POST-SOCIALISM AND URBAN REDEVELOPMENT: PLANNING FOR THE TRANSFORMATION OF PRAGUE'S HISTORICAL CORE
by
LEANNE MARTINSON
B.A., The University of British Columbia, 1991
A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF
MASTER OF ARTS, PLANNING
in
THE FACULTY OF GRADUATE STUDIES
(School of Community and Regional Planning)
THE UNIVERSITY OF BRITISH COLUMBIA
July 1996
© Leanne Jane Martinson, 1996 In presenting this thesis in partial fulfilment of the requirements for an advanced
degree at the University of British Columbia, I agree that the Library shall make it
freely available for reference and study. I further agree that permission for extensive
copying of this thesis for scholarly purposes may be granted by the head of my
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publication of this thesis for financial gain shall not be allowed without my written
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Department of JCfolC Of The University of British Columbia Vancouver, Canada Date Q DE-6 (2/88) 11 ABSTRACT The city of Prague has undergone drastic transformations since the 1989 Velvet Revolution ended over forty years of socialist rule in Czechoslovakia. Democratic and market economy based systems quickly replaced the previous centralized command system. These structural shifts have significantly impacted the redevelopment of Prague in the last six years - especially the redevelopment of its crown jewel, the historical core. Using a case study format, this thesis documented some of the critical changes that have occurred within the historical core of the city of Prague during the so-called 'transitional era.' The research also analyzed the implications of these larger structural changes for the city centre and its local citizens. The primary research in Prague focussed on the emerging conflict between the rapidly developing commercial and tourist functions and the unique character of the historical core, its present mixed use function, and the future permanence of its local citizens. The research methodology used included two case studies, personal observation in Prague, a literature review, and key informant interviews. The two case study surveys documented changes in the small scale commercial or non-residential sector since the Velvet Revolution. The findings indicated that the commercial sector had increased in significance in the city centre, was selling different goods today than it was prior to 1989, and was catering to a different clientele today than it was during the socialist era. Specifically, shops and services were found to be selling predominantly luxury and tourist goods to clientele that are no longer predominantly local Czech citizens. Foreigners, both business and tourist, were found to be the key emerging clientele for the local shops operating within the historical core. Ill The findings suggested that the function of the historical core has changed tremendously since 1989. The historical core has been revitalized and is fast becoming a commercial centre for the city. However, these changes are threatening the permanence of the local inhabitants of the residential areas within the historical core. The thesis conclusions suggest that Prague's urban planners need to work towards providing more specific strategies to address the emerging conflict between the permanence of residents within the city centre and the emerging business and tourist functions of the historical core. New urban planning policies are required if the mixed use functions (both residential and commercial uses) and inhabitants are to be maintained in the future within the historical core of Prague. TABLE OF CONTENTS ABSTRACT LIST OF TABLES LIST OF FIGURES ACKNOWLEDGEMENTS CHAPTER 1. INTRODUCTION 1.1 INTRODUCTION 1.2 URBAN REDEVELOPMENT 1.3 PROBLEM STATEMENT 1.4 RESEARCH OBJECTIVES 1.5 RATIONALE AND SIGNIFICANCE 1.6 CONCEPTUAL FRAMEWORK 1 1.7 RESEARCH METHODOLOGY 1 1.8 THESIS OVERVIEW 1 CHAPTER 2. THE HISTORICAL DEVELOPMENT OF PRAGUE 1 2.1 EARLY DEVELOPMENT OF PRAGUE 1 2.1.1 MEDIEVAL PRAGUE 1 2. l .2 RENAISSANCE AND BAROQUE PRAGUE 2.1.3 NINETEENTH CENTURY PRAGUE 2.1.4 TWENTIETH CENTURY PRAGUE 2.2 SOCIALIST PRAGUE 2.2.1 THE SOCIALIST ERA 2.2.2 SOCIALIST NON-RESIDENTIAL PREMISES .. 2.2.3 SOCIALIST URBAN DEVELOPMENT 2.3 CONTEMPORARY PRAGUE 2.3.1 POPULATION AND SIZE 2.3.2 SPATIAL DEVELOPMENT 2.3.3 CASE STUDY AREA - THE HISTORIC CORE 2.3.4 CASE STUDY AREA RATIONALE 2.3.5 CASE STUDY AREA - RESEARCH SITE 2.4 SUMMARY V CHAPTER 3. SYSTEMS TRANSFORMATIONS IN THE TRANSITIONAL ERA 36 3.1 THE TRANSITIONAL ERA 36 3.2. DECENTRALIZATION 36 3.3 CURRENT POLITICAL AND ECONOMIC CONDITIONS 37 3.4 PRICE AND RENT LIBERALIZATION 38 3.5 URBAN LAND OWNERSHIP 39 3.5.1 RESTITUTION 40 3.5.2 PRIVATIZATION 41 3.6 URBAN PLANNING ADMINISTRATION 42 3.6.1 URBAN PLANNING IN TRANSITION 43 3.6.2 CITY ADMINISTRATIVE STRUCTURE 44 3.6.3 THE NEW MASTER PLAN 46 3.7 REDEVELOPMENT IN THE HISTORICAL CORE 48 3.7.1 FUNCTIONAL LAND USE CHANGES 49 3.7.2 REDEVELOPMENT AND THE NON-RESIDENTIAL SECTOR 51 3.7.3 REDEVELOPMENT AND HISTORIC CONSERVATION 52 3.7.4 REDEVELOPMENT AND LOCAL CITIZENS 54 3.8 SUMMARY 55 CHAPTER 4. CASE STUDY FINDINGS 56 4.1 THE NON-RESIDENTIAL SECTOR 56 4.2 SURVEY CLASSIFICATION 56 4.3 SURVEY ONE FINDINGS 60 4.3.1 SHOPS AND SERVICES 1989 60 4.3.2 SHOPS AND SERVICES 1993 61 4.3.3 SHOPS AND SERVICES 1995 66 4.3.4 SURVEY ONE CONCLUSIONS 67 4.4 SURVEY TWO FINDINGS 67 4.4.1 FORMAL SECTOR SHOPS AND SERVICES 1989 70 4.4.2 FORMAL SECTOR SHOP AND SERVICES POST 1989 71 4.4.3 FORMAL SECTOR SHOP CLIENTELE 74 4.4.4 INFORMAL SECTOR 76 4.4.5 SURVEY Two CONCLUSIONS 79 4.5 RESEARCH FINDINGS IMPLICATIONS 79 4.5.1 STRENGTHS 79 4.5.2 OPPORTUNITIES 80 4.5.3 WEAKNESSES 80 4.5.4 THREATS 82 CHAPTER 5. PLANNING, REDEVELOPMENT PATTERNS AND POLICY RECOMMENDATIONS 86 5.1 FUNDAMENTAL STRUCTURAL SHIFTS 86 5.2 RESIDENTIAL PATTERNS 87 5.3 PRAGUE'S URBAN PLANNING SYSTEM 90 5.3.1 STRENGTHS 91 5.3.2 WEAKNESSES 92 5.3.3 OPPORTUNITIES 94 5.3.4 THREATS 94 5.4 URBAN REDEVELOPMENT PATTERNS 95 5.4.1 STRENGTHS 95 5.4.2 WEAKNESSES 96 5.4.3 OPPORTUNITIES 97 5.4.4 THREATS 98 5.5 SUCCESSFUL CASE STUDIES 99 5.5.1 ERICSSON PALACE 100 5.5.2 PRAGUE FOUNDATION FOR CITY RENEWAL 103 5.6 SUMMARY 104 CHAPTER 6. PLANNING ALTERNATIVES AND CONCLUSIONS 105 6.1 THESIS OVERVIEW 105 6.2 BROADER RELEVANCE 106 6.3 RESEARCH QUESTIONS REVISITED 107 6.4 PLANNING ALTERNATIVES AND RECOMMENDATIONS 108 6.5 FUTURE RESEARCH 113 6.6 CONCLUSION 115 REFERENCES 117 APPENDICES 121 APPENDIX 1. LIST OF KEY INFORMANT INTERVIEWS 121 APPENDIX 2. KEY INFORMANT INTERVIEW QUESTIONS 122 APPENDIX 3. SURVEY 2 COMMERCIAL SECTOR QUESTIONNAIRE 124 APPENDIX 4. SURVEYS 1 & 2 - BREAKDOWN OF SHOP TYPES IN CASE STUDY AREA 125 APPENDIX 5. SURVEYS 1 AND 2 - FOUR GENERAL CATEGORIES OF USE 126 APPENDIX 6. SURVEY 1 - SHIFTS IN CATEGORIES OVER TIME 127 APPENDIX 7. SURVEY 2 - CLIENTELE BREAKDOWN 128 APPENDIX 8. SURVEY 2 - INFORMAL SECTOR FINDINGS 129 LIST OF TABLES TABLE 1. RETAIL OWNERSHIP STRUCTURE IN THE CZECH REPUBLIC 23 TABLE 2. TOURISTS TO THE CZECH REPUBLIC 30 TABLE 3. CZECH REPUBLIC ECONOMIC INDICATORS 38 TABLE 4. SURVEYS 1 AND 2 - SHOP CATEGORIZATION 60 TABLE 5. SURVEY 1 - CLASSIFICATION OF SHOP TYPES FOR 1989 / 1993 / 1995 62 TABLE 6. SURVEY 1 - BREAKDOWN OF GOODS AND SERVICES 62 TABLE 7. SURVEY 1 - VARIATIONS IN SHOPS AND SERVICES 62 TABLE 8. SURVEY 2 - SHOP CATEGORIES BY STREET 70 TABLE 9. SURVEY 2 - BREAKDOWN OF SHOP TYPES OPEN BEFORE AND AFTER 1989 .... 72 TABLE 10. CLIENTELE PERCENTAGES 74 LIST OF FIGURES FIGURE 1. GROWTH AND DISTRIBUTION OF POPULATION OF PRAGUE 28 FIGURE 2. STRUCTURAL ORGANIZATION OF SYSTEMS TRANSFORMATIONS 37 FIGURE 3. PRAGUE ADMINISTRATIVE STRUCTURE 45 FIGURE 4. SURVEY 1 - CATEGORIES BREAKDOWN % FOR 1989 / 1993 / 1995 63 FIGURE 5. SURVEY 1 - CATEGORY CHANGES OVER TIME 68 FIGURE 6. SURVEY 1 - FOUR GOODS AND SERVICES CATEGORIES 69 FIGURE 7. SURVEY 2 - LENGTH OF BUSINESS 73 FIGURE 8. SURVEY 2 - BREAKDOWN OF INDICATED CLIENTELE OF SHOPS 77 FIGURE 9. SURVEY 2 - SHOP CLIENTELE BREAKDOWN BY GOODS AND SERVICES 77 FIGURE 10. SWOT ANALYSIS OF THE NON-RESIDENTIAL CASE STUDY FINDINGS 83 FIGURE 11. SWOT ANALYSIS OF URBAN PLANNING IN PRAGUE 92 FIGURE 12. SWOT ANALYSIS OF URBAN REDEVELOPMENT PATTERNS IN PRAGUE 96 MAP 1. CITY ADMINISTRATIVE PARTS 3 MAP 2. HISTORICAL CORE OF PRAGUE 19 MAP 3. URBAN ZONES OF PRAGUE 27 MAP 4. CASE STUDY AREA - RIGHT BANK OF THE HISTORICAL CORE 34 MAP 5. LOCATION OF THE FIVE CASE STUDY STREETS 59 PHOTO 1. TYPICAL PRAGUE 1 STREET 19 PHOTO 2. HOUSING IN THE HISTORICAL CORE OF PRAGUE 25 PHOTO 3. SOCIALIST PANALEK HOUSING IN THE OUTER RING OF PRAGUE 25 PHOTO 4. TOURIST ATTRACTION IN THE HISTORICAL CORE 30 PHOTO 5. UPSCALE RETAIL SHOP IN THE CASE STUDY AREA 57 PHOTO 6. BASIC RETAIL SHOP IN THE CASE STUDY AREA 57 PHOTO 7. INFORMAL SECTOR VENDOR 78 ix ACKNOWLEDGEMENTS I would first like to thank the Canadian International Development Agency and the U.B.C. Centre for Human Settlements for providing the funding for my research in Prague. I also extend my appreciation to my thesis supervisor, Aprodicio Laquian, for supporting the original research idea and helping me to reach my goal. As well, I thank my other committee members, Penelope Gurstein and Ray Spaxman, for their guidance and insights into the final draft. While in Prague, I could not have completed my research without the assistance and superb expertise of my colleague and friend, Ludek Sykora. I am also eternally indebted to Maria and Lenka for their assistance with translation and friendship while in Prague. Finally, I thank my family and friends in Vancouver. Without their continual encouragement and support, I would most likely still be writing. 1 CHAPTER 1. INTRODUCTION "The inseparable part of the historical core of the city is its inhabitants who, through their activities, co-create the unique atmosphere of this area and bring it to life." (Turba, 1993) 1.1 INTRODUCTION The historical core area of the Czech Republic's capital city of Prague has a worldwide reputation for its unique sense of place and beauty. The well preserved unique character and the layers of architectural history found today in the city centre date from the 7th century. Critical to the renowned special ambiance and vitality of the city centre are the permanent residents of the area (Turba, 1993: UHA, 1993)1. Events in the Czech Republic since the end of the forty-one year socialist era in 1989 have drastically altered the historical core, and consequently the lives of its residents. This thesis presents an analysis of the recent transformations in Prague's city centre, the impetus for these transformations, and the particular consequences of the urban redevelopment patterns for the future function and survival of the historical core and its citizens. Czechoslovakia was governed by a socialist regime from 1948 to 1989. During the socialist era, the centralized political and economic will of the Community Party of Czechoslovakia dominated society (see Section 2.3). The Communist state maintained strict control throughout the socialist era and was reluctant to permit any small political transformations in Czechoslovakia when political reforms began to occur in neighboring nations in the late 1980s. Nonetheless, in November 1989 a student demonstration in Prague developed into a national protest against the Communist government. As the Czech students gained popular support, a series of protests, demonstrations, and meetings occurred in Prague and other areas of the country. The people of Czechoslovakia were able to peacefully and quickly overthrow the Communist state leadership without bloodshed. Thus, the so-called 'Velvet Revolution' put an end to Communist state control over the nation. The newly liberalized Czechoslovakia quickly 1 The historical core area of Prague is also referred to as the 'city centre' or 'reservation area' throughout the thesis. 2 made way for the legalization of national democratic political institutions and market economy principles in 1990. Since the Velvet Revolution, Czechoslovakia's political, economic, and social systems have been transformed radically. These structural shifts have subsequently impacted cities and urban planning within the now separated Czech and Slovak Republics . Czech cities and their residents have been affected by such changes as the shift from a command to a market economy, the subsequent restructuring of municipal administrative systems, the re-emergence of urban internationalization, and the reinstatement of private land ownership and urban land values. These monumental transformations have occurred at an accelerated pace (especially in Prague) without extensive regulation during the transitional era of redevelopment from 1989 to the present. In many respects, the existing community, unique historical character, lifestyle of the inhabitants, and function of Prague's historical core have all been seriously threatened by the numerous shifts that have occurred (see Section 1.5). This thesis consequently focusses on the specific implications of the larger structural changes in the transitional era in the Czech Republic for the future function of Prague's historical core and the daily lives of its local residents. 1.2 URBAN REDEVELOPMENT At the end of the socialist era, Prague was redivided from ten into 57 separate administrative city district parts . The case study area of the research is the historical core of Prague. Today, the historical core is comprised predominantly of the local city Prague 1 district and some smaller sections of Prague 2 (see Map 1). In contrast to outer districts, the territorial size of Prague 1 and Prague 2 remained virtually the same after the redivision of administrative units. Both districts are centrally located within Prague and contain most of the city's historically significant monuments and current tourist attractions. 2 Czechoslovakia peacefully separated into the sovereign Czech and Slovak Republics in 1993. Although cross referencing of trends and implications of urban development patterns since 1989 is possible given the similarities of the two countries, few references to Slovakia are made in this thesis given the research focus on Prague. 3 A more detailed discussion of the division of authority between the City Magistrate's office and the local city districts is presented in Section 3.6.2. 3 Map 1. City Administrative Parts (Source: Eskinasi, 1994) Since the Velvet Revolution, the urban form of Prague 1 and 2 have both undergone many radical changes. It is important to note that due to the existing strict physical conservation regulations for the historical core, most transformations in the city centre have not been in the form of new physical developments (see Section 3.7.2 for detailed conservation regulations). In fact, very little new construction has been permitted in the area. From a planning perspective, these stringent guidelines have prevented the rapid Westernization and commercialization of the historical core (Interview 16)4. At the same time, the dramatic increase in commercial activities, tourism, and other transitional economic developments has prompted rampant urban revitalization and building restoration in the city centre (Musil and Illner, 1994). Revitalization has irrefutably had a 4 The bracketed interview references throughout the thesis refer to the key informant interviews conducted as part of the primary research in Prague. The list of employment titles and place of work of each of the 24 key informants are provided in Appendix 1. 