27.01.2007    The Panalyst Perspective

Welcome to our unapologetically opinionated look at business, finance and real estate in Krakow and Poland.

"Zoning rules and permissions in Krakow"

Panalyst offer a full consultation service on zoning related issues and the WZ process. Our plotfinder service also offers you properties which have already been checked by Panalyst to ensure they have the appropriate permissions and investment potential. Please fill in our Property Target Form and we will contact you with suitable projects.

Below we present an introduction to the zoning issues when looking to invest in land and other properties in Krakow. The information broadly applies to the rest of Poland but there can be differences.
Most of the plots which are on the market are freehold. Only 10% are leasehold and these are sold usually by the townhall or the government, not individuals. At the moment in Krakow there are 37,200 hectares in total in the defined city area. Note this does not include the bordering suburbs like Zielonki or Libertow which are a short drive from the city centre. There is a high level zoning plan for the city which states approximately what can be built where. This is called "Studium uwarunkowan i kierunkow zagospodarowania przestrzennego Miasta Krakowa" or roughly "Overview of Krakow' s rules and regulations for the town plan". According to this plan the town' s main architect and other townhall officials divide up the city map and state for each section what can be done with land, buildings, roads, public utilities and other zoning/planning issues. In some zones they are not yet covered by the townhall "plan", and in this situation individual owners of properties have to apply for a first level "zoning" permission on their specific property called a "WZ" or "Warunkow Zabudowy i Zagospodarowania Terenu". This states approximately what can be built or done on the land or building, but please note it is not a final building permission, it simply gives similar permissions to the town' s overall "plan".

So when looking at any piece of development property in the city the first question is:

"Is the property within the town' s zoning plan OR if not, is it covered by it' s own "WZ" zoning permission"

At this moment only 10% of Krakow is covered by the town' s zoning plan. The townhall predict that by 2009 this figure will increase to 30% and by 2025 the whole city will be covered by the zoning plan.

	2003	2004	2005	2006
Area of city covered by the town zoning plan (hectares)	795	904	1843	3300
Percentage of city covered by the zoning plan (%)	2,4	2,8	5,6	9,7

Diagram 1: Where the current zoned areas of the town are



Diagram 2: Areas of the city which are in the process of being zoned



Diagram 3: Future possible zoning plan by the end of 2008


Applying for building permission on any property is therefore a 2 stage process. First you must either have a zoning plan or a WZ decision. Second you can then based on the zoning/WZ permission apply for the final specific permission for the structure (Building, extension, renovation etc) you wish to construct (ie architect designed plans).

There are two therefore ways to begin the process of applying for final building permission on any property.

The first is to ask the townhall' s main architect is the property covered by the zoning plan? If yes, you then ask for the zoning plan maps of the specific area you are looking at and the explanatory document that the town will issue with the map. This document will give you more detail about what the town has already decided can be done there.

If no, the second way to start to apply for building permission is to apply to the town hall requesting a Warunkow Zabudowy i Zagospodarowania Terenu (WZiZT or WZ as mentioned before) eg "My plan is to build a family house/dwelling with garages and roads to the building on plot number x, street number y and area code z in Krakow. Is this acceptable to the town hall". Obviously before you send the application you would consult with your own architect who could advise you on the feasibility of your idea based on his experience and knowledge of town rules. Please note that the WZ application is a large pack of documents relating to the property.

Also remember that if the property is already covered by the zoning plan you cannot then change for example with a new WZ application the existing designation of the property.

Now we will explain in more detail the differences between a WZ permission and a zoning plan permission.

The planning zone usually covers larger areas, not specific properties. Only the town hall can create this, individuals and companies cannot and cannot influence the process. Individuals, companies and the town hall can apply for a WZ permission on a specific property. You can apply for a WZ only if there is no zoning plan on the property AND no plans to have a zoning plan in the area. An unfortunate example is where someone is halfway through the WZ process on his property and then the town hall decide to start cover the area with a zoning plan, in which case the WZ application must be cancelled completely. However once a WZ process is complete then the zoning plan cannot then replace or overwrite the WZ, but the WZ is only valid for approximately 2-3 years normally.

The zoning plan covers larger areas but it then contains very detailed information about what can be built in each section and subsection of that area. Here is an example of the type of information you would see for one zoned area:

1. In area x of larger zoned area z, you can construct apartment blocks with commercial units on the ground floor.
2. In area x there should exist a certain level of "building density", ie how many apartment buildings, how close together.
3. For area x guidelines on what you can do in the area, what you definitely can' t do, and what you might possibly be allowed to do.
4. For area x what type of roads should be in or around the property and what kind of utilities should be located to service the area and its functions.
5. What parts of area x should be used as park/green space and what parts should be available for public facilities.

A WZ permission which covers one particular property is similar but has a number of additional features and complexities depending on the individual property. You should always seek consultation when looking to purchase a property with a WZ.

When looking at properties which are zoned or which have a WZ permission consider the following advantages and disadvantages of both:

A zoned property
Advantages

• You know straight away what you can build and what you can expect from the property
• Once you have agreed with suppliers to your property (Utility companies) and completed your architect project, you are ready to apply for final building permission.

Disadvantages

• There is virtually no chance to change what can be done with the plot
• The town may interpret the zone guidelines differently to you, resulting in a slow rejection process for your application.

A property with a WZ
Advantages

• You can apply based on your own final building design and expectation for the property
• You can apply for any type of building, commercial or residential, but it should be in keeping with the surrounding area

Disadvantages

• Minimum time to wait to receive a WZ on a property in a city like Krakow is usually 1 year up to 3 years depending on the complexity of the plot location and surroundings.