As announced in our last article in the series on the Act of 5 July 2018 on Facilitating the Preparation and Implementation of Housing Investments and Associated Investments (" lex developer " or " special housing act "), we will provide you with an overview of the changes the government is planning in connection with the spatial planning reform. At the same time, we would like to point out that since the January pre-consultations, no new information has emerged regarding further work on the amendment.
As we all remember, the developer lex came into force on August 22, 2018, introducing new opportunities for implementing construction projects, while generating much controversy. As the drafters of the changes point out in the justification, "over the past three years, the need for amendments has been recognized as a response to emerging problems and new challenges facing municipalities." Municipal resolutions based on the special housing act have begun to be adopted, and the government is proposing sweeping changes, including an integrated investment plan (" IIP ") instead of a resolution on the location of a residential investment.
This isn't just a name change. The integrated investment plan would be a special type of local plan, adopted by the municipal council at the investor's request, following negotiations and the conclusion of an urban planning agreement. This agreement would define the terms and conditions for implementing the investment, as well as the parties' obligations. The integrated investment plan would be adopted after a simplified planning procedure, including consultation and review of the draft document, and public consultations. Furthermore, it would be linked to the general plan, which, as a reminder, is intended to replace the study of the conditions and directions of spatial development of the municipality by 2026 at the latest (for more information, see article #85 ).
The essence of this solution is to expand the range of investments that can be implemented – these can include residential, service, manufacturing, as well as agricultural and forestry production . For this reason, the name of the act itself is to be changed to: the Act on Facilitating the Preparation and Implementation of Major and Accompanying Investments . Therefore, the resolution will no longer apply only to residential investments, but to major investments – meaning projects involving construction, change of use, or reconstruction, resulting in the construction of a building or buildings in a residential area, a service area, a production area, a production area on agricultural, breeding, or horticultural farms, or an area of large-scale agricultural production, with a total development area of no less than 2,000 m².
The idea is good, but further proposals will make construction under the developer's lex impossible in practice. The draft amendment captures the project's main intention, which is to expand the scope of the special act and create an alternative path for land use for purposes other than residential. However, it should be emphasized that this is not the same as the current procedure for obtaining a resolution on the location of a residential investment. The draft amendment requires the investor to conclude an urban planning agreement and have the municipality adopt an integrated investment plan – which may prove much more difficult than obtaining a resolution on the location under the current regulations.
The amendment assumes that the first step is for the investor to begin negotiations with the municipality , which will result in the signing of an urban planning agreement, which will serve as the basis for the investment. An urban planning agreement is a solution already existing in the revitalization plan preparation procedure – now it will also be applied to ZPIs. An urban planning agreement may cover, among other things, the implementation of accompanying investments and the coverage of all or part of the costs of implementing accompanying investments or other facilities necessary to ensure the implementation of technical, communication, or social infrastructure. An interesting solution is the possibility of concluding an agreement between multiple investors, which may allow for the cohesive development of larger areas.
On the other hand, this may pose a risk of higher costs for investors. An analysis of the regulations indicates that the ZPI is intended to ensure that municipalities have greater influence over the development planned by the investor, as well as social infrastructure (schools, roads, recreational areas). Consequently, municipalities will only be willing to sign urban planning agreements if investors commit to financing additional investments in public projects, such as schools, parks, or roads, and transferring ownership of these projects to the municipality.
According to the draft amendment, the provisions on the adoption of a local spatial development plan apply to the adoption of an integrated investment plan, unless the provisions of the lex developer provide otherwise.
In this regard, I propose that the municipal council adopt the plan upon the investor's request, submitted through the mayor, commune head, or city president . The ZPI approved by the municipal council must be identical to the design included in the urban planning agreement. Consequently, the municipal council cannot independently amend the ZPI design . It can either accept it in its entirety or reject it. However, if the municipal council determines that the design requires amendments, it should reject it and forward it to the mayor, commune head, or city president with proposed changes.
The draft amendment also abolishes the periodicity of the Act's validity, and the ZPI will remain in force indefinitely.
In summary, we believe there is a serious risk that the amendment will significantly delay the implementation of residential investments, and that the methods developed so far will no longer be applicable after the planned changes. Furthermore, implementing the investment will entail additional costs, which will also discourage investors.
The project is currently in the pre-consultation phase, so the solutions presented may be subject to complete change. We will closely monitor further developments in this matter. We will keep you updated on any changes introduced during the legislative process.
Next week, we'll be launching a new series of articles on construction contracts. To begin, we'll review the principles of investor subsidiary liability under the Civil Code.
Together with Rzeczpospolita and the Polish Association of Developers, we invite you to a training session entitled "The Development Industry in the Face of the New Development Act." The aim of the training is to discuss the changes that developers must prepare for starting July 1, 2022, following the entry into force of the new act. Details can be found at konferencje.rp.pl .
This article is for informational purposes only and does not constitute legal advice.
Legal status as of March 21, 2022
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