4 positive impact on both the frequency of use and economic revival of the area. Streets and buildings that were vacant or dilapidated during the socialist era are continually being renovated and brought back to life. These renovation efforts are frequently referred to as having prompted a 'reawakening of a dead city or former historical slum' (Interview 15). However, regardless of the numerous positive attributes of revitalization, the redevelopment process since 1989 has also had detrimental impacts on the historical core and its residents. It is these negative aspects of the transitional era that were the impetus for the research problem analyzed in this thesis. Specifically, various conflicting pressures on the historical core have amplified with time. The strong demands from tourists and the commercial office market, the strained housing market, and the necessity for infrastructure upgrading and maintenance have all placed pressure on the existing function of the city centre (see Section 1.5). In addition, the transition towards a market economy and the globalization of Prague have pitted the conservation of the historical core against market economy pressures to develop the area. In this thesis, conservation is defined as the retention of appropriate components of physical urban resources, cultural traditions, and local peoples for the benefit of the future needs of urban residents and the city as a whole. Conservation is conceptualized and implemented within the local culture in question (Oliver, 1982). This definition distinguishes itself from the traditionally narrow definition of preservation. Often associated with lack of change, preservation fails to recognize the modern urban context and future use of an city area (Larkam, 1990). Given the modern pressures to redevelop Prague's city centre, a broader definition of conservation beyond preservation is necessary. Conservation in Prague should allow for sensitive current adaptations of the built form if it is to be realistic and appropriate. In fact, Czech conservationists have acknowledged and accepted modern uses of historical buildings in the city centre area as long as their physical appearance is not drastically altered (Interview 23). Finally and most importantly, conservation as defined is suitable in the context of Prague because it includes the maintenance of traditional 5 ways of life and of local residents within a modern context rather than strictly concentrating on the conservation of the built form. The emerging tension between supporters of conservation and those interested in the formulation of a central business district (CBD) in the historical core of Prague is well known. Since 1989, global economy demands for commercial space have frequently been in conflict with local demands for services and amenities. If the inhabitants are considered critical to the survival and conservation of the unique ambiance, character, and function of the historical core, then the city of Prague must work to keep residents in the area. Urban planners in Prague today face the daunting task of addressing these and many more critical issues in an era where structural changes have been the norm. 1.3 PROBLEM STATEMENT In the interests of time and relevance, the research scope was confined to a particular aspect of the various redevelopment issues for the historical core. The key problem is the commercial pressures and competition from other disparate functions which are altering, and potentially threatening, the very character of the historical core, its currently mixed use function, and the permanence of its inhabitants. Local area residents, building owners, foreign investors, and tourists are all actors in the redevelopment and revitalization of central area. Urban planners currently are at a crossroads of planning guidelines and priorities given that the viewpoints of the various actors affected by the process are often in direct conflict with each other. In an attempt to address this issue, Prague's urban planners have directly prioritized the conservation of the historical core as a vibrant and functioning 'lived in' city region. In the forthcoming new Prague Master Plan, the protection of the historical core is considered to be one of three critical priorities5. The city of Prague's Chief Architect's Office (UHA) stated that the policy goal developed in the new Prague Master Plan is (UHA, 1993): 5 The two other priorities are the improvement of environmental quality in Prague and the improvement of living conditions within housing estates built during the socialist era. 6 to preserve the unique value of Prague's historical core (with more than 1300 protected items) with the basic aim that this part will remain as a busy living city centre for a town with 1.2 million inhabitants and will not be converted to an open air museum. The numerous conflicting pressures in the historical core that have emerged in the transitional era are threatening the likelihood of the city achieving this objective. Consequently, the two major research questions of the thesis are: 1. How can the mixed functional use (both residential and commercial), population, and unique character of the historical core be maintained while realistically acknowledging the existence of a market economy and increasing commercial and tourist activities? 2. How can the city of Prague reconcile the conflict between economically driven commercial pressures for redevelopment and the local desire for the maintenance of amenities and shops, local culture, and heritage unique to the area? To test these research questions, more specific objectives were selected from an array of potentially appropriate objectives. The chosen research objectives address the two research questions within the constraints of the research methodology (see Section 1.7 for methodology). 1.4 RESEARCH OBJECTIVES The broad objective was to assess the implications of increasing urban globalization and the shift from socialism to market economy for the population of the historical core of Prague and for the revitalization and redevelopment of the area. The implications of the noted changes since 1989 were analyzed to provide some indicators as to how a currently livable historical urban area, well preserved as a centre of Czech culture and governance, might continue to be conserved or revitalized under the changing political, economic, and social systems evolving in the Czech Republic today. The recommendations of the research findings were geared towards urban policy planners in Prague working for the office of the City Development Authority. In order to fulfill these general objectives, detailed fieldwork objectives were adopted. Specifically, changes in municipal administrative structure, land use, and commercial activities 7 in selected sample areas were measured to address larger social implications of the structural shifts for a vibrant historically preserved cultural area. Primary research focussed on the following four specific activities: 1. to identify private and public institutions, agencies, and individuals engaged in urban development research and planning (see Appendix 1); 2. to identify previous and current municipal administrative structures in Prague to assess changes in the administrative system (see Section 3.6); 3. to measure changes in functional land use and shifts in commercial activity in the historical core since 1989 (see Chapter 4); 4. to assess the implications of the above-mentioned changes for local communities and future revitalization of the historical core of Prague (see Chapter 5). The third objective formed the crux of the primary research because it documented the effects of structural urban changes on the shifting usage of the historical core and the lives of its local residents. Shifts in functional land use in the non-residential sector in the area were surveyed to determine the major clientele of the shops, to document changes in the small-scale commercial activities within the area, and to assess whether the needs of local citizens were being met within their neighborhoods6. The ramifications of the noted changes were assessed with consideration of their impact on local communities and cultures, municipal administrative policies, unique historic character, existing living conditions, and the future revitalization of the historical core. Strengths and weaknesses of current urban revitalization and redevelopment were also identified. 6 The specific focus on the provision of amenities to local residents was selected for methodological reasons. As a case study, information on this topic was easily obtainable and the scope was manageable within the allotted timeframe. However, a discussion of shifts in residential use is also presented in Chapter 4. These findings are based primarily on personal observation and key informant interviews only. They are not representative of detailed survey work as is the primary research that was completed in the non-residential sector. Given that much more data was collected on the non-residential sector, this sector is given more discussion time than is discussion of shifts in the residential sector in the city centre. Furthermore, major shifts in the residential sector have yet to occur because housing is still regulated in the Czech Republic. The more drastic shifts in the residential sector are likely to occur once the Czech state deregulates housing. 8 1.5 RATIONALE AND SIGNIFICANCE Due to the fiscal and time constraints facing Prague's urban planners, there has been little research done on the implications of the redevelopment changes, or changes in the function and use of the historical reservation area. Structural changes have occurred so rapidly since 1989 that Czech urban planners have often been able to work primarily in a reactive manner (Interview 8)7. The pace of change in Prague since the abandonment of socialism has been extremely rapid. The developments within the second phase of transition can be perceived and interpreted as a regular process of urban restructuring, as is well known from Western cities. However, the speed of transition is far faster than in comparable cities of the Western world, as local subjects attempt to match new trends in development on international and global scales from a relatively backward starting position, and external/foreign subjects are keen and enabled to enter the locality without any significant restrictions (Sykora, 1994). The changes have occurred rapidly and without much research conducted by the city. This thesis research was thus deemed relevant and useful for Prague's urban planners (Interview 2). Further, due to the longevity of the previously centrally controlled system, planned urban development has not been overly popular in the Czech Republic in recent years (Hoffman, 1994). Instead, Czechs are reluctant to have further 'planning' dictated to them given the lack of freedom in the last 41 years. Consequently, the free will of the market economy and the increasing presence of foreigners in Prague have dominated transitional urban development and revitalization in a city starting from a 'relatively backward starting position' (Sykora, 1994). The current distaste for planning and heavy reliance on market economy principles in Prague were both important influences on the research conducted. Not only has the market economy developed quickly in the Czech Republic, but also structural changes in cities have not always been accompanied with adequate consideration of the future social implications of the developments. Since the Velvet Revolution, accelerated economic restructuring has created unbalanced urban development because social policies are not 7 This statement does not intend to criticize the work of Czech planners. It is recognized that they are working to the best of their capacity with the available knowledge, budget, and timeframe. 9 being formalized by the public sector as rapidly as short-term economic policies are being adopted8. There is consequently a need for analysis of the small scale socio-economic implications of larger fundamental shifts. A study of the rapid urban changes being influenced by a new system of governance and the increasing globalization of Prague will help to establish alternatives for a more socially balanced future development and revitalization of the city centre. A visitor to Prague can easily discern the existing inequities within the city. As a result of recent revitalization efforts, numerous shops have unofficially adopted two-tier price systems that are outpricing many commodities for local citizens in the central area. Prices for goods and services are radically higher in the city centre than in outlying areas because the centre contains the highest concentration of foreigners, both business people and tourists alike9. Given the under-developed infrastructure (restaurants, shops, service centres) of the city, the tourist traffic was evaluated as overloading the existing services and threatening the everyday life of local residents. Local residents complain that services are increasingly being oriented towards a foreign clientele, and in that, becoming more expensive and inaccessible to the local population. In fact, the phenomenon of double standards and double prices has become widely spread in the service sector: within the same service centres, different prices are charged and services of different standards are offered to customers paying in the Czech and in foreign currency. Especially in the central parts of the city, local residents have no access to a reasonable service infrastructure (Pohoryles and Musil, 1993). High prices and inappropriate goods and services have the potential of preventing locals from remaining in the city centre. If residents can no longer afford the services and amenities available, and the physical rehabilitation of the area creates a strong demand for other functions Urban economic restructuring refers to the emerging new combinations of economic growth and change in cities in recent years. The transformations are predominantly due to shifts in the basic production process from "Fordist" or mass-production, to flexible specialization. Restructuring is being filtered down national urban hierarchies and includes a large growth of service industries in cities over the last 25 years (Castells, 1993: Hutton, 1995). All of these attributes to structural changes in urban areas have become increasing applicable to Prague since 1989 (Sykora, 1994). 