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The Prime – září 2021

By 22. 9. 2021No Comments

Petr Hlaváček: To survive this crisis, Prague must lead the planning process

The City of Prague has been in a residential crisis for some time now.

Its Deputy Mayor Petr Hlaváček didn’t actually use the word crisis, during our wide-ranging discussion. But he painted a picture of a city whose planning mechanisms are struggling to adapt to modern demographic trends and rising levels of societal wealth and economic disparity. The most obvious symptom of the crisis are the runaway residential prices: first for new flats and homes but more recently for all existing stock. It’s not impossible, after all, to pay over CZK 100,000 per square meter in a panelak. This would have been an unthinkable joke until recent years.

Prague is not alone in facing this crisis, of course. European capitals and their urban regional hubs have all been hit by the inexorable demographic wave of urbanization. Young people everywhere are flocking to cities, the larger the better. But each city is suffering in specific ways, depending on its particular situation. In Berlin, for example, a referendum is to be held on whether nationalize privately-owned rental flats.

Prague’s situation is precarious because this the people and institutions running it are only beginning to understand the nature of land, of real estate and of their value. Consider this stunning fact: When Prague transferred its land portfolio of 500,000 sqm to the Prague Development Company (PDS), it recorded a value of just CZK 58 million. It’s an absurd number, but it reflects the absurd way the city has historically managed its real estate. This is Hlaváček’s key insight and explains why he promoted the creation of PDS in June 2020 as a statutory organization of the City of Prague. Its primary tasks are to work out the true value of the city’s property and preparing city rental housing projects.

Because Hlaváček sees city-held land as the key to enabling Prague to regain control over its future development. “Our philosophy is a conservative philosophy,” says Hlaváček, speaking in English. “We treat property like the value of the city and we are not going to sell this value for a small amount of money.” To put it a different way, he sees land as something akin to hard currency: something of permanent value that must be used wisely in order extract maximum benefit.

The entire interview is available at https://theprime.cz/features/architecture/petr-hlavacek-to-survive-this-crisis-prague-must-lead-the-planning-process/