Demolish and rebuild: Give initiatives to investors. Rebuild our cities (Part 2)
Part 2
(to read part 1, click here)
This was the news on Thursday. Everyone was talking about it. A… "brave" Spanish investor decided to demolish his building, located at Calea Floreasca (Bucharest) and build a new project in its place. You can read the news here.
As usually, lots of people commented only on the potential of the investor building more sq.m. In their mind, this is just about "him having profits", which is still a "sin" for many members of this society. But except the shallow critics, let us try to understand a bit better what is this property we refer to and why the owner decided to proceed in such abrave decision…
Yesterday we checked why this decision was good for the investor (to read this text, please press here). Today let us identify if it is good for the city itself and why should this be our strategy for the years to come:
Why this decision is advantageous for the city of Bucharest
This decision is very advantageous for the city of Bucharest as well. Once the new building will be ready:
An older, ugly property will be replaced by something definately more beautiful.
A building built according to 1998 – 2000 standards will be removed and another one, following 2011 – 2012 norms will be developed.
More parking lots will be created.
The authorities will be able to implement their latests norms and restrictions.
The newer buildings are more "environmental friendly".
And the most important of all: This action gives the example that every healthy citizen would appreciate. It helps the city to change, to improve, something that it would be difficult to achieve just by itself.
Shouldn't we try to demolish the old ugly buildings and replace them?
Since I first came in Romania and started working in this segment, almost all foreigners who visited Bucharest told me that the city is nice but there are many old, ugly blocks that have to be demolished. Many of them also reminded me about the "life cycle" of cement and they considered that this would be the only solution for the capital city of Romania. "All these blocks will fall down, sooner or later" they say, but so far very few of them were even painted or refurbished.
I know that this is something difficult, maybe not even viable when there are many owners in the same building. But I think that this should be the direction, to find ways in order to demolish and replace most of the old blocks in the following 10 – 20 years.
What is missing: "Brave" – long term investors + some inititiatives, in order for many people to start thinking about it more seriously.
Give initiatives to investors: Improve our cities
I googled this news about the Spanish investor and his plan to rebuild his property. I saw very high numbers of readers, plus hundreds of comments in all kinds of sites. As I was expecting it to be, there are too many people who just consider the Spaniard as "one more smecher, who searches for easy money". Of course all these persons would do the opposite, if they would be at his place: They would simply stick on their property, refusing to invest 1 (one) Euro in it, waiting for a victim to offload it.
But they are not the only ones in this country. There are plenty of others who understand that a city can be improved only if people will invest in it.
And in order to see more "brave" people like this investor, we should give strong initiatives. There are many ideas to use, in order to stimulate someone's decision to demolish an old building and re-invest :
Tax excemptions. Dont give money in hand, but let people pay less taxes, once they invest their millions in re-building old properties.
Lower (or no) local taxes.
Higher coefficient to build. Some more sq.m. (under the legal procedures of course, having more parking lots etc) can really make the difference in a business plan for someone who thinks about demolishing a property and rebuilding it.
Faster procedures. A normal procedure for obtaining all the necessary documents for such a project would last 8 – 18 months, depending on the period of the year, the mood of the persons in charge, at which municipality the property is located etc. Speeding up the time frame would make it more appealing for investors to think about it.
State's guarantees for bank financing. Prima Casa is good, helps thousands of people. But why not to create a similar project, providing State's guarantees for 30 – 40% of the total investment of such a project? Someone who demolishes his building and re-builds it from scratch is the definition of serious investor. Why not to help him do this and improve his city as well?
The Spanish investor showed us a healthy approach of Real Estate and investments in general.
Let us use this example, in order to plan the improvement of Romanian cities.
This is how things can improve, on the long run. With actions, not just words or "nice intentions"…
What do you think?