The Integrated Investment Plan (IIP) is an opportunity to develop a new quality of urban planning in the spirit of partnership between municipalities and developers. Provided there is a reevaluation in thinking about dialogue as a recipe for good public space. "Conflicts are inevitable and even natural," says Pawel Pucher, an attorney and partner at the KKPW law firm. We talk to him about the hopes and risks of ZPI.
PawelPUCHER - Graduated from the Faculty of Law and Administration at Jagiellonian University in Krakow. Participant of specialized courses in various fields of law in Poland and abroad. Specializes in civil and economic law, as well as issues of spatial development and construction investments.
Ania Diduch: ZPI and lex developer complement or exclude each other? Can we talk about the advantage of one over the other? Which of these solutions is more advantageous from a formal perspective, and does ZPI create partnership conditions for municipalities and developers, or does it favor one side of spatial planning?
Pawel Pucher: Currently, both solutions, i.e. the possibility of applying for a resolution on the location of a residential development project (ULIM) under the housing special law (the so-called developer's lex) and the possibility of applying for an integrated development plan (ZPI) under the provisions on planning and zoning, operate in parallel. Therefore, it is not surprising that the question often asked is which one is better. However, the answer depends on who is asking it.
When comparing the two institutions, it is always important to remember that although they serve similar purposes, they are not the same. Their dissimilarity concerns both the legal effect (ULIM is treated like a zoning decision, while ZPI is a special type of local development plan), the type of investments they can affect (ULIM only residential, to a small extent mixed-use), and the course and duration of the procedure (the procedure for ULIM is much shorter).
What particularly distinguishes ZPI from ULIM is the obligation to guarantee the municipality, in connection with allowing the investor to carry out a certain investment (the main investment), certain benefits, whetherwhether in the form of an obligation to carry out a complementary investment, or other benefits stipulated by law and established in the urban planning agreement, or both. In this sense, the MIP procedure more strongly addresses the needs of the municipality, reducing the risk of adopting solutions that will benefit only the investor.
Ania Diduch: Are municipalities prepared to use this new tool efficiently?
Pawel Pucher: Not very well, and this is mainly due to the previous practice of municipalities. The MIP procedure is based on the assumption of a common interest with the investor in working out an acceptable and beneficial solution for both parties, as well as other stakeholders (residents, social organizations, etc.), in the course of negotiations and public consultations. This requires openness, readiness for dialogue, concessions and acceptance of certain obligations with measurable financial consequences. This is neither a common nor typical in our country way of arriving at certain decisions on the investor-administration line. This seems to me the weakest link in future MIP procedures, rather than, for example, substantive, organizational or financial infirmities.
In many municipalities I notice considerable hopes and expectations connected with this procedure and preparations made for its most effective application, but there is no shortage of those where an atmosphere of distrust and skepticism prevails, probably having its sources in the bad name that the housing specustaw (so-called "developer's lex") has gained, partly unfairly. lex developer), which the ZPI procedure is intended to eventually replace. This distrust, to put it mildly, sometimes translates into a lack of interest in the tool.
Ania Diduch: ZPI has two components: main investment and supplementary investment. How do they differ?
Pawel Pucher: The main investment is an investment planned by an investor, which he would like to implement in an area where, due to the lack of a local plan or due to the content of the current mpzp (master plan), it is not formally possible, and for this purpose he submits an application to enact a ZPI. It can be any investment: manufacturing, service, residential. The law does not impose restrictions here. In the case of a complementary investment, the implementation of which within the ZPI is mandatory, it is different. Complementary investment is the construction, change of use or reconstruction of the types of investment strictly indicated in the Law, for example, land development networks, public roads, public transport infrastructure facilities, cultural activity facilities, kindergartens, schools, health care facilities, sports and recreation facilities, public green areas, construction facilities for commercial or service activities. This catalog is closed and, although quite broad, it lacks, for example, facilities for residential or defense purposes.
Ania Diduch: Can we already talk about the first effects of the introduction of ZPI? What makes up a well-prepared and functional ZPI?
Paweł Pucher: As far as I know, at the time we are having this conversation (August 2024), no municipality in Poland has yet enacted a ZPI. In many cities, investors have submitted their first applications for ZPI enactment, and I know of more than a dozen such cases, mostly in smaller cities, although they have also been submitted in Krakow. I myself am currently preparing (in cooperation with architects and urban planners) several applications for ZPI in two cities. The procedures, depending on the city, are at different stages. In some cases, such as in Krakow, the municipal council has not yet passed a resolution authorizing the start of MIP, in others the council's consent to proceed is already in place and arrangements and public consultations are underway. In individual cases, urban planning agreements have already been concluded, but there is still no municipal council resolution approving the ZPI. It is therefore too early to judge whether MIPs are or will become a new quality, or at least an added value, in the spatial management or investment process. Everything will depend on the practice that develops, although the potential in this tool, despite some of its shortcomings, is very high. Let's hope it is not wasted, because interest in ZPI is so far very high.
