2,300 crowns per square meter of gross floor area for the part of the project that requires a change in the zoning plan. This includes the area on which the walls stand. For part of the project, where the zoning plan already allows for construction, the city would require 700 crowns per square meter.
According to the First Deputy Mayor of Prague Petr Hlaváček (TOP 09), the contributions are intended to help alleviate the current housing crisis, which makes housing less accessible even for average-earning Praguers. Developer contributions are another of a number of tools used by the city management to speed up the approval of changes to the zoning plan. These are necessary for practically every major project, but they hinder them complex negotiations between the city, the boroughs and development. Municipalities are afraid of wild construction, which brings people to its surroundings without providing them with basic services.
According to Hlaváček, the builders have to wait about two years for the changes to the zoning plans, four years ago it was seven to eight years ago. In turn, Prague would receive money for the construction of the necessary infrastructure, which it could use at a time when it will not be able to take out a loan due to the expensive construction of the city ring road or the new metro line.
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