What effects will the amendment to the Planning and Development Act have on housing projects? During the transition period, which runs until the end of 2025, will there be noticeable adjustments in the planning and zoning system, the adoption of local development plans, or the procedure for issuing zoning decisions? How will these new planning rules influence the operations of development companies? Will they streamline the process of implementing new investments?
Piotr Byrski, Business Manager Portfolio Kraków, Matexi Polska:
Last year’s amendment to the Act on spatial planning and development is a necessary, but much overdue document from the perspective of spatial planning. In the long term, with clear rules, greater transparency and plans for digitisation, the new regulations should make administrative procedures more predictable.
However, in the interim period, the legislator has imposed heavy obligations and considerable time pressure on local governments, which have been obliged to adopt municipal general plans by the end of 2025. The effect of the pace of changes required to be implemented may result in temporary difficulties for investors as municipalities adjust to the new requirements. Failure of municipalities to meet the statutory deadline for adopting a general plan may lead to investment paralysis in areas not covered by existing local plans.
The complexity of the changes related to the spatial planning reform and investors’ awareness of how lengthy planning processes can be, especially in large urban centres, mean that currently land covered by a decision granting planning permission, or at least, a valid local development plan, is of greater interest to buyers.
After 1 January 2026, decisions on development conditions will only be able to be issued in so-called areas of development completion (OUZ). The municipality will be able to designate these areas in the general plan (but will not be obliged to do so). The legislator’s aim in this case was to tidy up the space and reduce the spatial ‘chaos’ resulting from dispersed development. Some properties may therefore, in the situation of not having applied for a WZ by the end of 2024, definitively lose development opportunities. ‘New’ vuzettes will have a 5-year validity period, but all previously issued decisions (i.e. before the end of 2025) will remain valid indefinitely. The introduction of the above changes has, in the interim period, resulted in a significant increase in the number of planning applications submitted by Architecture Departments across the country.
The General Plan – a kind of constitution for the space – will instead be the implementation of the Borough’s development strategy. The latter is the key planning document that sets the long-term vision and directions for the municipality, serving to improve the quality of life of its residents and socio-economic development. Municipalities are therefore now faced with the need to draw them up or, at best, update them. This is because the reliability and quality of the assumptions adopted therein will determine, in accordance with the Act’s assumptions, whether it will be possible to designate new areas for housing development in the General Plan.
The significance of the entry into force of the new legislation will vary from city to city. In Kraków, for example, there are currently 270 local plans in force, covering almost 80 per cent of the city’s area, and another 60 plans are in the process of being adopted and will be proceeded with under the ‘old’ rules even after the General Plan comes into force. Warsaw is in a different situation, where the ratio is only over 40 per cent, and drawing up new plans or obtaining new zoning decisions will require compliance with the provisions of the General Plan from 2026. Although the adoption of the General Plan will provide the basis for updating the MPZPs already in force, it is difficult to assume that municipalities will willingly embark on this task after the effort it represents for them to adjust to the obligations arising from the spatial planning reform.
It is also worth mentioning a new tool introduced by the reform of the Spatial Planning and Development Act. Integrated Investment Plans (IIPs). The investor, in agreement with the Municipality, with the consent of the Municipality Council and with the participation of the public through consultations, signs an urban planning agreement with the aim of realising the main investment and, within the framework of public participation, a complementary investment (according to a closed catalogue of such investments defined in the Act, e.g. a park, a school, a kindergarten or a road). In Krakow alone, five MIP applications have been submitted to the Mayor during the ongoing interim period, and the first of these in December 2024 gained the favour of the City Council and was forwarded for further processing. The almost unanimous approval of the City Council – albeit the only one so far – has already been recognised by investors. This allows us to hope with hope that this new tool – despite its complicated and lengthy procedure – will make it possible to realise investments to the benefit and in accordance with the expectations not only of investors, but also of the Municipality and local communities. This is because in Krakow, none of the previously submitted applications under the housing speculative law (‘lex deweloper’), of which ZPI is the statutory successor, has so far been successful, and which also required the approval of the City Council.
Karol Dzięcioł, management consultant for business development at Develia:
The new zoning regulations will significantly affect residential development. The amended law introduces many new and quite revolutionary solutions. In as little as 12 months, all studies of land use conditions and directions will cease to be valid. Instead, each municipality will be obliged to adopt a master plan. Given the state of progress, this deadline seems difficult, if not impossible, to meet. The consequence of not having a basic planning document will be paralysis in the issuing of many administrative decisions.
The regulations on obtaining decisions on development conditions (WZ) will also change, including the area of analysis of the surroundings and the rules for determining the height of buildings, and consequently there will be a restriction on the possibility of obtaining them for the so-called development supplement areas. If the municipality does not designate these areas in its general plans, it will not be possible to obtain such a decision. At present, in the interim, the key changes concern the area of analysis arbitrarily limited to 3 times the frontage of the plot, but no more than 250 m. It seems that many investors, after the local authorities have lined up master plans in which their sites will be outside the development addition area, may want to be off to the races, before the new regulations come into force, to take advantage of the old procedures.
There will also be the introduction of the Integrated Investment Plan (IIP), a document prepared together with the urban planning agreement by the municipality and the investor during the negotiation process. It will ultimately be approved by the municipal council. The new solution will oblige the investor to negotiate a package of investments needed, in the opinion of the municipality, in a given location, in exchange for the possibility of realising the development project on the basis of the general plan, and in the interim period the ZPI must be consistent with the study of conditions.
The Integrated Investment Plans formula seems likely to succeed for large developments, but, like the housing spec, it will not necessarily be applied on a mass scale. The key problem here will be the organisational complexities and the range of potential contractual expectations in relation to investment budgets.
In my opinion, there will be a significant increase in the potential of the areas covered by old zoning plans, as these do not expire. It will therefore be possible to carry out investments on these areas in accordance with the guidelines set out in the plans, regardless of the status of the master plan. This may make the land acquisition process even more difficult.
I believe that the beginnings may be difficult for all representatives of the real estate market, including developers, who will probably have to face the lengthening of the time it takes to obtain administrative decisions, the increase in investment costs, or the reduction in the availability of development land.
Magda Kwiatkowska, legal advisor to Ronson Development:
In the long term, the new legislation aims to reduce planning chaos through the introduction of the municipality’s master plan. Developers will gain a more predictable planning framework, which may speed up the decision-making process already at the stage of deciding to buy land.
The risk, however, is that the municipalities will be heavily burdened with new obligations. Currently, the investment process is still taking place under the old rules, which involves an intense ‘race against time’ on the part of investors and developers.
We are concerned about the potential paralysis in the issuing of zoning decisions that may result from the implementation of the new rules. In addition, we regret that the so-called ‘lex deweloper’, which allowed flexible development in areas without local plans, will cease to apply.
Ultimately, the changes have the potential to tidy up the spatial planning process and make it more predictable, but the current period of adjustment requires developers to be very flexible and to cooperate with administrative bodies in order to implement investments effectively.
Source: dompress.pl
Photo: Na Okrzei, Praga, Warsaw, Matexi Polska
