Despite of gray and cloudy sky for real estate sector nowadays in Poland, a ray of sunlight appeared in very beginning of 2009.  December 31st 2008 Polish Parliament (Sejm) finally adopted amendments to Law on Protection of Arable and Forest Land (unified text: J.L. of 2004 no. 121 poz. 1266 as amended – “The Law”) that has become effective since January 1 2009. Intention of these amendments seemed to be stimulation of construction business what could bring an essential impact in forthcoming uneasy times. Stimulation means removing some crucial administrative obstacles and to make process of investment in the cities visibly more facilitated.  
As key amendment appears article 5b that exclude provisions of the Law with respect to arable plots of land within administrative boundaries of cities thus its provisions are non -applicable. Being aware of all legal restrictions and administrative limitations arising from the Law that previously applied to every change of land’s purpose regardless to its location – amendment should be consider as crucial one. 

How to change the purpose of the land ?

Designation of every land should be adopted and described in local development plan of every Polish town or village – due to procedures arising from Local Development Law. Change of this purpose from arable or forest one to non – arable or non – forest every time requires amendment of local development plan what usually takes several months at least with no success guarantee as process of amendment depend on many various legal circumstances and authorities’ recognition. On the other hand the Law requires also consent to such a change of purpose of land issued by Minister of Agriculture and Development of the Countryside (for arable land of I – III classes), Minister of Environment, Natural Resources and Forestry  (for forest land) or finally Marshall of Voivodship ( for remaining areas). The consent is issued upon the motion of competent local authorities (wójt, burmistrz, prezydent) and requires Marshall of Voivodship’s opinion to be attached. While the consent is given and amendment of purpose of land is adopted in local development plan a green light is turned on for another step: preparing a motion on exclusion plot of land from agricultural or forest production. Such an exclusion is strictly related to the payment and annual fees for State Treasury as kind of compensation for limitation agricultural or forest areas. The payment and annual fees are set as an equivalent of specified number of tonnes of rye seed depending on arable class of land being excluded. Taking into account arable class and rye seed’s price – may be an essential amount.

Procedure of turning designation of land into non – agricultural (non- forest) – as summarized above - is consider as too complicated, time - consuming  and expensive. In relation to plots of land located in center of big cities it was often consider pointless. While the local development plan was not adopted (what usually took place) whole the procedure had to be passed even if on such a plot agricultural production had been given up before the years.

New regulations – new perspective

As previously said, last amendments to the Law remove all above legal restrictions in refer to arable plots within cities’ administrative borders. One may forget about special consent of highest level, exclusion land from agricultural production, annual fees etc. While local development plan for specified area at city is adopted it exclusively defines designation of the land. If it is arable one the only way to develop it is to amend  provisions of plan – but Ministry’s consent is no longer necessary. But when urban area is not covered by any master plan (that expired or had been never adopted) investor may just apply for zoning decision. When requirements of Local Development Law are met  - zoning decision has to be issued. Receiving a zoning decision due to new regulations means that land is able to be developed however construction permit must be obviously also obtained. It is worth noting that majority of Polish cities are not covered with local development plan ( or they are only partially) so applying for zoning decision remains usual procedure to develop area. One need to also remember that all Law requirements as abovementioned are still binding for countryside areas. 

What limitation of restriction concerning converting designation of arable urban areas may bring in near future? No doubts that facilitation of the process and reduce of redundant expenses may stimulate supply for developable plots of land that is still insufficient in urban area. For last few years shortage of proper and ready to develop real estates in Warszawa, Kraków or Gdańsk  was one of these crucial elements that has been pushing prices up to vertiginous level. That price level had to being compensate to investors by square meter’s rate in new apartments.. Nowadays regardless to global crises reasons, prices will have to be adjusted to the market value. On the other hand reduce of administrative bans and orders should enhance commercial and individual investors to make further efforts.