9 Of the twenty largest foreign banks and foreign law firms currently operating in the whole Czech Republic, 70 % of foreign banks and 75 % of foreign law firms are centrally located within Prague 1 (Prague Post. 1995). 10 to replace the existing residential space, then gentrification patterns may begin to emerge . Research documenting general shifts in the availability of shops and services in the area will assist urban planners with the development of new policies regarding these issues in the historical core (Interview 2). A 1992 public opinion survey demonstrated that Prague's general population also prioritizes the everyday needs of local people as critical to the city centre (Turba, 1992). Of the total survey sample, 45 percent prioritized the maintenance of shops and services for local customers as the most important measure necessary for protecting the historical core area. In addition, local neighborhood residents generally do not wish to move to alternative locations within the city (Interviews 6: 11). Unlike the propensity to move that is often common for North Americans, Czechs tend to stay in a particular neighborhood for an extended period of time. The Prague 1 district authority affirmed that the majority of its residents (certainly the elderly) are reluctant to relocate to other areas in the city due to their emotional attachment to the area (Interview 11). In many cases, the relocation flat offered may be of higher quality because it is located on the outskirts of the city11. However, the aversion to relocation tends to remains strong regardless of whether tenants are guaranteed a new flat of at least the same quality as within the old dwelling (Interview 11). The historical core is also currently an attractive housing option for those Praguers desiring an urban lifestyle (Interview 14) . Given the demand for residential space and the desire of local residents to stay in their neighborhoods, the city centre need not be necessarily depleted of its population. 10 The definition of gentrification used in this paper reflects the specific context of Prague in Central Europe. Thus, gentrification goes beyond some tradition definitions focussing on inner city resettlement by middle class individuals (Ley) to include the physical aspect of housing rehabilitation (Neil Smith, 1979: Eric Clark, 1992). Sykora (1995b) defines gentrification as occurring 'when a substantial part of dwellings (houses or apartments) in an inner city neighborhood are physically rehabilitated and, at the same time, former residents are displaced by new residents with higher social status. Sykora assumes that physical rehabilitation is directly related to social change. 11 It is true however, that the younger residents of Prague 1 are often times more willing to move than older residents if it means larger living space (Interview 1). However, this age group represents only a small percentage of the total population of Prague 1 and relocation of tenants can be difficult for Czech owners. 12 The demand is usually from wealthier Czechs and is for renovated buildings rather than for the new lower quality housing available. 11 Nevertheless, some authors have predicted difficulties in preventing gentrification and displacement in the historical core due to increasingly high rents, the disappearance of basic shops and services, and competition for residential space from commercial enterprises (Musil and Illner, 1994). Currently, changes in the commercial sector are the most prevalent threats because non-residential rents are fully deregulated. In contrast, Czech residential rents are still regulated at low levels by the state and are not yet presenting as serious a threat as non• residential changes. The presence of tourists is also threatening the area because the numbers of tourists are decreasing the sense of privacy and community in the area(see Section 2.3.3). In theory, the city of Prague hopes to prevent the increasing displacement of lower income households from the continually renovated historical core. However, the strong presence of the tourism industry and commercial activities is seriously threatening the city's ability to maintain a significant resident population in the area. Massive shifts in the functional use of buildings may also endanger the historic character of the area. The preservation of the city's rich urban heritage is a significant part of Czech culture, and contributes to the high quality of urban life (Barlow, 1994). The commercial pressures in Prague are greatest in the historical core (Turba, 1993). It will be a major challenge for the city of Prague to ensure that increasing foreign investment into the area does not damage the existing unique characteristics of the historical core (Barlow, 1994). Finally, the research is significant because current restructuring patterns in Prague are representative of general urban trends elsewhere in the Czech Republic. However, the pace and intensity of Prague's restructuring has been more pronounced given its function as the administrative centre for the Czech Republic, as the capital city, and as the leading international link to other cities and countries. Thus, Prague's experience is a useful indicator of future trends in other Czech and Slovak cities. There may also be links made to urban restructuring in other 13 countries undergoing similar transitional periods . For these reasons, it is of great significance 13 References to somewhat parallel experiences in other transitional societies are made as part of the recommendations and conclusions in Chapter 6. 12 to analyze the implications of structural changes during an era of transition for the survival of a local urban community and its citizens. 1.6 CONCEPTUAL FRAMEWORK Two major forces have shaped Czech urban development since the Velvet Revolution. The first and most crucial transformation was the shift from a command socialist based economic and political system to a democratic and market economy system. This fundamental change instigated the total restructuring of Prague's urban administrative system and policy formulation, its planning regulations, and most of the redevelopment taking place within the historical core. Urban restructuring in Prague is a relatively new phenomenon and has occurred at an incredible pace in comparison to other international cities. The end of the socialist era has made Prague's administrators and many of the citizens on a fast track to 'catch up' to their Western counterparts. The abandonment of the communist system in the Czech Republic (the main principles are identified in Chapter 2), has consequently been the key determinant for the majority of changes within Prague in recent years (see Figure 2). In order to make an adequate analysis of the resulting ramifications for Prague's historical core, Chapter Three is dedicated to providing a detailed analysis of relevant administrative and systems changes since socialism was abandoned. Most significant changes in the historical core that the case studies document stem directly from this fundamental structural shift in the overall political and economic system. The key attributes of the current society in transition are also detailed in Chapter Three to illustrate the immense effects of the shift from a command to a more free market system on Prague's development. The second critical factor influencing the Czech urban setting during the transitional era stems directly from the first. The renewed globalization of Czech cities has emerged directly as a result of the end of the isolated centralized socialist system. Giddens (1990) defines globalization as the "intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa." 13 Globalization or urban internationalization occurs at two levels in cities. First, exogenous forces penetrate the systems operating within a city. In the case of Prague, the majority of exogenous forces have been Western corporations and tourists. Second, urban reorientation occurs whereby internal urban forces seek out contact with exogenous forces. Both characteristics of globalization have become the norm in Prague in the last six years. Chapter Four's case study findings indicate a strong link between the increasing internationalization of cities and local urban restructuring. The 'global economy' is increasingly impacting the development of urban areas, certainly capital cities. Prior to the beginning of the socialist era, the Czech Republic was developing similar to other Western cities in Europe (Smith, 1989). External cultural, social, economic, and political factors played a significant role in Prague's development at the time. The strict Czechoslovak Communist state during the socialist era swiftly put an end to the large influence that external actors had on cities. The natural exception to this was the influence of other Central and Eastern European socialist nations. However, Czechoslovakia never became a satellite Soviet nation to the same extent as other neighboring nations. In general, Czechoslovakia and its urban areas were relatively isolated during the socialist era from the increasingly prevalent patterns of globalization typical in other Western cities. Consequently, the impact of exogenous forces on local urban restructuring in Prague since 1989 is a relatively new phenomenon in the Czech Republic (Sykora, 1994). With the opening of Czech borders and establishment of new, stable political and economic systems, exogenous forces are once again influencing Czech cities. In the context of Prague, urban globalization since 1989 has been expedient and dominant within the historical core in comparison to other areas within the city boundaries. There are numerous external events have impacted local happenings in Prague. Some examples include: the development of an international real estate market in the city; the tremendous presence of tourists and tourist oriented shops; international business competition; and retail commercialization of the historical 14 core in patterns similar to Western cities. The research findings provide more detailed examples of these phenomena and conclude that the rapid globalization of Prague since 1989 is a significant transformation of great concern to Prague's urban planners (Interview 18). These two major fundamental shifts have significantly impacted urban redevelopment in the historical core of Prague during the transitional era. The research questions, objectives, and case studies were consequently all developed based upon the structural shifts that have emerged from the shift from a command socialist system to a democratic market system in the Czech Republic. References to this general framework and the resulting increasing significance of globalization in Prague will be therefore be made throughout the thesis. 1.7 RESEARCH METHODOLOGY The following methodological approaches were used during the research: a literature review; case study development; personal observation; and key informant interviews. Research compilation and analysis was conducted in both Canada and the Czech Republic. Secondary sources were used to place the primary research within the context of relevant and current theoretical literature. Specifically, literature focussing on cities undergoing transition from a socialist system to a market-based economy; and on Czech urban development patterns during a period of transition were investigated. Primary research was conducted over a four month period in Prague in consultation with Czech academics. The field work primarily consisted of two major surveys of changes in non• residential functional land use in selected sections within the case study area, the historical core of Prague. In the first study, 352 shops open prior to 1989 were surveyed in July 1995 to assess changes in functional use of the space (see Section 4.3). The survey findings were compared to the functional use of the same buildings in both 1989 and 1993. The second survey focussed on 329 shops and 64 informal sector vendors located on five major streets in the historical core (see Section 4.4). The shops were surveyed not only to document the type of goods sold and 15 functional use of the space, but also to identify the major clientele of the shops (local neighborhood residents, Czechs in general, or foreigners). Notable changes in the historical core since 1989 were also identified through personal observations. Having visited Prague in 1991, 1993, and 1994,1 was able (always from a foreign perspective) to observe changes in the urban form and functional use of the historical core area. Having this temporal viewpoint provided me with advantageous insights regarding the increasing demands of foreigners on the resources, buildings, and residents of the area. Personal observation of the historical core was also used to make judgments regarding the trends of changing functional use in the residential housing sector. Rapid commercialization of the city centre has included changes from residential to non-residential space. Given that there was little information available on this emerging phenomena, personal observation of shifts in the area were used to contribute to the research findings. A case study methodology was chosen for two reasons. First, the case study is a useful multi-disciplinary approach when researchers have little or no control over the subject and the data include various sources such as documents, artifacts, interview material, and observation (Yin, 1994)14. Second, isolation of a case study area helped to keep the fieldwork in Prague manageable. Through the selection of the two case studies, the primary research was completed within the time and budget parameters. Twenty-four key informant interviews with academics, municipal planners, architects, private urban planners, real estate developers, and historic conservation professionals were also conducted15. The key informants interviewed are listed in Appendix 1. The names of the interviewees were omitted as some of the informants did not wish to be identified. The interview questions asked during the fieldwork are listed in Appendix 2. The questions varied according to 14 Upon arrival in Prague, it became evident that some of the required data for the original research proposal were inaccessible due to bureaucratic restraints and regulations. Consequently, the case study approach provided flexibility for the circumstances of the primary research. 15 Interviews with local residents were not conducted due to the numerous technical obstacles blocking access. Citizens were difficult to access and were generally not willing to discuss their situation with a foreign researcher. Further, an adequate respondent sampling size could not have been attained. 