How To Get A Better Deal On Land In Honduras

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1 The Winner Takes All? Market-based Instruments for Sustainable Spatial Development in Hungary Erzsébet Beliczay and János Pál Budapest, 08 July 2010

2 Some activities of the CAAG on spatial development and land use issues First international conference on the threats of shopping centres 1991 Recommendations on planning regulations of shopping centres 1997 Study about the real estate bubble together with the ITDP (New York) 1999 Conference on Brownfield Reclamation (2001) The need for social housing (GBR study, Hungary 2004) The true costs of urban sprawl (study, 2006) Evaluation of urban biodiversity in the 6th district (2008) Urban regeneration in Budapest (study, 2009) Economical instruments of sustainable spatial development (study, 2009)

3 advany/hook-banking1.htm THE OVER-DEVELOPMENT OF REAL ESTATE IN CENTRAL EUROPE AND THE RISKS OF FINANCIAL CRISIS A POLICY PAPER BY THE INSTITUTE FOR TRANSPORTATION AND DEVELOPMENT POLICY DR.WALTER HOOK, EXECUTIVE DIRECTOR NOVEMBER 29, 2000

4 János Pál: The True Costs of Urban Sprawl Clean Air Action Group 2006

5 András Lukács, Lázár Pavics: Tax fraud with car travel expenses and other tricks Lélegzet Foundation Clean Air Action Group 2007

6 Zoltán Szabó: Evaluation of urban biodiversity in the 6th district (Terézváros) Lélegzet Foundation 2008

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8 Transition period Municipal law 1990 (misused subsidiarity) Buyers market (caused by peculiar Hungarian privatisation) Weak institutional framework Leakages in the legal framework Lack of appropriate cadastral system and land register Controversial land prices (brownfield vs greenfield areas) Unripe financial market Urban sprawl (polluted downtown, underfinanced municipalities, inland migration, cheap land prices following the compensation, hidden subsidies on motorisation) After 2000: subsidies for housing without subjects to environmental conditions After 2006: irresponsible access to credits and options for mortgage

9 D e m o n s t house r and replacing it with an 8+4 stories condominium a in the World Heritage puffer zone t i Demonstration against demolishing a 150-year-old

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12 Foto:P. Kézdy Urban sprawl near Budapest (Budaörs)

13 Myths about the benefits of foreign real estate developments All the same what kind of foreign investments come to Hungary; International firms bring always high managing (working) standards; Investors leave for other New Member States when not getting the demanded priviledges; Proper regulation and long term planning are old fashioned tools from the socialist area.

14 Average payback of real estate development years in the EU12 8 years in South America years in the EU15

15 Examples for failed regulations The Tétényi plateau an EU-wide unique steppe biocoenosis belongs to 4 municipalities: The part in Budapest became a Nature Protected Area, the other municipalities converted their parts to built-in areas

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18 The patterns of traditional low density quarters have been destroyed

19 Poster made by civilians (demonstration against selling the park near a lake): Planned mall, parking place, new buildings, playgrounds The only question left: Where is the (former) park planned?

20 Erzsébet Beliczay, János Pál: Economic Tools for Sustainable Spatial Development Clean Air Action Group Breath Foundation 2009

21 Proportional taxes, fees, charges needed Mining Fee for building materials Depo (Waste Dumping) Tax Soil Protection Fee (Theoretical) Value of the protected plants and animals True costs of motorization (congestion charges, road pricing) True costs of the infrastructure on low density suburban areas (investment + operational costs of public utilities and other services)

22 Very low mining fee

23 Landfill tax and compulsory in situ waste selection needed

24 Theoretical evaluation of the protected plants animals and other natural values (landscape, relief etc.) needed

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26 Demonstration against building a new greenfield cement factory (while abandoning the old one nearby)

27 GOOD GOVERNANCE to internalise the external costs of real estate developments 7 m 2 new playing ground or park for each newly built apartment or office space Spatial Development Agreement Sport Law (financing sporting facilities)

28 Only parking places have to be disposed at new buildings according to the Hungarian building regulation. The poster s message: 7 m 2 new park, playing ground have to be created for each new unit (flat, office or retail space)

29 In some districts of Budapest there is less than 1 square meter public green area per capita left for the inhabitants.

30 Sounds like a tale but true: A Hungarian enterpreneur established an IT development centre. He erected voluntarily a bigger green park among the offices than the zoning minimum. He told that the costs of maintaining the park is about 4% of the costs of wages. But the employees appreciate the parks more than a small rise of their incomes.

31 The winner takes all? Hidden subsidy for developers: unexperienced governance is unable to protect the common interest.

32 One reason of the weak Hungarian Football

33 More than 68 big sporting facilities disappeared from Budapest since 1990 The privatisation is a hazy period of recent history. Public assets often landed in private hands without control (because of unripe governance). The sport grounds of the state owned factories as they had the same topographical register number were sold in package with the production sites and later were converted into dog training centre, parking lot, petrol station, residential park, shopping mall etc.

34 Gyula Grosics (team fellow of the legendary Ferenc Puskás) and András Lukács (CAAG) with local sport managers demonstrating against closing a football playing field at Őrmező (Budapest)

35 Thank you for your attention!