Tens of thousands of new apartments have to be built every year in the ten largest growth centers to meet the needs of immigrants. There were more than a million square meters of empty office space in the capital region waiting to be used even before the corona virus. Hundreds of new wind turbines will be installed on the coast and in the fells to enable a carbon-neutral energy breakthrough.
How do rapidly changing needs, cities that have already been built once, and sustainable growth fit in with the legislation on zoning and permits?
The overall reform of the Land Use and Building Act has been underway for a few years, and the initial ambition has been lost along the way. The draft versions of the bill, which will be submitted for comment in early autumn, portend more and more complicated regulation, while the original goal was to achieve flexibility and speed up.
The responsiveness of our zoning system is not sufficient. In growing cities, it is especially challenged by supplementary construction and project orientation. It is no longer possible to zone only new virgin areas, but a large part of new apartments and other new construction is located in areas that are already inhabited and in use.
The need for planning starts more and more often as a project, and already about half of the plans in large cities are project-oriented. Extension construction largely depends on the property owners' desire to start projects.
Although property owners already have the opportunity to take initiatives and participate in planning, the rights should also be recorded in the law. Clear principles are needed for the processing of initiatives and the preparation of the property owner's plan, so that the process is transparent and efficient in all municipalities.
Consolidating the urban structure and reducing empty spaces are also climate actions. All resources must be used for additional construction and changes in purpose of use. The municipality can take advantage of the work of a private operator, but the municipality still always has a formula monopoly, i.e. control and decision-making power. The municipality's role should be above all strategic and goal-oriented.
The detailed requirements of station plans are currently the biggest factor affecting construction costs. In addition, they often lead to the site plan deviation procedure, which slows down the project and increases costs even more. In partnership planning, economic and functional solutions can be found in cooperation and the interests of different parties can be reconciled.
The land use fees paid to the municipality also affect the viability of the projects. The land use agreement system proposed in the law does not give the landowner the means to assess the profitability of the project in advance. Land use fees must be predictable, reasonable and clearly justified, and correspond to the actual costs incurred by the municipality.
The maximum amount of the development compensation collected by the municipality from the increase in the value of the land is to be increased from 60 to 70 percent. This further weakens the incentives for additional construction, even if there is a need to increase them.
The law was supposed to simplify the planning system, but now a completely new plan level, the urban regional plan, is being added to it. Regional planning is necessary in many areas, but it should not be passed into law. At worst, the project could be in conflict with both the urban regional plan, the master plan and the site plan. If all three levels had to be changed one after the other, it would take up to ten years.
The most important thing for companies is the predictability of the processing times of the authorities' decisions. The authorities must be obliged to provide an estimate of how long the planning procedure will take. The law also requires a deadline for permit processes. In complete contradiction with predictability is the intention to expand the right of appeal of ely centers through legislation.
Zoning and licensing have a significant impact on housing construction and the supply of housing, the location of jobs, the availability of services and the start of investments. These, in turn, are crucial for economic growth and employment.
The previous major reform of the Land Use and Construction Act was twenty years ago. Finland cannot afford to wait for the next time, but the necessary changes must be made now.
The importance of the law is illustrated by the fact that nine other business organizations took a stand with us in favor of these changes at the beginning of June: Finnish Confederation of Business, Energy Industry, Finnish Trade Federation, Central Chamber of Commerce, Finnish Federation of Agricultural and Forestry Producers MTK, Tourism and Restaurant Services MaRa, Finnish Real Estate Association, Finnish Entrepreneurs and Planning and consulting companies SKOL.
Aleksi Randell
managing director
Confederation of Finnish Construction Industries (CFCI)
Jyrki Laurikainen
managing director
RAKLI
The text has been published in Kauppalehti On the debate section 21.6.2021
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