Many media recently cited a statement by the Statistical Office of the Republic of Serbia that the number of construction permits issued in June 2021 has risen by a third compared to the same period last year. Four-fifths of the permits were issued for buildings, of which as many as three-quarters residential. Although this news could be interpreted as positive, it also gives reasons for worry.
According to the European Union’s Statistical Office (EUROSTAT), Serbia has for years been one of the top countries by housing cost overburden rate and overcrowding rate. For example, while in 2019 every tenth Finnish and every third Italian household were overcrowded, overcrowding rate in Serbia was constantly between 55-60%. The housing stock is also neglected, and the buildings are often insufficiently equipped with adequate communal infrastructure.
At first glance, the increase in number of new housing units may seem to contribute to solving these problems.
In addition, more issued permits may translate to an increase in the volume of financial value of construction works that will be realized soon. That would, then, indicate recovery of the construction industry, a driving force of the economy, which creates jobs and engages numerous accompanying activities. According PlanRadar, the value of construction works in Serbia was on the rise from the second half of 2017 until the end of the first quarter of 2020, when it declined due to the coronavirus pandemic. (It should be borne in mind, nevertheless, that the number of permits grew as early as the end of 2020.)
But there are also good reasons for concern about this kind of news. The mere increase in the number of housing units in Serbia does not by default mean an increase in the number of apartments available to citizens with unresolved housing issues. According to the data provided by the Statistical Office of the Republic of Serbia, a quarter of Serbia was at risk of poverty 2019, while a third of citizens were at risk of poverty and social exclusion. Half a million citizens live below the poverty threshold. The loss of jobs and the current dizzying rise in the prices of essential commodities will push many more into these categories. New apartments, a miserable percentage of which is being built to meet the needs of those without a home, will remain a distant dream for them.
New apartments will be increasingly unavailable to the less endangered socio-economic categories, too, as their prices continue to rise. A model of the market economy for preschool age might try to make you believe that apartments will inevitably turn into more financially available, less exclusive goods as more apartments reach the market. However, in real life apartments are becoming even more expensive – since in reality, in addition to potential future tenants, actors who want to secure their finances by investing in real estate, and different types of speculators, also appear as buyers.
In May this year, money laundering experts from the Global Initiative against Transnational Organized Crime (GI-TOC) published a report claiming that the rise in prices of housing and business space in Serbia was caused by money laundering. The National money laundering risk assessment, a study prepared by the Ministry of Finance, doesn’t refute GI-TOC’s claims. At the same time, there are growing indications that financial actors are investing in real estate to hedge against possible fluctuations in money markets in the face of a pandemic-induced economic crisis.
In its need to territorialize and be laundered, capital changes the built environment in ways that are difficult for residents to control, but towards which the authorities are mostly benevolent. As the architect and urban planner Iva Čukić warned at the recently held tribune “Belgrade under siege of investor urbanism”, urban plans that define what and where may and may not be demolished or rebuilt are changing so fast that even experts can’t keep track.
Čukić stated that in the first half of 2021, as many as 60 detailed regulation plans were adopted in Belgrade, i.e. three times more than the annual average. It is also illustrative that the City of Novi Sad Development Plan for the period until 2030 will most likely be adopted this year, without early public insight being organized even pro forma. Members of the civic initiative that demands early public insight say that the authorities simply refer to the fact that the Decision on drafting the Development Plan was made in 2009, while the old Law on Planning and Construction, which did not provide for the institute of early public insight, was valid.
The growth in the number of issued construction permits thus indirectly testifies to the changes in planning and building regulations that have gone out of (social) control.
The tragedy that happened in July, when a residential building in the municipality of Vračar in Belgrade collapsed because the neighboring construction site wasn’t adequately secured, testifies to how dangerous the adoption of plans and issuance of permits can be. Less noticeable, but long-term threatening for the functioning of the city is the overload of communal and traffic infrastructure, and the lack of accompanying functions, which increasingly occur due to the endless building of immediately profitable residential spaces.
In all this chaos, the disappearance of buildings and ambiences of architectural and historical value remains but a side remark. The daily newspaper Politika recently reported that the protection of the cultural-historical ambient “East Vračar” expired in December 2020, allowing for another house built in the 1930s to be razed to the ground. While the Belgrade City Institute for the Protection of Cultural Monuments announces that they are working on protecting the building next year, the Department for Construction and Communal Affairs of the Municipality of Vračar reacted more efficiently – and issued a decision on demolition.
Translation: Iskra Krstić
This article was ORIGINALLY PUBLISHED in Serbian on Aug 17, 2021.