Karel Havlíček: cosmetic adjustments in construction are not enough, the change must be fundamental
The growth in construction production in Czechia has been ongoing since the end of 2024. It primarily concerns ground construction. Simultaneously, in September, members of parliament approved an amendment to the Building Act, which according to its proponents should speed up the process of preparing construction projects. Representatives of the government, developers, architects, and cities and municipalities discussed how to further stimulate housing construction and improve housing affordability at a meeting that took place on September 9.
In the first half of this year, according to data from the Czech Statistical Office, construction was started on nearly 23 thousand apartments in our country, which is almost 40 percent more year-on-year.
In the capital, at the end of June, there were approximately 6,450 new apartments on offer, which according to statistics from Central Group, Skanska and Trigema is the most in more than 10 years. Meanwhile, the hunger for new housing remains very strong. In the first half of the year alone, approximately 3,750 new apartments were sold in the capital according to the same source.
Strong demand is also evidenced by developments in the mortgage market. Banks and building societies provided new mortgages in the entire Czech Republic during the first half of the year totaling nearly 216 billion crowns, which is 66 billion more year-on-year.
Amendment to the Building Act
The September summit on affordable housing and construction development, organized by the expert think-tank Initiative for Affordable Housing, explained through the Minister of Industry and Trade Karel Havlíček what hopes are placed in the approved amendment to the Building Act.
"We cannot just make cosmetic changes. It has to be a fundamental change. It is the foundation of the legislative structure,"
the minister explained and added:
"After we finalize the building law, we will start balancing supply with demand. Until now, we have not been able to build quickly due to permit procedures. Yet we have companies here that want to build and money that can flow into it. The moment the Czech National Bank stops raising interest rates, we can step in, for example, by subsidizing housing for young families."
His words were complemented by the government commissioner for the implementation of construction law, Hana Landová.
"The amendment to the Construction Act aims to significantly limit running around offices. Individual proceedings will be merged into one. The law is not tailored to specific companies."
she responded simultaneously to the criticism. Even before that, Landová had explained that she should not be associated only with developers, despite having worked for the company Finep in the past.
"The standard should be a guide and an easy path for those who meet the legal conditions, so they don't have to struggle with it for unnecessarily long and face years of obstruction. So it works in favour of every builder, whether it's a municipality, region, state, you, me, or a company, everyone. And the builder can also be the Railway Administration,"
she explained in an interview for CNN Prima News in July.
Other regulations must also change
At the summit, Zdeněk Zajíček, President of the Economic Chamber, also spoke.
"It is not enough to just amend the construction law. It is necessary to change other laws related to it as well. We need to revive the construction sector so that it helps the economy grow. The current system of tax allocation causes municipalities to have almost no motivation to build an apartment building on their territory,"
Zajíček added.
"The construction industry is becoming an increasingly sophisticated field. We therefore also need cooperation with foreign countries. If we do not create an attractive environment for investors, it could lead to a decline. Currently, the construction industry represents up to 10 percent of the gross domestic product,"
added Pavel Drahovzal, Vice-President of the Union of Towns and Municipalities, to the head of the chamber.
The Chairman of the Czech Chamber of Architects Jan Kasl described the current transformation of the entire field that is associated with this.
"We will have to get used to the fact that there won't be architectural competitions for every building. Modular constructions, for example, will be used more. Even standardization can be beautiful,"
he said.
There are few people in construction, they are being replaced by foreign workers
Another current topic of discussion was the recruitment of new workers for the entire construction sector.
"Immediate help to prevent the decline of people in the construction industry lies in the fact that foreign workers also work in it. We have unclogged the problem of quotas. A longer-term solution is then the area of technical education. We have therefore also launched the Technical Czechia project. The first step is the restoration of vocational training at schools from 2028. Furthermore, we are starting to prepare a project for basic technical schools. These are schools with an increased focus on polytechnic education. The first pilot is in České Budějovice. There is also a project for cooperation between schools and specific companies. The first harbinger is cooperation with Czech Armory. The state will at the same time continue to financially support selected universities. I must not forget the process of simplifying the area of norms that affect the construction sector,"
Minister Havlíček described the steps that should lead, according to the government, to an improvement of the situation.
The Czech construction market is characterized by a shortage of labour force. Last year, according to data from the Czech Statistical Office, 215 thousand people worked in construction, and a large part of them consists of foreign workers.
Sources: author's article, Czech Statistical Office, CNN Prima News, Central Group, Skanska and Trigema, Initiative for Affordable Housing
