Old blocks built during communism: Positive and negative elements of the country’s main residential option
Hello to everyone. One of my constant readers, Mr Pedro Matos, sent me a very interesting question. He is a foreigner living in Romania and asks something that thousands of people ask as well: What will happen with the old blocks of Bucharest?
Pedro’s question is here:
My question is simple: Do you believe there is a market for refurbishing existing homes and apartment buildings in Bucuresti? Is this a viable option, both in technical,economical and social terms? Or will these thousand of “bloc” buildings from the ommunist era will just have to be demolished over time, in order to make room for newer, modern apartment buildings? Also, how do you rate the possibility of urban sprawl, or the increase of suburban areas in a city like Bucuresti in 10 to 20 years time?
(Please keep in mind that the following analysis is based on Real Estate point of view, I am not an architect or engineer, or urban development expert in order to see things from their own point of view).
Old blocks: Actual status
Romania (and Bucharest in particular) is full of thousands of old communistic blocks. They exist everywhere and represent the most visible sign left by the previous regime and its way of thinking. This was a major social housing programme, which added new neighbourhoods in all the cities of the country (in Bucharest: Titan, Militari, Drumul Taberei, Berceni etc), injecting also blocks even in areas which had a different specific.
Today we can say that we have 3 categories of communistic blocks:
- The ones constructed before 1970. They are built all around, even in the most “expensive” areas. The level of quality was usually determined by random reasons, but the result is always the same. Many of them have serious damages by the 1977 earthquake, plus they have reached / exceeded their expected “life circle”.
- The ones constructed at the late 60s until 1977. They were better than the previous ones, but without “dramatic” improvements. They are also about to reach their “life cycle” quite soon.
- The buildings constructed after 1977 (and especially after 1980). This is the “most searched” category of old buildings. Not only they are newer, but also they have been developed following the new strict regulations that Romania implemented after 1977 earthquake. If they are just “a bit” refurbished, they are considered as the best option for investment, even better than some new ones too.
- More or less, the quality of construction is good. After 30 – 60 years, they are still here, hosting millions of people, despite the minor problems they all have. “At that time, they used to build safer buildings, not like today” many people say and they are not wrong.
- They are located in all the best locations of every city. Close to center or a park, next to metro and other transportation means, these blocks are part of Romanian urban development. They were the main component of the country’s housing programme.
- Lower maintenance costs. Heating is cheaper than in the new buildings, plus all the other costs are lower as well. During an economic downturn, every Euro counts.
- No time to wait, no major risk to undertake. They are… ready. After all the scandals of people losing their money in new projects, old apartments appeared to be a “safe and fast” solution for everyone.
- “Better the devil you know”. Don’t laugh, but I hear many Romanian friends of mine telling me that they prefer to buy an apartment in an old building, as they are familiar with everything regarding this and they know what to expect. This does not happen in the new blocks, where many people found themselves dealing with unexpected problems.
- They are (supposed to be) cheaper. Their “official” price is lower than the one of a new property. (But usually people forget to include the cost of renovation etc).
Old blocks: Negative elements
- They are old! As simple as that. No matter what you do, time runs against them and their future value.
- Their construction has been there since some decades already, so their future resistance is usually questionable. Especially the non consolidated buildings, constructed before 1977, are very probable to cause problems to their owners in the future.
- No parking lots available. They were constructed during an era when the word “traffic” was unknown and the number of cars was very limited. This is why nowadays in the areas with lots of old blocks the words “easy parking” are considered a joke. (But don’t forget that many people like to park, but only for free, so they would not appreciate a paid parking lot).
- Interior decoration according to… “communistic style”. They were built for different people, with different needs. This is why nowadays many of them simply don’t match with our actual needs (even if we pretend to forget this, saying loudly that there is no problem).
- Endless “small” problems. Pipes and wires have been destroyed after decades of use and need to be replaced. Some neighbours simply don’t respect any rule or law (or even themselves). Buying an old apartment means that you buy it “accepting its unknown past too”.
- They usually need extra money for interior refurbishment and consolidation. When you calculate the costs, why don’t you add the renovation cost? I know people having paid +40% of the price they bought an apartment “in order to renovate it”. But like this, they paid even more than the price of a new one (but also some new ones need renovation too, unfortunately). What about consolidation of the building? Sooner or later you will pay for this too.
- Except the properties in top locations, all the rest will see their price constantly dropping. What do you expect by a building of 40 – 50 years old? To keep its price high forever? Maybe even to grow? It is normal that except the buildings located at very good locations, all the rest will see their value depreciating over the years to come. Why? Because sooner or later there will be more new blocks in the market, better developed and more affordable for people. The demand will partially be directed to them as well.
The era when you just needed to have a stupid property, paying 0 to maintain it and see its value rising every month is over. This decade will mark this change in Romanian market (either some people like it or not).
What is your personal opinion?
Tomorrow: What should we do with old blocks? Refurbish or demolish them?