A noticeable effect of the introduction to our legislation of this special form of zoning plan adopted at the request of the investor is a return to thinking about the investment process in cities in terms of dialogue, rather than a struggle between the investor and the authorities or administration. It is important that the ZPI procedure creates space for negotiations between the municipality and the investor and a clear legal basis for requiring the investor to provide certain services and maintain certain standards in exchange for the possibility of carrying out an investment in an area where it would not be possible due to the lack of a local plan or its content.
Ania Diduch: Please comment on the state of spatial planning in Krakow on the eve of the ZPI.
Paweł Pucher: Krakow stands out against Poland in terms of the number of enacted zoning plans, which already cover more than 2/3 of the city's area, which is twice the national average. So in a formal sense it is not bad. Paradoxically, however, looking from the point of view of spatial order or the availability of land for investment, Cracow is not in a much better situation than cities where fewer local plans have been enacted. This is because these plans are often of an inventory nature, preserving the current functions of the areas in question, and do not contribute to freeing up more land for investment. Nor has Krakow so far lived up to local urban planning standards. It has to be said that the new authorities of Krakow not only declare a change in their approach to spatial management, but also take the first steps in this regard. As it seems, this is in line with the expectations not only of investors, but also of residents, who take a keen interest in these matters, as evidenced by the submission of a record number of applications - more than 20,000 - to the general plan of the city, which is currently being prepared to replace the study. Krakow, by the way, began drafting the general plan as one of the first large cities and stands a chance of completing the process in time for the statutory deadline.
Ania Diduch: ZPI leaves a large margin of discretion to municipalities - they can choose whether to approve the new plan or not. What are the protection mechanisms against corruption or favoritism of some local solutions over others?
Pawel Pucher: This is a very good question! The new tool, ZPI, changes nothing in the sphere of the municipality's so-called planning authority. It means that the municipality still retains full control over whether the procedure, despite the investor's prepared and submitted application, which, after all, may have required significant expenditures, will be initiated at all. Subsequently, at any phase of the process, until the urban planning agreement is signed, the municipality can withdraw from the negotiations, ending the proceedings without any negative consequences for itself. What's more, even after the urban planning agreement has been negotiated and concluded, of which the draft MIP must be an attachment, the municipal council may reject the MIP or reject it and at the same time indicate the changes it considers necessary to the urban planning agreement or the MIP, which means that almost the entire procedure must be repeated. These changes may not be acceptable to the investor, which will lead to the termination of the procedure either because the investor withdraws the application or the mayor withdraws from negotiations due to the inability to reach an agreement.
With such far-reaching powers of the municipality, both the mayor and the municipal council, the investor is "at the mercy" of the municipality. A solution that could reduce the risk of unequal treatment of investors or even corruption is for the municipality to introduce internal regulations clarifying the MIP procedure. This seems even necessary, since the legislator has provided for the necessity of the investor to incur expenditures in connection with the obligation to carry out complementary investments or the obligation to provide other services established in the urban planning agreement, but has not specified their scope or amount. At the same time, the parties (the municipality and the investor) were given the opportunity to shape the content of the urban planning agreement quite freely. The risk that one investor will be required to pay much more or less than another who makes a similar request can only be prevented by setting certain boundary conditions.
The new law assumes partnership cooperation between investors and municipalities, but does not propose specific procedures for its enforcement
photo: mwitt1337 © Pixabay
Thus, on the one hand, it is worth indicating the scope of information required from each investor about the planned investment, on the other hand, it is necessary to establish a framework or rules for determining, in the course of negotiating the urban planning agreement, the dimension (scope, value) of the investor's obligation to carry out the complementary investment and the obligation to perform other services for the benefit of the municipality. It is important that these rules be transparent, uniform for all investors, as precise as possible and referring to clear criteria. It is good that the general expectations of the municipality regarding the types of complementary investments are also known, as their statutory catalog is broad, and they certainly shape very differently depending on the municipality, city or district. The same applies to other potential obligations of the investor that may appear in the urban planning agreement, such as obligations to transfer to the municipality part of the main investment, for example, part of the completed facilities, including residential units. In addition, it is worth taking care to coordinate the entire MIP process on the municipality's side, because it consists of many steps and requires the participation of many entities and units that agree, give opinions and conduct negotiations and public consultations.
