Building development summit: How to improve Prague after the elections?
More than half of Prague residents (53%) consider the lack of apartments and high housing prices to be the biggest problem in Prague, while 36% consider transport and parking to be the biggest problem. He showed this through a large public opinion survey carried out by the Instant Research application of the agency Ipsos in early September.
Supporting building development and solving the housing crisis are key tasks for Prague and the state. The participants of the big autumn Construction Development Summit with the debate of candidates for mayor of Prague in the Municipal House, which was organized by the Association for Architects and Development, also agreed to permit and build faster. The main current recommendations are as follows:
• Pro-development building law as soon as possible
• Change in taxes in favor of the cities and municipalities where they are built
• Ambitious Metropolitan Plan for growing Prague
• State financial support for the revitalization of brownfields
• Exchanges of unused land for apartments from developers
Before the upcoming municipal elections, the Association for Architecture and Development also issued “8 recommendations for the new management of Prague”. The association is an independent initiative of experts from the fields of architecture, construction, economics and law and organizes regular half-yearly summits with the participation of key representatives of the public and private spheres. The general partner of the association is the largest Czech residential builder Central Group, and the partner of the summits is the consulting company KPMG Czech Republic.
What are the most important recommendations for the new management of Prague:
1. Strategy for the development of Prague and the Metropolitan Plan
Prague must be planned as a metropolis for at least 2 million people. Around 1.6 million people already live in the capital, and their number is still growing. A long-term Strategic Plan with a view to at least 2050 and a new pro-development territorial plan must correspond to this. Otherwise, the metropolis will collapse and the quality of life here will deteriorate. A necessary condition for the development and further prosperity of Prague is sufficient areas for new construction and public investment in infrastructure.
2. The new construction law and its effects on the metropolis
A pro-development building law is key for the development of Prague and the entire Czech Republic, and that as soon as possible. Further price hikes and further uncertainty about this major new legislation is hurting the country greatly and the state is losing billions in taxes. Prague is the driving force behind the functioning of the entire country and generates a quarter of the Czech GDP. That is why she should be intensively involved in the negotiations on the new law and promote, in particular, the strengthening of powers in spatial planning and municipal building regulations.
3. Financing of new construction and the necessity of changing taxes
The state earns hundreds of billions of crowns in taxes on new construction. However, cities and municipalities must obtain significantly more money from the state for the necessary public infrastructure. Otherwise, it is logical that new construction is often resisted. A suitable solution could be to reduce the VAT on apartments from 15 to 10%, with the remaining 5% being collected directly by the cities and municipalities where they are built (the so-called 10+5 PRINCIPLE). Requiring “voluntary” contributions from private investors is not a systemic solution and only increases housing prices.
4. Solving the housing crisis and lack of schools
To solve the housing crisis, massive housing construction is necessary. There is no other solution. For this, it is necessary to speed up and simplify permitting and allocate enough areas for new construction. If permits are issued faster and more are built, the prices of new apartments can be lower by up to 15%. Prague must have a clear strategy for the construction and financing of new schools. Without the provision of education and other necessary infrastructure, which is a necessary task of public administration, massive housing construction cannot take off.
5. Solving transport problems and the “city of short distances”
Ensuring transport structures, technical infrastructure and education is clearly the task of Prague and the state. The private sector cannot provide this. Emphasis and public subsidies should be aimed at expanding quality and affordable public transport as the preferred alternative to individual car transport. Greater building density and, where appropriate, taller buildings can create a sustainable, functional and pleasant “city of short distances”.
6. Cooperation between Prague, the state and the private sector
Prague and the state must cooperate in the area of legislation, the fair distribution of taxes and the financing of nationally significant buildings. It is advantageous for Prague to develop various models of cooperation with the private sector (PPP projects). Prague has other, more important tasks than building its own apartments. But he can easily and quickly create his fund of rental apartments by transparently exchanging unused public land and brownfields for apartments that will be built by private investors.
7. Climate plan, protection of the environment and monuments
Prague’s climate plan is heading in the right direction, but it was approved under completely different economic and energy conditions. Therefore, it should be revised taking into account the current situation and problems. The environment and monuments must be rigorously protected, but at the same time the metropolis must be maintained in order to prosper. Social control over building permits is needed, but the development of the metropolis cannot be held hostage by various activist groups and the “NIMBY” approach.
8. Brownfield development and quality of new construction
New construction on brownfields should be a priority. The state should financially support the decontamination and revitalization of brownfields, not only public ones, but also private ones. The quality of spatial planning and the quality of new construction with action on public space and greenery are key to building development. The planned construction of the unique Vltava Philharmonic in Prague can be a great impetus for public and investor interest in high-quality modern architecture throughout the country.
More about individual topics, including the complete “8 recommendations for the new management of Prague” and the unique new “Half-yearly analysis of the construction industry and the housing market” is available on the website arch-rozvoj.cz. It is also available here the entire record Construction Development Summit, which took place on September 14 in the Municipal House in Prague.