16 whether the informant was: a real estate developer; a Prague city official; or an academic, architect or planner. The interviews supplied professional judgments and expert opinions regarding the objectives and findings of the research. The key informants were extremely useful because they provided local in-country validation of the personal observations made by a Canadian researcher analyzing the historical core. Personal cultural biases and different approaches to planning procedures became evident through these discussions. In addition, the informants provided the theoretical and contextual information for the case study surveys and the objectives and development of the new city Master Plan. 1.8 THESIS OVERVIEW Chapter One provides the problem statement, purpose, rationale, conceptual framework, and methodology of the thesis. Chapter Two gives the necessary contextual background on Prague and its city centre. The city's early historical evolution, development during the socialist era, and contemporary context are outlined. Chapter Three details significant systemic transformations during the transitional era resulting from the shift from a command socialist based system to a democratic and market based system that have influenced urban redevelopment in the case study area. Specifically, the consequences of: decentralization; the current political and economic conditions of the Czech Republic; price and rent liberalization; changes in urban land ownership and municipal administration; and redevelopment procedures in the historical core are analyzed. Chapter Four summarizes and analyzes the primary research findings of the two major surveys conducted. The findings of both the first survey, a study of changes in the retail sector over time, and the second survey, a study of the major clientele of the current retail sector, indicate that the non-residential sector within the historical core of Prague is currently catering to a largely foreign rather than local population. The research findings suggest that the existing network of shops and services in the area are not adequately servicing the local population and 17 are transforming the unique character of the area. Although they have the potential, Prague's current administrative systems are not adequately managing these observed changes. Given that existing urban planning mechanisms are not dealing with such issues, the local population is in danger of being forced out of its well established community. Chapter Five provides a brief overview of relevent changes to the residential sector in the historical core due to the structural changes during the transitional era. The urban planning system adopted in Prague and urban redevelopment patterns since 1989 are also assessed. In order to address some of the weaknesses of both elements of urban planning, two successful case studies of planning iniatives in Prague are cited. Chapter Six concludes the thesis with a summary of planning alternatives and recommendations for the future redevelopment of the historic core of Prague. Based upon the research findings, specific feasible alternatives for a more socially balanced development and revitalization of the urban core area are suggested. Finally, policy recommendations are made regarding some relevant future planning research and work that could be done in relation to the historical core of the city of Prague. 18 CHAPTER 2. THE HISTORICAL DEVELOPMENT OF PRAGUE 2.1 EARLY DEVELOPMENT OF PRAGUE 2.1.1 Medieval Prague Contemporary Prague originates from the 7th century A.D., when settlements of Slavonic agricultural tribes along the Vltava river in the central Bohemian basin were founded (Hruza, 1994). In the 9th century, Prague Castle (Hradcany) was established on the left bank of the river. Prague thus became the central residence and ruling point for the Czechs controlling the land which today comprises the Czech provinces of Bohemia and Moravia (ibid.). A second castle (Vyserhrad) was established on the right bank of the river in the 10th century, marking the southern edge of the town. The medieval town continued to grow as settlements in areas around and between Hradcany and Vyserhrad developed (Sykora, 1995a) (see Map 2). The two castles were linked in the 12th century by a stone bridge connecting Hradcany to merchant and market areas on the right bank. The 13th and 14th centuries were significant expansion periods for Prague (Hruza, 1994). In the 14th century, Prague became one of the larger and more prosperous cities in Europe (ibid.). The city was greater than 800 hectares in size and held a population of 40,000 to 50,000. In 1348, Prague's medieval development concluded with the planned foundation of a New Town (Nove Mesto) by King Charles IV (Plicka, 1994)16. Regardless of their mutual physical enclosure, the four medieval towns (Hradcany, Mala Strana, Stare Mesto, and Nove Mesto) resisted political amalgamation and remained independent until the late 18th century (Sykora, 1995a). Today, the historical core of Prague is comprised predominately of the four original towns that developed during the medieval period. The impact of Charles IV on the development of the city remains visible in modern day Prague. Charles IV established three major marketplaces, a network of streets interconnecting the markets, large grandiose boulevards, and fortified new walls around medieval Prague. Map 2. Historical Core of Prague (Source: Hruza, 1994) \ Town 'Hradcany' 2 Casile of Prague 1. Lesser Town 4. Jew.sh Town 5. Old Town 6. New Town 7. City Wall (+ I 3 SO) 8 Caide Vysenrad ^Hl 9th century Hi 1 Odi century fftl 1230 '////. 1257 ::::: 1320 mm Photo 1. Typical Prague 1 street 20 2.1.2 Renaissance and Baroque Prague Sixteenth century Prague saw little internal urban structural change aside from the development of renaissance architecture that remains today (Sykora, 1995a). In the 17th century, Prague became a Hapsburg provincial town and was marked by the construction of Baroque monuments. Both newly designed and renovated buildings were developed with great respect to 17 the existing town structure . Consequently, the network of streets, scale, and character of medieval Prague have been largely preserved (Plicka, 1993) (see Photo 1). For over four hundred years the population and territory of Prague have not expanded greatly. 2.1.3 Nineteenth Century Prague The Industrial Revolution significantly impacted the city's evolution in the 19th century by sparking a new impetus of development and population growth in regions surrounding the city centre (Eskinasi, 1994). Manufacturing workshops and suburban communities quickly emerged beyond the medieval city walls. These individual municipalities were legally established as towns with separate administrations. At the turn of the century, the metropolitan belt of Prague contained four times the population of the historical core of the city. In 1893, a Rebuilding Act for the Jewish Town (Josefov) allowed City Council to 18 demolish and replace original building stock with "art nouveau" housing . It is important to note that this was one of the few times that an area within the historical core has ever been demolished and redeveloped. The incident prompted the first historic conservation efforts in Prague. The purely reactive efforts of the newly established "Club for Old Prague" prevented further demolition of the historical core (Interview 2). The Club for Old Prague still exists today as one of the few community groups in the historical core. However, like most other community organizations in Prague, it is mostly a reactive conservative group that does not actively seek out public participation in urban planning. 17 Most developments from the era of Charles IV until the beginning of the 19th century were contained within the medieval city walls. 18 The Act was following Hausmann's fashionable urban renewal tradition at the time (Sykora, 1993a). 21 2.1.4 Twentieth Century Prague In the 1930s, Prague was developing similar to other cities functioning under a market economy (Sykora and Simonickova, 1994). The capital city was fast becoming a spatially segregated city with similar characteristics to western cities (Smith, 1989). The newfound segregation of classes were compounded during the inter-war period. Wealthier residents moved into newly constructed areas beyond the medieval core, the petty bourgeoisie, clerks, and working-class remained in the city centre, and workers moved to outer city areas. In 1922, Prague's administrative boundaries (Greater Prague) expanded to include neighboring municipalities. In contrast to many other Central European cities, Prague was largely spared from damage during the two World Wars. The city currently has an excellent reputation for beauty because it has preserved the planned form and architectural styles of previous centuries. Since 1945, new urban structures have grown upon well preserved urban structures (Sykora, 1995a). Thus, socialism was imposed in Prague on a relatively typical capitalist city (Smith, 1989). 2.2 SOCIALIST PRAGUE 2.2.1 The Socialist Era The Communist Party seized political power in Czechoslovakia in February 1948. The Communists quickly gained national economic control to dismantle market economy principles which were viewed as the root of social inequities (Sykora and Simonickova, 1994). Similar to other Eastern Bloc countries, planned and controlled socialism emphasized efficient and mass production and economic 'intensification' through an emphasis on the industrial economy. Lasting forty-one years, the socialist era significantly impacted urban development in Czechoslovakia. As the city administration system was incorporated into the centralized socialist system, urban planning became subordinate to overall political priorities (Blazek et.al., 1994). Until the 1964 city Master Plan was designed and approved by the government, state economic plans were the guiding force of urban planning in Prague. More investments were made into 22 urban planning in the 1970s. Specifically, long-term plans focussing on urban housing and transportation were designed. Under Czech socialism, urban land and most building stock were nationalized as private ownership was replaced by 'personal use' rights (Eskinasi, 1994)19. Many upper class housing units were taken over by the state, divided, and redistributed to multiple working class families. In general, the socialist era did create a more balanced social mix among the various areas in Prague. Given that strict regulations made it difficult to exchange one flat for another, residents tended to remain in the same neighborhoods for extended periods once housing was established. In the historical core, the population became quite diverse and included lower income, elderly, and ethnic minority residents (Hoffman, 1994). In addition, land prices were fixed during the socialist era and urban land value based on location became irrelevant. Economic incentives to use urban resources based on their location no longer existed. Residential rents and land values in the city centre were generally comparable to outer city areas. Housing rents were approximately five percent of the average family budget for most of the socialist era (Musil, 1968). During the socialist era, one square meter of land 20 was uniformly valued in Prague at 20 Czech crowns (Turba, 1993) . 2.2.2 Socialist Non-Residential Premises Decisions regarding the division and use of non-residential buildings were controlled by local government authorities under the socialist system. Thus, city authorities controlled the location and types of shops and services available in Prague. Most shops and services in the historical core during the socialist era were located on major streets and were few in number (Interview 2) (see Chapter 4). The Czechoslovak state provided a standard formula for allocating the number of shops to be located within particular geographic areas of a city servicing specified amounts of people (Interview 12). Thus, the state strictly regulated the shops and services Some exceptions such as single family houses were not nationalized. In August 1995, one Canadian dollar was equivalent to 19.50 Czech Crowns. 23 available to local citizens in Prague during the socialist era. This rigid state control over the retail sector would be drastically altered after the Velvet Revolution. As Table 1 illustrates, the number of retail shops and services available in the Czech Republic drastically declined under socialism. Further, the ownership structure of the retail sector transformed over time from a predominately private sector market to state controlled ownership. Nonetheless, it is generally acknowledged that the basic needs of city dwellers were met by the provision of goods and services regulated by the Communist state (Interviews 12: 14). Table 1. Retail Ownership Structure in the Czech Republic (Source: Earle et.al., 1994) RETAIL YEAR ESTABLISHMENTS 111111 1947 1952 1959 1987 1989 Number of Establishments „ 76,146 57,877 43,770 39,757 Ownership Structure (In Percentages) State 3.0 7.0 68.6 61.7 61.2 59.7 Cooperative 8.0 13.0 26.7 38.0 38.8 40.3 Private 89.0 80. 4.7 0.3 0.0 0.0 2.2.3 Socialist Urban Development Given the prioritization of allocation of urban developments in space, most new developments in Prague were built in outlying city areas, allowing for the preservation of most buildings in the city centre (see Photo 2). The historical core also managed to maintain its function as a centre for public administration, although it did not become a city centre comparable to a North American Central Business District. Beginning in the 1950s, there was a strong emphasis on the construction of new pre-fabricated housing in outer urban areas to address the increasing urban housing crisis. Today, it is estimated that forty percent of Prague's total population reside in these 'panalek' houses (Interview 12) (see Photo 3). In combination with the state emphasis on new housing developments, the neglect due to lack of building maintenance resulted in the physical deterioration of many city centre and inner city buildings. Regardless of some government effort to modernize housing stock in the historical core and inner city area in the 1980s, the city centre generally became increasingly 24 dilapidated during the socialist era. Municipal housing stock was managed by public Housing Services Corporations. A major problem during the socialist era was that funds from the low commercial and residential rents collected by the Prague Housing Service Corporation were insufficient to cover the costs of building maintenance and upgrading. The impact of socialism in Prague was unique in the sense that socialism was imposed on an already existing built form (Smith, 1989). Although the socio-economic system changed, the physical structures of the city did not alter greatly under socialism. The urban design patterns found in other socialist cities were not replicated in Prague due to its already built-up city centre and its strict conservation laws (Lichtenberger, 1994) (see Section 3.7.2 for laws). Consequently, typical socialist imposing squares and wide streets were never constructed in Prague. The negative impacts of the socialist era include the neglect and disrepair of the historical core and a general decrease in the number of small-scale shops in the city centre (Plicka, 1994). Basic needs and services were provided to local residents, but without any real increase in the diversity of goods as in Western cities. However, the socialist era did positively contribute to Prague's development in so much as it prevented rapid commercialization of the city centre. Ironically, the historical core and its unique ambiance were most probably 'saved' from destruction and commercialization as a result of their neglect during the socialist era. 25 Photo 2. Housing in the Historical Core of Prague Photo 3. Socialist Panalek housing in the outer ring of Prague * Panalek socialist housing estates are often referred to as 'rabbit houses' because of their small size and structure. 