The rise of residential developers

The drivers of urban growth
Residential developers in post-socialist Warsaw
Maximilian Mendel
Institute of Geography and Spatial Organization, Polish Academy of Sciences
mmendel@twarda.pan.pl
REAS – Residential Advisors
maximilian.mendel@reas.pl
Introduction
The focus of the research lies on the relationship between housing supply and urban transformation. It
reflects upon urban housing market dynamics and its spatial implications in post-socialist Warsaw. The
key emphasis is on the forces responsible for the partially uncontrolled urbanization process in Warsaw
and, in particular, the role played by residential developers. The foundation for the analysis has been an
empirical investigation of more than 1,500 residential development projects derived from the GIS-based
database by Warsaw-based REAS – Residential Advisors, comprising approximately 148,500 dwellings
built by developers in Warsaw. All development projects have been transferred from plain points on a
map to specific buildings and areas using a layer of all buildings in Warsaw provided by the Municipality
of Warsaw.
Distribution of residential projects by developers in the period 2000-2011
The rise of residential developers
Housing supply in Warsaw in the first post-socialist decade was chiefly characterized by the activities of
housing cooperatives which accounted for slightly more than 70% of new housing deliveries between
1990-1999. The activity of cooperatives in housing construction declined drastically due to several
reasons, foremost because of the exploitation of the inherited land portfolio as well as the end of
preferential financing (by PKO BP) and land access due to the coming into force of a new housing
cooperative law in 2000. From the second post-socialist decade the housing supply side has underwent
considerable change, foremost due to the rising importance of residential developers. Commencing from
the new millennium the scale of housing supply built by developers began to increase dynamically along
with the evolution of the primary residential market, based on rising incomes, a growing middle-class
and the growth of mortgage financing. Eventually a total of 150,043 dwellings were built by developers
between 2000-2014, i.e. 70.7% of all completions within Warsaw’s city limits in this period, bringing
along significant implications on urban space and city growth. The remaining types of housing providers
– i.e. housing cooperatives, state-owned companies, the municipality, TBS, and private persons –
produced only a fraction of the output of developers since the year 2000.
Dwelling completions in Warsaw in 1990-2014
100%
Developers
Cooperatives
Private persons
Public actors*
90%
80%
70%
60%
50%
40%
30%
20%
10%
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0%
Source: compiled by author based on Central Statistical Office data
Housebuilding industry
The first residential developers commenced operations in Poland in the 1990s. Today, almost 250
developers of different scale are active on Warsaw’s housing market alone. The sector experiences
frequent changes, though. Since scale economies are low in the housebuilding industry, the entry and
exit from the industry is relatively easy. Therefore, housebuilding is characterized by a high
fragmentation and low level of consolidation.
Source: compiled by author based on REAS and own data
Socio-spatial implications
As the main provider of housing, residential developers play an essential role in diminishing the
prevalent housing shortage and in providing a new quality of housing choice. However, they have also
had a significant impact on the city’s socio-economic differentiation across space. Through their
residential investments developers have created conditions convenient for the increase of socio-spatial
segregation and gentrification processes. Access to new housing is regulated by rigid market
mechanisms. It can be estimated that less than half of the population in Warsaw is able to afford buying
a new apartment on Warsaw’s primary market.
Sales level in %
Residential developers currently active in Warsaw
(each dot represents 1 out of 246 developers in total that offered apartments for sale in Q3 2014)
100%
90%
80%
70%
60%
50%
Spatial differentiation of housing prices indexed on the average price of annual researches, 2002-2012
40%
30%
20%
10%
0%
10
100
1 000
10 000
Total number of dwellings in ongoing projects
-10%
Source: compiled by author based on REAS
Large-scale housing estates and neighborhoods
Developers construct in various heights and scale. They also build in
diverse dimensions, starting from solitary buildings over housing
estates to whole new neighborhoods. The largest housing estates built
as single development by one developer include: Marina Mokotów
(~23 ha; ~1,500 dwellings*) built as a joint venture by Dom
Development S.A. and PKO bank; Ekopark (~15 ha; 1,200 dwellings*)
built by an investment vehicle of the same name; and the multiphased Derby (~56 ha; 4,400 dwellings*) project by Dom Development
S.A. The largest newly developed neighborhoods, understood as
groups of adjacent housing estates, include Miasteczko Wilanów (~81
ha; ~8,400 dwellings*), Skorosze (~45 ha; ~7,250 dwellings*), Kabaty
(54 ha built up by developers out of 180 ha; ~6,800 dwellings*) and
Fort Bema/Osmańczyka (~25 ha; ~3,600 dwellings*).
* All data on size and dwelling numbers refer to the status quo in 2012.
Source: compiled by author based on REAS and own data
Simplified model of building forms
200
m
150
m
100
m
50 m
periphery
subcentral
centre
Source: compiled by author
CBD
Miasteczko Wilanów
Kabaty
Skorosze
Fort Bema
Derby
Marina
Mokotów
Ekopark