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"For the development of cities, the model of housing policy, and specifically the answer to the question of whether housing is a commodity or a social good, is crucial."

24 of January '25
w skrócie
  1. Definition of a capitalist city: a capitalist city is characterized by the operation of real estate as capital, which requires legal certainty, clear regulations and transparent taxation value.
  2. Value of public space in capitalist cities: public space in capitalist cities is treated as an asset with a valued value, which precludes its cost-free use for private purposes, such as advertising.
  3. Consequences of capitalist urban development: unrestrained development of capitalist cities without regard to environmental and social constraints can lead to inequality and infrastructure degradation.
  4. An alternative to capitalist cities: social market economy cities are a model in which ownership, planning and taxation are clearly defined, and social, environmental and cultural goals are prioritized.

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Are Polish cities properly capitalist? Who loses the most in a capitalist city, and who gains? Is it possible to defend against its unbridled growth? And finally, if not capitalist cities, then what kind? These questions are answered by Janusz Sepiol, Architect of the City of Krakow, who, as he himself says, is not an enemy of the capitalist city.

Janusz Sepioł



Janusz SEPIOŁ
- architect and art historian, politician, 2002-2006 Marshal of the Malopolska Region, senator of the seventh and eighth terms. Long-time designer in the Office of Krakow Development, director of the Department of Regional and Spatial Policy in the Provincial Office in Krakow and the Department of Spatial Planning in the Office of Housing and Urban Development in Warsaw. Since 2021, he has served as the Architect of the City of Rzeszow, and since 2024 he has been the Architect of the City of Krakow.



OlaKloc: Since when have Polish cities been capitalist? What were the first symptoms of such a state of affairs?

Janusz Sepiol: This question is perplexing and requires a rather complicated answer. This is because for at least half a century, and even longer, the term "capitalist" has not been used in the common urban discourse. After all, what is the complement to the set of "capitalist cities"? Socialist or communist cities? Because, after all, not feudal cities! And where to look for such outside of North Korea or Cuba? In the overwhelming part of the world, we are dealing with cities operating under various models of economy, more or less market-based. When one pulls out of the arsenal of terms "capitalist city," one suggests links to the rhetoric of far-left movements (of the Occupy Wall Street type), the heathens of the Prague Spring of '68, or critics of the modern economy writing about "turbo-capitalism."

One can define the peculiarities of small cities, big cities or metropolises, American or Japanese cities, megacities of Africa, but is there any "capitalist" characteristic common to them all? I strongly doubt it. And after all, they are not communist cities. However, I will try - for the purposes of this conversation - to try to isolate some features of modern cities that could be described as more "capitalist" than all others.

panorama Warszawy

Warsaw's skyline - if housing is a commodity - environmental, landscape or infrastructure considerations should be a constraint on unbridled growth

photo: urtimud.89 | © Pexels


Ola Kloc: So what would be the characteristics of a capitalist city?

Janusz Sepiol: First of all, it is about a certain condition and functions of real estate, which only under certain circumstances perform the function of capital. That is, they can be treated on a par with stocks, shares or securities, they are capital par excellence. They take part in business ventures on the same terms as the aforementioned assets. This is only possible when there is certainty of their legal status. When it is known that they are not and will not be subject to some kind of claims, restitution, compensation, undisclosed easements. Their owners are certainly determined, identified. When there is a full guarantee of land records. In addition, their value is known and publicly recognized, that is - they are taxed at their value. Of course, for an investor a property may be more or less valuable, but there is a standard price, formed according to the taxation described by law. The certainty of land registers and property records is low in Poland. And there is no ad valorem tax at all. In this sense, no Polish city is "capitalist."

The second feature of real estate in a capitalist city is the predictability of permissible forms of development. Planning rules usually define quite clearly what is possible and what is excluded; the subject of the discretionary, administrative decision is the specific project itself, which may or may not appeal to city councilors or officials. The dilemma is about the "how?", not the "what?". In Poland, the predictability of the form of development is quite limited and it is the subject of the administrative decision. The question "how?" is not asked at all. The building permit is only concerned with the compliance of the project with the building regulations, which, after all, should in fact be guaranteed by a designer who has state licenses and is subject to professional responsibility, including corporate responsibility. So in this sense, too, Polish cities are not capitalist.

I would also pose the thesis that in a capitalist city everything has both a value and a price. For example, the availability of furnished public space (the interiors of streets, squares), and this means that this space cannot be used at no cost for one's own business, for example, by posting ads there for free and uncontrolled. The belief that the arranged space along roads or streets is nobody's business, that the landscape is not a value, proves that among both citizens and decision-makers the understanding of the idea of a capitalist city is not widespread.

w sierpniu 2024 roku wieżowiec Olszynki Park (proj. S.T. Architekci) w Rzeszowie został najwyższym budynkiem mieszkalnym w Polsce

In August 2024, the Olszynki Park skyscraper (designed by S.T. Architekci) in Rzeszow became the tallest residential building in Poland

Photo: Arandomguy5 | Wikimedia Commons © CC BY 4.0


Ola Kloc: We can assume that we have three players in the city - the government, investors and the public. Who is the biggest loser in a capitalist city, and who gains the most? What do we lose as residents? How do we seek a balance between the players in the game for the city?

