Why is construction such an issue in Czechia?
Czechia's outdated system of construction permits has long been a thorn in the side of developers and building companies. Now efforts to digitize it are threatening the stability of the government.
Czech Deputy Prime Minister Ivan Bartoš from the Pirate Party is under fire from all sides. The opposition is calling for his resignation, and even governing coalition partners are questioning his competence. Why? Over persistent problems with the newly digitized system of construction management. Why is such a seemingly mundane and bureaucratic glitch threatening the stability of the Czech government?
When the Czechs demonstrated against the communist regime back in 1989, they wanted freedom and democracy. It went unsaid that among the freedoms they desired was private homeownership. Under the communists, you could own a small house, but all the flats were state or state company-owned. The new democratically elected governments, both national and local, swiftly answered the call. In the 1990s, the vast majority of residential housing was privatized. This was very popular, as occupants could buy the flats very cheaply.
Thus, Czechia became a country where about 80 percent of people own their own homes. This is significantly more than, say, in Britain or even the United States, where homeownership is about 65 percent. Not to mention Czech neighbors Austria and Germany, where about half of the population lives in rental housing. So far, so good. But new Czech generations grew up, and they did not have the benefit of gaining their living quarters cheaply from the state. This created pressure to build new housing. In this respect, Czechia is not really exceptional. What was special was the ability of the Czech authorities to create a truly Byzantine labyrinth of administrative construction permits. When I spoke to MEP for the Mayors and Independents Party, Stanislav Polčák, back in 2019, he explained:
"The European Commission conducted a survey of how difficult it is to obtain a construction permit in the member states. Czechia ended up right at the end of the list."
Czech lawmakers kept trying to improve the legislation, but with every new amendment, the construction law became even more complicated.
"We have places where getting a construction permit takes up to 10 years. This is the case in Prague and other big cities."
This was 2019. Three years later, Stanislav Polčák’s party entered into a coalition with the Pirate Party and several others and won the elections. The political pressure to simplify construction permit management was enormous. Accordingly, one of the main promises made in the manifesto of the present government was: “The most important thing at the moment is the fundamental acceleration of construction management.”
This was a task for the head of the Pirate Party, Ivan Bartoš. With a solid background in the IT business and a PhD in information science, he was appointed the deputy prime minister responsible for digitalization and also the minister for development responsible for the management of construction permits.
Everything seemed on the right track, but it all crashed spectacularly when his ministry launched a brand new digital system for issuing building permits at the beginning of July. It did not, and still does not, work. There are problems even accessing the system. What was supposed to accelerate the process and make it more straightforward has made it even more cumbersome. And all this during the silly season when the Czech media, apart from the Paris Olympics, have a problem finding something to write or talk about. No wonder that for Czech Deputy Prime Minister Ivan Bartoš, the summer of 2024 has been even hotter than for most of us.