26 2.3 CONTEMPORARY PRAGUE 2.3.1 Population and Size The capital city of Prague forms the centre of an area covering approximately 4000 square kilometers and holding a population of 1 212 010 inhabitants, representing greater than sixteen percent of the Czech Republic's population (March 1991 census). The population of the city has increased generally since 1900, but following different patterns in the four regions of the city (see Figure 1). Density in the whole area is 450 people per square kilometer while in the city proper there are 2453 inhabitants per square kilometer. One-seventh of employment, one-fourth of services and approximately one-third of research and scientific activity in the Czech Republic are located in Prague (Sykora and Stepankek, 1992). 2.3.2 Spatial Development Prague developed in relatively concentric zones around the original four medieval towns that form the historical core (see Map 3). The inner city districts of Zizkov, Karlin, and Josefov naturally evolved as suburban areas from the mid 19th century to the mid 20th century (Hruza, 1994). Covering an area almost ten times as large as the historical core, this second ring is characterized mainly by residential housing. The inner city is home to around 600,000 inhabitants (approximately half the city population) and provides about 45% of the total jobs in Prague, mostly in smaller factories and industries. The population of the inner city has been declining since the early 1960s. Both the inner city and the historical core were completely built up by the 1930s and are currently in dire need of modernization and rehabilitation. A predominantly residential third ring comprised mostly of suburban and garden towns surrounds the inner city. The third ring is twice as large as the historical core and inner city together and is home to the majority of the socialist housing estates that emerged beginning in the 1950s. Although approximately half a million Praguers reside in this area, it offers minimum work opportunities (Hruza, 1994). In contrast, three-quarters of the city's total employment is concentrated in the historical core and inner city area (Turba, 1993). 27 Smaller individual villages in the outlying city boundaries housing approximately 50, 000 inhabitants form the fourth ring of Prague. The typically agricultural towns cover approximately 200 square kilometers, almost forty percent of Prague's total area (Hruza, 1994). It is expected that the suburban nature of the periphery will not change drastically in the future (Hruza, 1994). Only the population of the third and fourth rings have increased since the 1960s (see Figure 1). However, most of the drastic structural changes that have occurred since 1989 due to the abandonment of socialism have occurred within the city centre and the inner city districts rather than in the third and fourth outlying rings in Prague. Map 3. Urban zones of Prague (Source: Hruza, 1994) Figure 1. Growth and distribution of population of Prague (Source: Hruza, 1994) Prague 1974 1869 1900 1921 1930 1950 Boundary Historical Core 161 773 170 777 165 884 147 725 123 053 Inner City 67 740 318 039 469 298 625 005 719 628 Outer City 41 070 70 519 94 457 176 482 214 762 Total: 270 583 559 335 729 639 949 212 1057 443 1961 1970 1980 1990 2000 Historical Core 118 386 99 657 74 966 68 600 54 400 Inner City 783 407 755 231 666 108 624 100 522 300 Outer City 231 133 285 907 441 112 521 300 696 700 Total: 1132 962 1140 795 1182 186 1214 000 1273 400 29 2.3.3 Case Study Area - The Historic Core The historically protected area of modern Prague covers 820 hectares, or 1.6 percent of the total city territory. Approximately 60,000 citizens or five percent of the total city population reside there. Since the turn of this century, the area's population has continually decreased (see Figure 1). In 1900, there were 170,777 people living in the area, whereas in 1990 only 74, 966 people were living in the historical core (Turba, 1993). However, approximately 250,000 jobs or one third of the total jobs in Prague are located in the area (Hruza, 1994). A 1991 urban study of the historical conservation zone concluded that the number of jobs within the area should be stabilized or even decreased, the number of inhabitants should be stabilized at 50,000, and that office and major commercial developments should be located in areas in close proximity, but outside of, the historical core. These conclusions were based upon the assumption that there are currently too many competing pressures on the city centre and that some of these functions should be located elsewhere in the city. The historic conservation zone is the major cultural tourist attraction in Prague (see • 21 Photo 4). Thirteen national cultural monuments are located in the area . In 1971, the Czechoslovak government declared the historical centre of Prague as an urban reservation area protected by law. In 1992, the reservation zone was placed on the UNESCO list of World Cultural Heritage sites (City Development Authority, 1995). Prague's reputation for beauty has attracted numerous visitors, particularly since Czechoslovakia's borders opened after the Velvet Revolution. Prior to 1989, tourism was severely controlled and restricted by the Czechoslovak state. Today, tourists from all over the 22 world are visiting the Czech Republic and its capital city . The number of tourists visiting Prague and the Czech Republic has increased drastically since 1989 (see Table 2). 21 The historical core is home to the Prague Castle, Vyserhrad, and the Charles Bridge. More than 1,400 protected architectural monuments, including 105 palaces, 35 monasteries and convents, 58 churches, 10 chapels, and historical gardens are also located in the area. Out of the roughly 10,000 protected pieces of art and artifacts in Prague, the majority are located in the reservation area (Hruza, 1994). 22 Statistics on tourists are available for the Czech Republic only, but it is estimated that at least eighty percent of tourists to the Czech Republic visit Prague (Interview 12). 30 Table 2. Tourists to the Czech Republic (Source: Czech Ministry of Economy, 1995) Year Number of Tourists Foreign Currency from Incoming (millions) Tourists (millions of US S) 1989 23.24 492.20 1990 36.57 418.50 1991 50.86 713.70 1992 69.41 1126.10 1993 71.73 1557.80 1994 101.14 2000.00 Photo 4. Tourist Attraction in the Historical Core 31 The impact of tourists is visibly evident throughout the historical core. Both the formal and informal economic sectors have been restructuring their goods and services to cater to the consumption demands of visitors. As the research findings demonstrate, numerous shops, vendors, and services have opened since 1989 to meet the needs of foreign visitors (see Chapter 4). The presence of tourists has drastically altered particular areas within the historical core. Unfortunately, the current administrative system prevents the majority of tourist dollars 23 from ever reaching the district authority of Prague 1 (Interview 14) . The local district council is therefore unable to access a major funding source for financing city centre upgrading and redevelopment. Currently, Prague 1 must support the social, economic, and infrastructural burdens that come with tourism without receiving the substantial economic benefits of visitors. The influx of tourists into the historical core is thus another complex and sometimes problematic issue of the redevelopment of the city case study area. 2.3.4 Case Study Area Rationale The historic core was selected as the case study area for numerous reasons. First, the protected area is the modern site of the original settlements of Prague (see Map 2). Throughout history, the area has retained its city centre function, both spatially, and administratively. Second, the reservation area is symbolic of Czech culture and pride to many Czech citizens, not simply Praguers (Institute of Sociology, 1991). Structural changes in the area are therefore of great consequence to many Czechs. Most importantly, development pressures are greatest in the historical core today. Urban planners are faced with the challenge of creating policy options that may help to prevent the social and physical destruction of the reservation area as it is redeveloped. Tourism and commercial activity have continually increased since 1989 and are often in conflict with efforts Property and income taxes are paid to the state rather than to local city districts. Prague 1 is currently unable to access most revenues from tourist oriented businesses because tax revenues are placed into the general state coffers which are then distributed to the City Magistrate office. The city then divides its budget amongst the various local city districts. It is therefore infrequent that Prague 1 realizes the financial benefits of the tourist dollars being spent within its boundaries. 32 to preserve the rich cultural and historical heritage and the presence of local residents. Not only is the area becoming the CBD of Prague, it is also the most popular place for foreigners to live and work24. The amount of residential space is continually decreasing as a result of conversion to other functional uses such as office and commercial space. Major changes are expected in the historical core given the currently low rents for residential space, the demands for commercial space in the area, and the changing demographics of citizens (Plicka, 1993). Low residential rents are possible because the state has not yet deregulated the residential housing sector for Czech citizens. Gentrification may become increasingly prevalent as more wealthy residents (both Czech and foreign) move into the area (Hoffman, 1994). Many local shops and services are being replaced with more tourist oriented businesses (see Chapter 4). These pressures are often incongruent with local residents' priorities such as the need to maintain affordable housing within Prague 1, the need for affordable and appropriate local shops and services, and the desire to preserve the unique character of the area. Although urban planners recognize the significance of maintaining the existing population in the historical core, the number of inhabitants living there has continued to decrease since the beginning of this century (Turba, 1993) (see Figure 1). It is only in the outer city and periphery areas of Prague that the population has increased. The city of Prague does acknowledge the difficulty of upholding its objective of keeping at least 50,000 inhabitants living in the historical core (Interview 2). To date, the city has not • • • 25 addressed this issue with specific policy guidelines . The research offers one study of the effectiveness of existing planning mechanisms to maintain the population of the popular The areas between the streets Na Prikope, Vaclavski Namesti, and Narodni are considered the heart of Prague's emerging CBD. 25 This statement is based upon interviews with city officials and documents on the new Master Plan. In its favour, the city does strive to maintain certain areas as residential within Prague 1. The regulations have done much to prevent the massive conversion of residential to office space in the historical core. 33 historical area. The research can be used as a reference point for the further redevelopments that will occur in other areas in Prague in coming years. 2.3.5 Case Study Area - Research Site The specific case study area selected for the two primary research surveys of the non• residential sector constitutes a part of the Prague 1 district and some sections of Prague 2 in the historical core. Prague 1 is divided into five major areas: Mala Strana and Hradcany on the left bank of the Vltava river, Old Town, Josefov, and much of the New Town on the right bank of the river (see Map 4). Only the right bank was surveyed because the area has traditionally been the commercial centre of Prague (Interview 19). It is clear that the strict regulations of the socialist era did little to hinder this strong retail and commercial function given that in 1989, 37 percent of Prague's total retail trade was operating within the case study area. In 1991, the right bank was home to 35,060 residents (82 percent of Prague l's population or three percent of the total city population) (Interview 19). Not only do Old Town, New Town, and Josefov have a strong commercial history, but they are also located in a popular central area of the historical core. In fact, the study area includes more than half of the total historical reservation area. The area is frequented by a mixed population comprised of: local residents; Praguers (commuters and workers); foreign and domestic business people; and tourists. As such, the case study area provided an excellent sampling of the changing demands and supply of small non-residential sector shops for the local 26 community, Praguers, and foreigners . Moreover, the case study site was appropriate given that market economy pressures stemming from the new real estate market, privatization schemes, and increasing land value are extremely strong in this area. The study area was also chosen for its manageable size, accessibility, and the availability of information. 34 Map 4. Case Study Area - Right Bank of the Historical Core (Source: Czech Statistical Office) The first research survey was of the 330 non-residential premises in the area owned by the state, enterprises, institutions, or cooperatives prior to 1989. The premises were privatized through public auctions shortly thereafter. Since 1989, there has been a dramatic increase in the number of shops that exist in the area given that the state has deregulated the non-residential sector (see Section 3. 