Streamlining town planning: a necessary measure to boost housing provision

Access to housing remains one of the main challenges facing the real estate market. Although prices, interest rates and access to financing are often discussed, there is another factor that directly affects the final cost of a home: the difficulty and time required to transform land and launch new developments.

The Spanish National Commission of Markets and Competition (CNMC) has analysed this situation and believes that the complexity of urban planning procedures is limiting the creation of new housing supply.

Land can account for almost half of a home’s price

According to estimates included by the CNMC, land can represent up to 45% of the final price of a home. Therefore, any delay or additional cost involved in its development ultimately affects the buyer.

If urban planning processes were more efficient and streamlined, it would be possible to reduce costs, shorten development times and make it easier for new homes to reach the market sooner. This is particularly important in areas where demand is under the greatest pressure.

Spain has complex urban planning regulations, with numerous procedures, reports and requirements that can significantly extend project timelines. This is compounded by legal uncertainty, rigid planning rules and slow administrative processes.

Difficulties arise at every stage of the process

The problems are not limited to the granting of building permits. They begin during the planning stage, when certain land uses may be defined so precisely that it becomes difficult to adapt projects to changing social and economic needs.

In addition, modifying an urban development plan can become a lengthy and complicated process. In some cases, errors or defects in these plans may lead to their annulment and block specific developments for years.

During the urbanisation phase, technical and administrative requirements also accumulate, increasing costs and delaying the execution of works. Later, during the construction stage, waiting for the necessary permits can postpone the start of projects that already have financing and demand in place.

Environmental, heritage, infrastructure and other sector-specific regulations add further complexity. When there is not enough coordination between the different public authorities, duplication, contradictions and additional delays may arise.

Simplifying procedures to build more homes

The CNMC proposes reviewing and simplifying the urban planning system to make it more efficient, coordinated and predictable. Its recommendations include:

• Reducing the complexity of urban planning regulations.

• Making it easier to amend and adapt urban development plans.

• Improving coordination between the different public authorities.

• Avoiding duplicate reports and procedures.

• Speeding up the granting of building permits.

• Encouraging the use of responsible declarations where appropriate.

• Providing the bodies responsible for managing these procedures with adequate resources.

• Increasing transparency and legal certainty.

The organisation also proposes considering whether, in certain procedures, negative administrative silence could be replaced by positive administrative silence. This would prevent a lack of response from the authorities from automatically blocking certain projects, while maintaining the necessary guarantees and controls.

More developable land and less uncertainty

Streamlining procedures does not mean removing planning, environmental or safety controls. The aim should be to prevent unnecessary bureaucracy and poor coordination from paralysing projects that could help increase the housing supply.

The development sector has responded positively to these proposals. APCEspaña considers that simplifying planning procedures, improving legal certainty and speeding up the granting of permits are essential measures for reducing development times.

In practice, the longer it takes to transform land and obtain the necessary authorisations, the higher the project costs become. These costs are ultimately passed on to the price of the home.

Therefore, if we want to improve access to housing, it is not enough to announce new developments. It is also necessary to review how they are planned, processed and how long they take to become a reality.

Cooperation between public authorities and the real estate sector will be essential to achieve a more efficient planning system. Increasing the housing supply requires, to a large extent, properly prepared land, simpler procedures and clear rules that provide confidence to everyone involved in the market.

Source: Spanish National Commission of Markets and Competition (CNMC), study on the urban transformation of land for housing.