Janusz Sepiol: Since I assume that in a capitalist city everything has value and is valued, I argue that in such a city it is impossible to give away public funds and create private wealth with them. Such an economy may be market-oriented, but above all it is predatory. Its most characteristic manifestation is wild privatizations.

Real estate changes, and drastically, its value as a result of local law determinations (local government actions) and as a result of municipal investments. It is public outlays that change the value of private real estate. These outlays can be recovered through changes in the taxation of real estate, for example, already after a change in status from non-construction to construction, as well as after development, and through the imposition of one-time fees for bringing in infrastructure(betterment fees). The city created the value, the owner should share this increase in value. This is precisely the point of a tax in the nature of an addition at the time of the sale of real estate. This is because there is no doubt that the value of the property has increased with little or no participation by the owner. If such mechanisms do not work, then the entire so-called urbanization rent is taken over by the landowners. They become the beneficiaries, while the losers are the rest of the city. A special kind of loser is the local government, which, wishing to develop the city, has to find funds for investment, and can be legitimately accused of corruption by directing the investment pool this way or that. What's more, for them, urban development means only costs and vague tax revenues in the future, yet urbanization should be one of the sources of development funding. While in a small city everyone can see when the mayor converts his brother's agricultural plots to construction land and pours asphalt on the road to his son-in-law's house, these processes are more difficult to grasp in large agglomerations.


Ola Kloc: What could be the consequences of unbridled capitalist city development? How can we defend ourselves against it?

Janusz Sepiol: What is crucial for urban development is the model of housing policy, specifically the answer to the question of whether housing is a commodity or a social good. If it is a commodity, then the only barrier to quantitative development is demand, so anyone who impedes the development of housing is a public enemy, or at least an enemy of developers. It is likely that almost any number of apartments can be sold in Zakopane, Sopot, Kazimierz on the Vistula, and probably Krakow, and it is certainly impossible to determine this number in advance. However, the limitation should be environmental, landscape, infrastructure considerations, but this is not easy to do. If, on the other hand, housing is an asset, then needs must be realistically identified and initiatives must be taken at the local government level to realize facilities to meet these specific needs. Such construction must benefit from direct or infrastructural support. It will significantly "push out" commercial construction, because land resources are limited. This means that on selected properties some forms of construction will be allowed and others excluded. This is one of the factors limiting urban sprawl. However, it seems that with the rapid aging of the population and depopulation of our country, paradoxically, these problems will arise only in some areas of Poland. In many others, abandoned properties will become a problem, as we are already seeing, for example, in the Opole and Podlasie regions.

większa z wież kompleksu od podstawy do szczytu iglicy mierzy 220,67 metrów

The larger of the complex's towers from the base to the top of the spire measures 220.67 meters

Photo: patryk2710 | Wikimedia Commons © CC BY 4.0


Ola Kloc: If not a capitalist city, then what kind?

Janusz Sepiol: I was born in 1955, which means that I grew up and was educated in a socialist city. As a student and young designer, I saw its flaws over and over again. The most significant feature of the socialist city was the lack of land price and the extreme ease of expropriation of citizens. These two factors resulted in gigantic waste and irresponsible planning. The Great Self-Government (Municipal) Reform of 1990, prepared, by the way, by the urban planning community, headed by Professor Jerzy Regulski, was supposed to radically transform the urban economy, which, in a sense, it did. In a capitalist city, every square meter should have a landlord and "work," and private property should be strongly guaranteed. But despite this, some assessments of the urban processes of communist Poland have changed. This is a topic for a separate conversation.

I am not an enemy of the capitalist city, but I would describe my preferences as the option of a proponent of social market economy cities. Our Constitution, by the way, speaks of a social market economy. The ideal seems to be a city where every property has a clearly defined owner, every square meter is taxed in proportion to its value, urban planning is predictable and socialized, and real estate management is not a place for conquistadors and hucksters. Social, environmental and cultural goals are important, and urbanization finances much of its development.

Finally, I would like to recall the recently published book by Swedish historian of ideas Johan Norberg, "The Capitalist Manifesto. How the Free Market Will Save the World" (published by Grand Letter, 2024). This book emphatically explains why capitalism is not only successful, but morally right. When thinking about the capitalist city, it is worth keeping in mind his words that "capitalism has brought the greatest social and economic progress humanity has experienced, yet millions reject it. [...] By opting for capitalism in the world, we have nothing to lose but chains, customs barriers, restrictions on construction and confiscatory taxes. And we can win the whole world" (p. 257).

Ola Kloc: Thank you for the interview.


interviewed by: {tag:AuthorA&B}

more: A&B 09/2024 - CITY, ARCHITECTURE, CAPITALISM,
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