3.5). Although statistics were not available as to the exact number of shops currently open in the area, it is safe to say that the original 330 shops have become merely a few of many shops operating in the case study area. The second research survey of all the existing shops on five major streets in the area is indicative of this trend. There were at least 327 shops open in August 1995 on only these five streets. Clearly, the case study area has become increasing commercialized since 1989 (see Section 4.6). The types of existing and emerging shops in the area were visibly disparate depending on variables such as: their location within the historical core; the amount of financial re-investment 35 into the building; the preferences of private owners; and consumer demands . Since 1989, urban planning authorities have rarely regulated the type of shop emerging (see Section 3.7.1 for shifts in regulations). In general, buildings located near or within the emerging CBD zone or tourist sectors tended to offer more upscale and expensive merchandise. Similarly, the appearance and merchandise of buildings receiving ample financial investments were also more visibly upscale. In contrast, buildings lacking financial investment or situated away from prime locations tended to contain less upscale shops. In general, the emerging non-residential sector in the case study area is definitely more predominant and structurally different than during the previous era regardless of the strong tradition of commercial activity within the historical core dating from earlier centuries. 2.4 SUMMARY The historical development of Prague has been significant for the redevelopment of the city centre since the Velvet Revolution. Prague's early development created a unique urban environment that remains relatively intact today. Stringent centralized policies during socialist era helped to preserve the unique qualities of the city. In general, the many alterations to the historical core of Prague documented in the thesis research have occurred as part of the rapid redevelopment of the area after 1989. Redevelopment pressures that have emerged in the era of transition were thus imposed on the well founded city form of Prague. The case study sample of the emerging non-residential sector in the historical core serves to document the impacts of these redevelopment pressures on the local area, its functional use, and its citizens. 27 The influence of the demands of all consumer have been only marginally significant in comparison to the other factors. As the survey findings demonstrate, the interests of some consumers (predominately tourists) have outweighed the interests of others (often local Czechs). The demands of socially weaker consumers thus have less of an impact on the types of existing shops and services (see Section 4.X). 36 CHAPTER 3. SYSTEMS TRANSFORMA TIONS IN THE TRANSITIONAL ERA 3.1 THE TRANSITIONAL ERA The 1989 Velvet Revolution prompted drastic political, economic, and social change in the Czech Republic and its capital city. The shift from a socialist command system to a market democratic system induced the most dominant shifts in Czech urban areas. Some of the major structural systems transformations in the transitional era are of particular significance for the primary research conducted in Prague. Chapter Three provides the necessary background information regarding these relevant structural transformations. Specifically, the current political and economic conditions in the Czech Republic, the transformations in Prague's urban planning administration system, and the relevant redevelopment policies for the historical core that have resulted from the above-mentioned shift are analyzed in this Chapter. Sykora (1995a) distinguishes between two major phases of systems transformations in the Czech Republic: government directed transformations and market directed transformations. Market led transformations continue today and are affecting the redevelopment of the historical core of Prague. Also of great significance for the city centre, government led transformations began in January 1991 and were generally completed in December 1994. Relevant government led initiatives include: decentralization; price and rent liberalization; the restitution of privately- owned buildings; and the privatization of state-run enterprises. The relationship between these transformations are presented in Figure 2 and are discussed in detail in the following sections. 3.2. DECENTRALIZATION Given the current distaste for 'planning' in the Czech Republic (as a result of the previous socialist system) and the strong desire to rebuild the country based on democratic and free market principles, governance systems at all levels have been largely deregulated and decentralized. Multiple participants operating under a free market system quickly replaced the previously centralized decision-making processes. Public management of all state resources and the dominance of state ownership began to be phased out shortly after 1989. The effects of decentralization within the city administrative structure in Prague are outlined in Section 3.6.2. 37 Figure 2. Structural Organization of Systems Transformations Shift from command socialist system to a market economy democratic system in the Czech Republic Government led transformations Market led transformations Price and rent Changes in urban land Decentralization Entrenchment of market liberalization ownership and deregulation economy Restitution Privatization Urban globalization and internationalization Redevelopment of the historical core Functional land use changes (formal and informal sector) 3.3 CURRENT POLITICAL AND ECONOMIC CONDITIONS Political and economic stability in the Czech Republic has induced many of the urban revitalization efforts that has occurred during the transitional era. Democratic political institutions were entrenched early on with two major elections held in 1990 and 1992. Large political support for Czech Prime Minister Vaclav Klaus' aggressive pro-economic reform policies helped to foster the Czech Republic's political stability that is now beyond question 28 (Czechlnvest, 1995) . Solid political institutions established the necessary framework for the transition to a market economy (Sykora and Simonickova, 1994). Prague's redefined national role did not drastically affect the political clout or stability of the city because the loss of position as capital of both the Czech and Slovak Republics has largely been compensated for with the city's new regional and international functions (Musil, 1994). 28 In a March 1994 survey of Eastern Europe and the former Soviet Union, Ernst and Young and World Link gave the Czech Republic a perfect score for overall political and economic stability, outranking all other surveyed countries (Czechlnvest, 1995). 38 Compared to some of its Central European neighbors such as Hungary, Poland and Slovakia, the Czech Republic transformation to a market economy has gone very well. The Czech economy is generally acknowledged as one of the most stable and expanding economies in central Europe, largely due to economic reforms launched in January 1991 (Jones Lang Wooton, 1995). As urban sociologist Musil stated (1994), the country is "neither an 'economic tiger' nor a stagnant post-communist country" (see Table 3). The Czech Republic's economic 29 success has been an impetus for large foreign investment in the nation, certainly its capital city . Table 3. Czech Republic Economic Indicators (Source: Healey and Baker, March 1995) CZECH REPUBLIC 1992 1993 1994 1995 (estimated) Economic Growth (%) -6.6 -0.3 2.5 3.0 Unemployment Rate (%) 2.6 3.5 4.0 6.0 Consumer Prices (%) 11.1 20.8 10.0 8.0 Direct Investment 1.8 2.3 2.4 (Feb.) n/a (US $ billions) 3.4 PRICE AND RENT LIBERALIZATION Transition towards the liberalization of both rents and prices in the Czech Republic has been swift. Economic reforms have included the re-introduction of the commercial convertibility of the Czech crown, the eventual liberation of prices for goods and commodities, and the liberalization of foreign trade in the Czech Republic. In conjunction with the liberalization of prices in general, these reforms helped to establish a market economy system. In 1991, a new land value decree in Prague was developed with the price of urban land standardized at 1700 Czech crowns per square meter (Sykora and Simonickova, 1994). However, given that the official price neither reflected the spatial value of real estate within the city nor dictated the market value a building could be sold at, real estate transactions quickly began to reflect market prices. Thus, typical of many other capitalist cities, the market value for Czech legislation enables foreign entrepreneurs to conduct business in the Czech Republic under the same conditions as their Czech counterparts (Czechlnvest, 1995). 39 land in the historical core and inner city areas quickly became radically higher than for outer city and peripheral districts of Prague. Non-residential rents and leases to foreigners have also been fully deregulated. As of 1991, the new Law on Lease and Sublease of Non-Residential Premises eradicated local city district's authority to regulate the use or rents of non-residential premises. Residential rents remain highly regulated and low in value, but are slowly moving towards eventual full deregulation. Tenement housing in Prague's inner and central city areas occupied mostly by Czechs has been problematic for many new owners because rental incomes often do not cover the costs of building maintenance and upgrading. The Czech government has done very little to compensate for this financial discrepancy. The high deregulated non-residential rents and the high rents from foreigners (both business and residential) in Prague are consequently placing immense pressure on Prague's rental market. These deregulated sectors are increasing the average rents for spaces located in the city centre and are pressuring low paying Czech tenants to move out (Sykora and Simonickova, 1994). 3.5 URBAN LAND OWNERSHIP Structural shifts in urban land ownership in the Czech Republic from a centralized state dominated market to a free real estate market were facilitated by two major government initiated programs; restitution and privatization. The programs were instigated after the 1991 transfer of ownership of state owned properties to local municipalities. The municipalities were then able to decentralize ownership through restitution and privatization programs usually conducted by local city parts on behalf of the city of Prague. City parts have the authority to decide whether or not a building will be sold. Generally, city parts retain properties to be managed on behalf of the City Magistrate when the property is non-residential (over 1/3 of the building is designated for non• residential use) or if the property was not claimed under restitution. 40 3.5.1 Restitution Beginning in 1991, the government initiated restitution (or reprivatization) program enabled the return of property expropriated by the communist state after February 1948 to its 30 original owners or their heirs . Property was restituted in all cases (where an application was 31 made) except those where new property was built on the land after it was nationalized . In these cases, owners were simply given financial compensation. The rationale behind restitution was to give moral compensation for the loss of personal ownership rights (Sykora and Simonickova, 1994). This moral agenda was supplemented by the economic agenda to quickly decrease the government's role in property management (ibid.). Spatially, restitution predominately affected buildings in central city areas simply because Prague's outer city areas consist mostly of socialist housing estates. In 1989, the Prague 1 District Housing Service Corporation managed 96.8% of all housing stock in Prague 1. It is estimated that approximately 70 % of the total housing stock in Prague 1 has been restituted. Many of the restituted houses were quickly sold by their private owners. The restitution process drastically changes ownership structures within the historical core given that it was one of the first stimuli for the development of the real estate market. Further, the restitution of buildings created opportunities to renovate unused ground floor spaces for entrepreneurial retail purposes 32 given that generally there were no restrictions on the use of restituted properties . Short-term economic gains have often been easily attained because new owners are able to collect deregulated rents from either foreigners or other non-residential functions. Restitution, along with privatization programs, has been a key component of economic restructuring in the 30 Buildings that have been restituted today were managed by local city district Housing Services Corporations during the socialist era. 31 Any property owned by foreign companies or companies with foreign participation was not eligible for restitution unless the land was acquired from a legal entity after October 1, 1990 (Czech Invest, 1995,). 32 The exception was if property held social, medical, or cultural organizations. In these cases new owners were required to rent the premises to the current tenants for no less than ten years (Earle et.al., 1994). Similarly, private property housing similar services were also given some legal protection against eviction. 41 transitional era. Consequently, the market economy, real estate market, and land value differentiation successfully developed in the historical core of Prague. 3.5.2 Privatization The Czech privatization program began in January 1991 as a means of decentralizing ownership structures and privatizing previously state-owned enterprises and property (see Table 1 for previous ownership breakdown). Large scale privatization focussed on approximately four thousand of the largest state-run enterprises of the communist regime including financial institutions, insurance companies, state farms, industrial enterprises and foreign trade 33 • organizations (Czechlnvest, 1995) . Properties that were not restituted were sold to private individuals through small scale privatization. Passed in November 1990, the Law on Small Scale Privatization allowed for the privatization of smaller state enterprises such as shops, restaurants, hotels, and local services through a series of public auctions. In Prague, the city Magistrate delegated the privatization of property not claimed in restitution to the local district authorities34. The majority of properties were auctioned off by the end of 1992. The small scale privatization program was the dominant method used to transfer ownership of trades and services in the Czech Republic (Earle et.al., 1994). In Prague, 2528 small businesses were privatized between 1991 and 1993 (Sykora and Simonickova, 1994). Shops surveyed in the first case study discussed in Chapter Four were privatized under the small scale privatization program. The majority of premises were auctioned through leaseholds rather than direct deeds of ownership (Sykora, 1994). Under the former, facilities, furnishings or equipment were auctioned with a five year lease guaranteed to the new leaseowner. The prices paid for properties varied according to location and to the stage in the process that the goods were auctioned in. Prices were drastically higher for both buildings located closest to the city centre and those sold earlier Large scale privatization will not be discussed in further detail as the research focussed solely on the implications of the small scale privatization program. 