I would further emphasize that the internal rules for conducting the MIP procedure should also cover the stage before the investor submits the application. The application must be accompanied by a draft MIP covering both the main and supplementary investment. In the case of large-scale planned investments, the preparation of a ZPI project can be time-consuming and costly. It is rational that, before incurring these costs, the investor should have the opportunity to pre-determine how well its intentions fit into the current policies and needs of the municipality, and that it should not plan a complementary investment in the dark. As a result, this will shorten and streamline the entire MIP process, in which the municipality also has an obvious interest.
ZPI is an opportunity for win-win situations, where municipalities are clear about their needs and developers are legally obligated to comply with the local plans provided for public space - however, the success of ZPI will depend on the ability to have a dialogue between the two sides of the investment
photo: Jack_Jiao © Pixabay
Interestingly, in the case of a very similar institution to the ZPI, the local revitalization plan, regulated by the same law, the regulations are more detailed. They show, for example, that the dimension of the investor's obligations to the municipality established in the urban planning agreement concluded by the investor with the municipality in connection with the enactment of this plan is to be proportional to the increase in the value of the property as a result of the enactment or amendment of the local revitalization plan. The law also includes a delegation to specify by regulation the scope of information with which the investor must describe the planned investment. With regard to ZPI, such solutions are lacking.
Ania Diduch: The new law does not say what part of the main investment the investor should transfer to the city. Do you have a suggestion as to how this should look in practice in order to proceed optimally?
Pawel Pucher: Understanding the question literally, I would start by saying that transferring a part of the main investment to the city is one of the possible obligations of the investor under the MIP procedure. However, this does not mean that it will always take place. What form the transfer of part of the main investment will take will depend on what the main investment consists of (what type and function of the facilities), what the current needs and expectations of the municipality are, what legal form of this transfer will be determined between the parties to the urban planning agreement, taking into account the type and scope of the main and supplementary investments.
Ania Diduch: Based on your experience - what generates the most conflicts between developers and municipalities?
Pawel Pucher: These conflicts are inevitable and even natural. It would be naive to expect that they can disappear. However, it is necessary to create conditions for their mitigation and resolution. Usually, their source is the lack of opportunities for dialogue and negotiation between the needs of the municipality and the investor's desire to maximize profit at the expense of the quality of the investment, for example, by maximizing the development area or the area for sale.
Since we are talking in the context of ZPI, it is worth noting that precisely ZPI can be a great tool to "defuse" and mitigate these conflicts. This is because the procedure provides a space for negotiation and dialogue about the investor's intentions and how to implement them, as well as to work out a solution acceptable to both parties and other stakeholders, such as residents or community organizations.
Ania Diduch: Is there a universal recipe for good public space?
Paweł Pucher: As a lawyer, I would answer that such a recipe is what the legislator is trying to create by defining the general concept of spatial order, identifying it with such shaping of space that creates a harmonious whole and takes into account in orderly relations all functional, socio-economic, environmental, cultural and compositional and aesthetic conditions and requirements. Filling this statutory definition with more concrete content, a number of requirements are established in the regulations, which must be taken into account in land use planning and development. However, these requirements are not always translated into the way investors act and the practice of creating and applying the law, especially in the area of issuing spatial planning acts and administrative decisions.
Ania Diduch: In addition to ZPI, spatial plans and lex developer, what other tools does the city have to efficiently plan inclusive, friendly and functional spaces?
Pawel Pucher: The quality of spatial planning is likely to be influenced by general plans, which by the end of next year are expected to replace the municipality's zoning studies and, unlike the latter, will have the force of a local law. It is good that urban planning standards will be an element of the general plan, it is a pity that they will be limited only to a catalog of planning zones defined only by functions and a few basic parameters. The establishment of local standards for the accessibility of social infrastructure in the general plan is not mandatory, may municipalities reach for the opportunity to establish them as often as possible. Also, the municipality's development strategy in the current state of the law takes on greater importance in the spatial management process.
Municipalities should also take a more proactive stance not only in enacting new plans, but also when it comes to local plans already in force, although of course I understand the limitations resulting from the scarcity of financial resources. To date, municipalities have rarely carried out a systematic review of plans already enacted on their own, which has led to plans remaining on the market for many years that should have been amended long ago, for example, indicating many areas, even in city centers, with agricultural uses that have not been used for such purposes for years. The current regulation directs the municipal council to review the assessment of the timeliness of local plans and, in the future, the general plan once during the term of the municipal council.
The bane of planning processes is also the lack of coordination with neighboring municipalities, which in the case of areas on the outskirts of cities, bordering with neighboring municipalities, often produces poor results at the level of spatial order. It is worthwhile for municipalities, despite the lack of a legal obligation in this regard, to try to take this aspect into account when proceeding with local plans or general plans.
Ania Diduch: Thank you for the interview.
interviewed: Ania DIDUCH
more: A&B 09/2024 - CITY, ARCHITECTURE, CAPITALISM,
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