The "Baulandvertrag"

The objective of the so-called “Baulandvertrag” (Building land contract) bill is, on the one hand, to increase the offer of available land in order to accelerate the creation of housing and, on the other hand, to curb land speculation and the unhealthy development of housing prices as far as possible.

The role of municipal planning in housing

The amended law of 19 July 2004 on municipal planning and urban development plays a key role in the context of an obvious housing shortage, as it regulates urban organisation and municipal development.

Considering the prerogatives that municipal autonomy grants to municipal decision-makers, this legislation determines the building potential in the different municipalities. This constitutes an essential prerequisite for the development of new residential districts.

The General Development Plan (PAG), which covers the entire municipal territory, determines the future urban development of the municipality.

From the "Negativplanung” towards the "Positivplanung"

Nowadays, once the land use has been determined in the PAG, the actual implementation of a construction project depends entirely on the will of the owners.

Indeed, the current PAG does not impose any binding deadlines within which owners must start construction work. As a result, land designated as buildable often fails to be used for its intended purpose.

Furthermore, municipal authorities classify land as suitable for building, ignoring the actual intentions of the owners in question. The classifications are therefore often based on the sole criterion of conformity with the general interest, without having a guarantee of urbanisation and housing creation within a specific time frame.

This implementation of municipal planning without a participatory approach involving the owners, known as “Negativplannung”, stands in contrast to collaborative planning, known as “Positivplanung”, which encourages landowners to actively participate in urban development.

The “Baulandvertrag”

The “Baulandvertrag” aims to accelerate the development of building plots as well as the concrete construction of housing by setting deadlines for the construction work.

Sanctions are foreseen when owners do not develop or build on their building plots within the deadlines set in the PAG. If they fail to start building housing within this period, all constructions on this land are prohibited for at least 6 years. Failing to respect the deadlines thus has a significant impact on the value of the plots. 

In addition to sanctions, the “Baulandvertrag” also creates new written requirements in the PAG.  These have the advantage of making the mechanism more transparent as the new requirements will be fixed in the PAG, a municipal regulation accessible to everyone.

Administrative simplification

Currently, the procedure for amending a PAG extends over a period of about 12 months.

In the interest of administrative simplification and in order to enable municipalities to adjust the aforementioned deadlines to the realities on the ground, the bill provides for the introduction of a simplified procedure for specific amendments to the PAG, following the example of the simplified procedure introduced by the so-called “Omnibus” law for the specific amendment of the “new district” special development plans (PAP).

In this way, the duration of the procedure for amending a PAG could be shortened to seven months, which will allow to facilitate and accelerate the offer of available land, leading to the creation of housing, including affordable housing.

Ministerial re-parcelling

Furthermore, the bill introduces a ministerial re-parcelling mechanism.

Re-parcelling can be defined as the regrouping and redistribution of land in order to reshape the existing plot plan to match the building plots as fixed in a PAP.

Practice has shown that the land covered by a PAP often has a complex plot structure and belongs to a large number of owners, which can often be a source of blockages in the creation of new residential areas.

The introduction of this new land consolidation instrument will remedy this issue.

From now on, re-parcelling will be done through a mandatory ministerial land consolidation if some of the owners disagree with a construction project.

Thus, at the request of the College of Aldermen or of one or more owners, the Minister for Home Affairs may reconfigure the plots of land to bring them in line with the prescriptions set by the PAP.

The funds of recalcitrant owners, which are necessary for the proper and rapid implementation of the PAP, may be moved and relegated to a later phase of the development. Unlike the current regime, where a single reluctant owner can block the urban development of an entire site, this new instrument will allow the execution of a large part of the PAP.

Ministerial re-parcelling will thus allow the implementation of new neighbourhood construction projects, even in the case of disagreement between individuals, to avoid the blocking of certain projects for years or even decades.