34 Foreigners were not allowed to participate in the first round of the process. 42 on in the process. Similar to restitution, the privatization process highlighted the increasing prevalence of spatially differentiated locational urban land values. One square meter of office space in Prague 1 is valued monthly at approximately 50 Canadian dollars today whereas the same space in outer city areas is valued between 25 and 40 Canadian per square meter (Jones Lang Wooton, 1995). Small scale privatization quickly created the necessary buildings and enterprises for the establishment of the private small-scale commercial business sector (Sykora, 1994). The process also helped to facilitate the adoption of market mechanisms in the urban economy, especially competition in the retail sector (Sykora and Simonickova, 1994). Further, as the findings of the two case studies illustrate, small privatization had significant social ramifications for shifts of functional use of both privatized buildings and the historical centre in general (see Chapter 4). The increasing commercialization of the historical core of Prague documented in the research was largely prompted by the government initiated privatization and restitution programs. In summary, the systems transformations that have been discussed in the above sections have greatly impacted urban redevelopment in Prague. 3.6 URBAN PLANNING ADMINISTRATION There have also been relevant structural adjustments to the city's system of urban planning administration. The city of Prague has a long established tradition of urban planning dating back to the 14th century (Plicka, 1993). Beginning in 1951 with the establishment of the Town Planning Office, socialist urban planning in Prague was guided by a series of legally binding ten year Master Plans. Master Plans dictating strategic urban development were developed primarily under the guidance of the Chief Architect's Office of Prague (UHA), the main urban planning and territorial development body established in 1961. The UHA operates under the authority of the City Magistrate Office. The most recently endorsed Master Plan was enacted by the Czech government in 1986 and remains in legal effect today. 43 3.6.1 Urban Planning in Transition However, the 1986 plan is openly acknowledged to be outdated given its emphasis on now inappropriate planning mechanisms such as mono-functional zoning and recent changes in the country's political, economic, and social systems (Turba, 1993). Consequently, as centralized urban governance was replaced with urban planning involving various actors, a new Master Plan was developed (Sykora, 1994). The participants in the new planning framework include: the central government; various levels of local government; and consultation with private individuals, companies, political, social, and environmental interests groups. The inclusion of community interest groups in this list does not suggest that public participation in planning in Prague has reached a level comparable to North America. In fact, there is currently very little, if any public participation in planning Prague. This is due, in part, to the negative attitude towards 'planned' systems given the experience of the past forty years and also to citizen's lack of understanding of how to participate in planning (Interview 6). Nonetheless, the broad spectrum of participants represents a fundamental change from the previous single actor decision-making process. The office of the city Magistrate must now conceptualize a new form of urban planning regarding the future vision of Prague's historical core with consideration of the following new contextual developments, urban policies, and local preferences: • the prevalence of the free market economy; • the changing role of Prague's capital city role within the Czech Republic and Europe; • the realization of land value for the first time in forty years; • the privatization of urban land and building stock; • the influx of commercial activities and resulting pressures on the historical core; • the increasing influx of tourists to Prague, especially its historical core; • the changing demographics and land ownership within the historical core; • the need for affordable housing and services, and adequate infrastructure within the historical core; • the desire of the majority of local residents to remain in the historical core and the stated intent of planning authorities to maintain a living population in the area; . • the need and desire to conserve the historical and cultural nature of the area, the existence of strong historic conservation laws protecting the city centre, and the limitations these laws place on redevelopment projects in the historical core. 44 Urban planners are thus working within a context that involves infinitely more factors than was the case under socialism. The majority of these new considerations stem directly from the emergence of the market economy and internationalization of Prague. 3.6.2 City Administrative Structure The October 1990 Municipal Act provided the guidelines for the redivision of municipal responsibilities amongst the various city parts; Prague's Magistrate office, its advising authorities (primarily the City Development Authority), and the local city district authorities (see Figure 35 • • .... . 3) . Under socialism, municipal responsibilities were divided between the Magistrate and the ten local district authorities. Recently, the district authorities were restructured to create 57 separate district authorities. Each city district has its own local government including a city council, an urban planning department, and an elected mayor. There are large discrepancies amongst the different districts with regard to territorial size, priorities, and the dynamics of their development (Blazek et.al., 1994). These discrepancies have created large conflicts and obstacles to urban planning. Jurisdictional authority amongst the City Magistrate's Office and the local city districts is divided. However, the responsibilities of local city districts are: often unclear; limited in scope; often in competition with the city; and generally subordinated to city policies. The limited scope of the local authorities can be seen as a remnant of the previously centralized system (Blazek et.al., 1994). With regard to development, a developer will frequently require permits from both the local district office and the city. The local districts operate with their own financial budgets, but are reliant on the city for the majority of their funding. 35 The City Development Authority office recently replaced the UHA as the principal urban planning authority for Prague. Although the structure of the UHA was altered, the City Development Authority fulfills the same role that the UHA did. Consequently, references to the City Development Authority will also use the acronym of UHA. 45 Figure 3. Prague Administrative Structure (Source: Blazek et.al., 1994: City Council of Prague, 1993) Municipal Assembly (76 members) City Council (15 members) City Mayor Magistrate Office Local District Assembly (ie: Prague 1) City Development Authority District Office Urban Local District Council Planning Body 4 Local District Mayor Urban planning consulting bodies such as UHA and its Prague 1 counterparts operate without legal powers. They are completely separate from the various departments in the Magistrate and local district authorities that provide developers with building and construction permits. Prior to 1989, the UHA was responsible for both conceptualization and detailed practical daily decisions (Interview 8). Today, the responsibilities have been largely segregated. The city authorities (both Magistrate and local) are in charge of issuing development permits whereas the UHA's role is to verify that the projects are in accordance to the Master Plan. There is often a noticeable lack of dialogue between practical permit and licensing decision-makers and those directing policy decisions regarding urban development (Interview 8). Within the context of the historical core, this issue has been problematic because the Prague 1 district often holds disparate viewpoints to the Magistrate's office regarding redevelopment. 46 A second problematic issue is that the city districts rely heavily on the Magistrate's office for funding. The local districts do not own buildings within their territory, but rather manage them on behalf of the city of Prague. Thus, Prague 1 is not able to realize the financial benefits (through taxes or property sales) of managing property in Prague's prime geographic location. These examples are just a few of the many obstacles and difficulties with municipal administrative structures that have emerged in the transitional era and are impacting the development patterns within Prague. However, the current delineation of municipal responsibilities is not yet permanently in place and remains subject to change. 3.6.3 The New Master Plan The UHA is presently developing a new Master Plan to provide the legislative guidelines for strategic planning and urban development in Prague until the year 2010. The city of Prague has developed an emergency strategic plan for the interim period before the new Master Plan was 36 legally adopted . The process began formally in 1991 with the conception of a first reading of general guidelines to the new Master Plan. The first reading prioritized the need to develop new urban planning strategies and guidelines and to offer some alternatives for future development in recognition of the need for structural changes to the existing planning system (Eskinasi, 1994). The main finding was the strong need for fundamental changes in planning policies and regulations, especially from single to multiple function zoning (Sykora, 1993a). The 1992 second reading was more detailed with elaborate objectives for specific urban zones in Prague. The draft delineated two major urban areas: stabilized areas and non-stabilized areas, or areas for development. Stabilized areas were formulated (on a scale 1:10000) when either the existing situation of a city part was known or if detailed plans already existed for an area. Development areas or non-stabilized areas are sectors where the city has no fixed prognosis for future plans (Interview 2). Developments in the non-stabilized areas are currently quite The strategic plan is not recognized as a legally binding document because current legislation calls for a land use urban plan (Interview 14). 47 restricted and are subject to the new guidelines being developed by the UHA . The percentage of unstabilized zones increases as you move from central to outer city areas (Interview 2). The second draft outlines the general functional land use of the various types of stabilized areas, the specific functions that are permitted, and what variants are permissible at a scale of 1: 25,000 (Eskinasi, 1994). Stabilized areas encompass most city parts with relatively developed urban form and where large functional alterations are not expected (Sykora, 1993a). The historical core, the residential inner city areas, green space, and the new towns are considered stabilized zones, covering approximately sixty percent of Prague's total area (Eskinasi, 1994). Any modifications in stabilized areas must respect existing urban and functional form with large- scale developments permitted only in the areas for development outside the stabilized zones. The new Master Plan outlines specific priorities and guidelines for the conservation of the historical core. The strategic plan developed as part of the Master Plan emphasizes Prague's uniqueness. Specifically, it purports (UHA, 1993): • to give continuous care to the protection of immovable monuments and other cultural and natural wealth; • to preserve the unspoiled city historic core and to protect it against intensive commercial utilization. The Master Plan will achieve these targets by: • easing the commercial pressure on the Prague Historical Reservation, through the realization of modern administrative and commercial centre of European standards (districts Holesovice-Bubny, Karlin, Smichov, Pankrac). • protecting Prague's various community cores and their respective local character. New developments will be concentrated outside the historical core to relieve pressure on the city centre and to conserve the area. Although the new Master Plan states the city Magistrate's commitment to protecting the historical core, this is one of the few specific methods stated of achieving its objective. The weakness of actual tangible policy implementation mechanisms was The research does not detail the regulations for non-stabilized areas as the focus was on the historical core which is a stabilized area. 48 further emphasized during key informant interviews with city planning officials. Critics of the upcoming Master Plan also argue that it is too general (the Plan is at a scale of 1:25000), leaving a huge gap between new policy directions and the practical decisions such as development permits that must be made for specific areas within Prague (Interview 8). The final draft of the Master Plan is currently being finished in preparation for discussion amongst academics, professionals, and the general public from September 1995 to February 1996. Planners will then evaluate and incorporate responses into the final statement to be approved and ratified by the Prague city council (Interview 13). The new Master Plan will serve as the fundamental urban development and strategic planning reference point for future investors, developers, and builders with only minimal flexibilities permitted (UHA, 1993). 3.7 REDEVELOPMENT IN THE HISTORICAL CORE There has been rampant redevelopments in the city centre since 1989 due to the adoption of market economy principles and the subsequent reinvestment of finances into the area. The 38 reservation zone is re-emerging as an active, vibrant area of Prague . Massive revitalization efforts have highlighted the discrepancies between those streets and buildings that have been renovated and those that remain untouched. A walk down a busy street such as Wenceslas Square offers the pedestrian a wide selection of foreign goods and services ranging from McDonalds and Harveys to American Express. A less busy street such as Dlouha may offer the pedestrian a more conservative selection of local produce and meats sold in former state stores. The majority of the historical core was completely built by the 1930s. Consequently, most of the newfound development activity in the area since 1989 has consisted of redevelopment and re-use of existing building stock because strong conservation laws have made new developments difficult. The research therefore focussed on the implications of the changes in functional use of existing buildings rather than on the small number of new developments in One indicator of the prevalence of shops in the area is that fifty percent of the twenty largest retailers in Prague are now located within Prague 1 (Prague Post. 1995). 