Mircea Baciu
More significantly, the Minister announced the Government’s intention to develop “policies that maximize both access to housing for young families and responsible spending of public funds that belong to all.”
A very balanced and correct approach that cannot but be supported. And it is very important that a similarly balanced approach is needed when developing the new real estate policy that Adrian Havrilice is talking about.
I agree with the position of the Minister of Finance and I would like to recall that back in January I sent an open letter to Prime Minister Alexandru Munteanu, in which I mentioned the need to develop new approaches to ensure the widest possible access of the population to quality housing. In that letter, I also mentioned the Prima Casa program, noting the need to modernize it.
Key measures for the new policy
Since it seems that this problem is becoming one of the main concerns of the government and a new real estate policy needs to be developed, I think it is important to mention some of the ideas I put forward earlier. They relate to both the competencies of city administrations and the competencies of central government agencies.
The first measure would be to auction small plots (0.5 ha). For this purpose, local authorities should form a reserve of urban land, divide it into plots of 0.5 ha and organize open auctions to which only legal entities and individual enterprises with proven experience in the construction of objects with an area of ≤ 10,000 m² would be admitted. As a result, the monopoly of large developers will be eliminated; small and medium-sized construction companies will be attracted to the market; the supply and diversity of projects will increase.
Another necessary measure could be the development and adoption of new urban planning plans with the sale of plots within the city limits or in municipalities. This will result in the reclassification of agricultural land in the suburbs into residential areas; the allocation of large neighborhoods that will be divided into sections for different developers but with a unified infrastructure plan. In this way, the shortage of land in the city center will be reduced; land prices in the center will be limited; and demand will be redistributed.
Another measure could be the creation of new neighborhoods with turnkey infrastructure. City authorities could build roads, communications, social infrastructure facilities (schools, kindergartens, medical centers) independently or jointly with investors before the construction of housing. As a result, the attractiveness of suburbs would increase; young families would get affordable housing with developed infrastructure.
It is also necessary to simplify and speed up the issuance of building permits. A solution in this regard could be the so-called “single window”, where all approvals (town planning, network connection, environmental impact assessment) would be processed through a single electronic portal.
An important step to stabilize the market could be the introduction of a tax on quick resale (following the example of Ukraine). It could be set at 6-10% of the value of real estate owned for less than three years. As a result, speculative transactions would be reduced and the market would become more stable. This tax could be temporary – for example, for three years.
Another measure could be the launch of joint projects between the state and developers within the framework of public-private partnership. In this way, housing construction with state participation would be stimulated, which would accelerate the expansion of supply and ensure socially affordable housing without overheating the market.
If these important points (or at least some of them) are taken into account in the development of the new real estate policy mentioned by the Finance Minister, I am sure that positive results will not be long in coming. Thus, people will have much better access to comfortable and quality housing.
Mircea Baciu,
entrepreneur from the Republic of Moldova
