Issue 4, 2019. August-September

   

TRANSPARENT RULES FOR CONSTRUCTION

Tbilisi City Hall is reforming the construction permit process as part of the capital's new master plan, which prioritizes cutting back on the density of development in central neighborhoods. Investor.ge spoke with Deputy Mayor Maia Bitadze about the reforms and City Hall's future plans.

Nino Bakradze

For three years, from 2014 to 2017, construction in Georgia grew by 57 percent-and half of all new construction in Georgia took place in Tbilisi.

While Tbilisi City Hall welcomes development and new buildings, Deputy Mayor Maia Bitadze said the pace and chaotic nature of process was unsustainable and bad for the city.

So when Mayor Kakha Kaladze was elected in 2017, he started to reform the process, starting with how the city granted building permits.

One of his first moves was to cancel the so-called Zonal Council, which allocated special permits for developers or individual landowners. Most of the permits gave property owners the right to construct higher buildings than allowed by law.

After the changes, permit allocation became the purview of the urban department at Tbilisi City Hall. The number of allocated permits immediately dropped.

According to Bitadze, in the last 1.5 year about 200 such permits were issued, compared to 800 in in 2015, 2016 and 2017.

Transparency International's 2019 study of the construction business in Georgia shows that the construction business decreased by 0.3 percent in 2018, apparently due to the drop in the number of permits.

Bitadze said the impact of fewer permits will be felt for a long time, and will benefit the city's development. She noted that the old way of doing things - buildings and investment before public interest and strategy - "made Tbilisi a superdense city, and inappropriate planning caused the price of the property to drop."

In order to get construction permits now, developers should submit additional research on the environment (especially tree growth) and how a new building would impact the flow of traffic in the area. Bitadze says that this data helps city officials make rational decisions about building permits and avoid chaotic construction.

But Bitadze stresses that investment is still a priority for Tbilisi City Hall. "New regulations were discussed and agreed with our investors. There were no complaints from large companies about this process. Honest developers were in a bad situation, too, since new players got bigger coefficients and built higher houses near their buildings," she said.

Today there are still a lot of existing permits that need to be reviewed, she noted. City Hall tries to find new spots for developers who were granted permits to build high buildings in sensitive or overcrowded areas. Bitadze underscores that City Hall respects property owners' constitutional rights to their land. But she added that the city government is working to "convince developers that brownfields should be developed and derelict buildings should be replaced."

"First, we are looking for new spots for developers who have construction permits to build in Vake Park, or near to Turtle Lake, or Tabori Hill [overlooking Old Tbilisi]," she said.

The new master plan calls for developing the city within its current borders, although Bitsadze did not rule out that the city could expand in the future. "Right now we are focusing on the development of the left bank of the river and replacing derelict buildings in Varketili. We will prepare a master plan for this district and invite investors to participate in an open tender," she said.

Bitsadze stressed that the goal of the changes is to make the city a healthy place to live. "We feel that developers support us in this. They live here too and agree that the city is losing its value. It is very important for investors that City Hall has the same attitude toward any construction company and plays by transparent rules. In this way, investors feel that competition works. We will see the result of our new policy when there will be more green spaces."