49 the historical core . The process permitting the emergence of new shops and services in the renovated existing buildings within the historical core was of specific interest. In order to alter or renovate buildings within the historical core, a developer must obtain both a building and planning permit. The Territorial Planning and Building Law regulates all new construction or building alterations in Prague. Redevelopment permits need to be ratified by various municipal departments. The UHA usually issues the first required development permit, the planning permit, whereas the local city districts are more likely to issue the subsequent necessary building permits (Interview 6). Often times developers will need to have the permission of over twenty authorities before a project can begin (Interview 1). Usually, redevelopments in the protected area are subject to approval (at a minimum) by the city Magistrate, the local district office, and the Prague Institute for Monument Protection. 3.7.1 Functional Land Use Changes One of the most intriguing aspect of redevelopment in Prague is the currently changing functional land uses in the city centre. Planners have designated certain sectors of the historical core as residential, partially residential, or of mixed use. In addition, there are specific guidelines for the use of spaces within each building, but these are usually based on the previous division of uses that existed within the building. The city is trying to prevent excessive conversion of residential space (usually apartments) in the area to commercial space (often offices), but with only marginal success (Interview 13). It has been estimated that the residential function of the area is currently decreasing at a pace twice that of the pace prior to 1989 (Interview 6). There is an immense demand for commercial office space within the historical core given its prime location and emerging CBD function40. It is also extremely lucrative for building owners to convert residential space to commercial space because housing rents are still regulated, 39 The new developments that have occurred since 1989 in the historical core are predominately large scale projects such as the new and modern Myslbek shopping centre holding approximately 6500 square meters of retail area on three levels. 40 Of the fourteen largest prime office buildings in Prague, nine of the buildings (64 percent) are located within Prague 1 (Prague Post. 1995). 50 whereas commercial rents are not. An owner may increase building revenue from the monthly rent obtained from a Czech family of four (on average between 1500 - 2000 Czech crowns) to a higher commercial rent (on average between about 20,000 - 40,000 Czech crowns)41. This extra income is often critical for the upgrading and maintenance of the building. The pressure for conversion and increasing commercialization is often difficult for the city to contain and is thus resulting in shifts in the functional use of the city centre. The existing regulations and tools available to the UHA to prevent unwanted shifts in functional land use are extremely weak (Interview 13). Consequently, the tendency for conversion of functional use within the historical core has been strong in the transitional era (ibid.). There is immense pressure for urban planners to adhere to the prevailing political support of the market economy. It is very difficult for planners to fight this trend given their weak position of power within a government undergoing restructuring. In general, within the historical core area, the mechanisms available to prevent the conversion of functional use of a building during a redevelopment process are inefficient and underutilized. Given that local city authorities can no longer regulate the use of non-residential spaces, there has been a sharp increase in high end shops and services catering to foreigners in the city centre while basic needs shops are being pushed out (see Chapter 4). The city of Prague is always concerned with the conservation of the historical aspects of a building, but is rarely sufficiently concerned with changes in use of a building. Developers are sometimes able to make financial contributions to the city in order to convert residential to office space (Interview 5). Further, developers have stated that they never have difficulty changing the functional use of a building, so long as the project following the specific rules and regulations of the permit process (Interviews 1:5: 3)42. Further, if a building owner chooses to convert the use of a private 41 An alternative source of increased income is to rent flats to foreigners because these rents are deregulated. A foreigner may pays between 25,000 and 80,000 Czech crowns for the same flat that a Czech family pays a marginal regulated rent for. The estimated rents for commercial space was calculated at a rate of $25.00 Cdn per meter squared of retail space. 42 For example, one developer stated that the city is often more concerned that all permits are acquired in the proper order from the various necessary authorities than they are with the changing use of a building (Interview 1). ( 51 building against city regulations, the resulting repercussions are often marginal. Both the Magistrate's office and Prague 1 could try to enforce the law, but this is both rarely done and difficult to accomplish given the weak mechanisms available (Interview 11). Coming from a North American city where strict zoning regulations are often the norm, it was astonishing to witness the ease of conversion of functional land use due to the lack of strict guidelines or enforcement mechanisms. It appears that Czech urban planners generally do not believe they have the right to intervene with the will of private building owners regarding land use changes (Interview 2). Although planners profess to be concerned with the changes in the historical core, the function of the city centre is altering drastically due to the city's reluctance to intervene and prevent shifts in land use. The interviews conducted gave the impression that the city of Prague is not truly considering all the future implications of the small incremental functional changes that have occurring in the transitional era. The UHA supposes that the building by building changes, in themselves, do not pose a threat. However, there has been little consideration of the combined long-term effect of these incremental changes. 3.7.2 Redevelopment and the Non-Residential Sector The commercial and retail sector within the historical core has transformed enormously during the transitional era. Personal visits by the author to Prague in 1991, 1993, and 1995 have served to reaffirm this trend. Vast numbers of Western brand name shops such as McDonalds, Adidas, Kmart, and Benetton have emerged43. As well, many Czech companies such as Himi's Jeans or Pizza Express are opening new businesses modelled after Western counterparts. New shops are appearing on various streets within the area, not simply on the major streets. The opening of new small shops and the renovation of old shops were two early visible impacts of the new economic government reform strategies. The re-emergence of the small scale commercial sector has been viewed by many as a positive step towards the revitalization of the 43 In the very city centre, there are currently six McDonalds, two Kentucky Fried Chickens, Pizza Hut, Harvey's, Adidas, Nike, Giorgio Armani, Levi's, Nina Ricci, Pringle, Boss, Benetton, Stephanel, Estee Lauder, and Panasonic. All of these shops have opened since 1989. 52 reservation area (Interviews 2: 14). The variety of goods available today far exceeds that of the socialist era. In addition, life is returning back to the streets. In many ways, the emerging role of the historical core is akin to the vibrant "Latin Quarter of Paris" (Interview 15). It should be noted however that the phenomenon of commercialization is not a return to old patterns prior to socialism in the city centre because neither the historical core nor its shops have always had the strong touristic dimension that they do today (Interview 15). Further, many of the existing shops have either upscaled the goods for sale or renovated their establishments. Shops previously selling fruits and vegetables may today also sell convenience foods, beverages, and even souvenirs. As previously mentioned, the socialist state strictly regulated the provision of amenities. The diversity of merchandise available has drastically increased since 1989 as government-deregulated market mechanisms quickly replaced the centralized provision of goods and services (Interviews 8: 14). Unfortunately, the common attitude (public and private) in Prague today is that the new market economy will serve all needs (Interview 2). The current distaste for 'planning', the weak planning regulations, and the strong support for the free market economy have left very little regulated control over the types and numbers of local shops both appearing and disappearing in the historical core. As the research findings support, redevelopment has thus drastically altered the non-residential sector in the city centre during the transitional era (see Chapter 4). 3.7.3 Redevelopment and Historic Conservation Finally, it is important to mention that the redevelopment process in the historical core during the transitional era has been unique for reasons of conservation. The significance of historical conservation in the city centre cannot be over emphasized. The historic reservation is protected by Czech conservation laws and is listed as a UNESCO World Heritage Site (Section 2.4.3). All redevelopment and revitalization projects must directly consider the historic and cultural value of both the site in question and the whole historical reservation area. Thus, there is great potential for strong conservation traditions and regulations to play a positive role in the 53 revitalization of the city centre of Prague. In 1981, specific segments of the historical core were listed as legally protected areas. From then on, all new developments and alterations (including those outside the preserved area) that influence the historical area had to be checked for their impact on the protected area (Sykora, 1995c). The Prague Institute for Monument Protection was created as branch of the city administration to oversee the maintenance, conservation, and upgrading of buildings in the historical core. Redevelopment projects must be screened by the Institute from a conservation perspective regardless of whether the building in question is protected by law. All redevelopment schemes within the area are checked for their impact on the historical reservation and must follow a strict set of guidelines and principles. Decisions regarding various internal or external changes to buildings must be approved by the Monument Protection Institute44. However, Prague's Magistrate office has the final authority regarding building changes during redevelopment projects. Given that it is merely an advising professional body to the Magistrate, the recommendations of the Protection Institute can be superseded by city officials. The Institute does not have any jurisdiction to either object or make recommendations regarding the functional use of a building, but rather can only comment on the building structure itself. The Institute does not believe they have enough tools and authority to protect the city centre against the pressures of commercial development (Interview 16). In addition, the Institute does not feel that the UHA is currently employing sufficient measures to protect the historical core, given the city's current support of commercial development. From the perspective of property developers, the Institute is a vehicle that slows down the redevelopment procedures in the historical core (Interviews 1: 3). From the perspective of conservationists, the Institute is one of few vehicles available that helps to maintain buildings, cultural landmarks, communities, and the sense of place that is represented in the historical core (Interview 16). For example, the Institute for Monument Protection regulates height restrictions, building colours, facades, glasswork, and materials. 54 In general, the historic aspect of the city centre has added another challenge to the redevelopment process. The unique historical character of the area is the very thing that makes the city centre so desirable, yet it is under constant threat. On the one hand, tourist and business activity in the historic area has prompted much of the rapid economic development and prosperity to Prague since 1989. On the other hand, the historic character of the area, through strict regulations and conservation laws, has prevented the overt and highly detrimental commercialization that has been found in other cities undergoing similar rapid transitions to market economies. The existing tension between development pressures and conservation of the area is not likely to disappear in the future and presents a challenge to urban planners in Prague. 3.7.4 Redevelopment and Local Citizens Although the strong protection laws virtually guarantees the conservation of buildings in the historical core, the conservation of the local lifestyle, neighborhood cohesion and residents in the area is not. According to various informants interviewed in this study, a central problem with the redevelopment of the historical core of Prague stems from the issue of who the emerging functional uses are serving (Interview 12). The redevelopment since 1989 in the old city has helped to revive the old city, it was really a historical slum before then. What is dangerous is that there is a disappearance of shops for people who still live there. Today, you cannot find normal shops with foodstuffs etc. The people are mostly old people with incomes lower than the national income and so they need shops for their incomes. The function of the old city is definitely changing because it starts to be a touristic zone. It is in some ways becoming artificial. (Interview 15) Data from the 1991 census indicates that local capital is weak and local customers are generally unable to pay prices demanded by shops catering to tourists. Further, the historical core's population is predominately elderly and thus often unable to travel large distances to purchase basic necessities. The numbers of existing neighborhood shops consequently has a great impact on the daily lives of local citizens. The rapid commercialization of previously empty ground 55 level spaces is also affecting local inhabitants given that new shops are free to concentrate on more upscale wealthy audiences. One method of keeping the population in the area is to ensure the provision of appropriate and affordable amenities required for local residents. Amidst all the urban redevelopment in Prague since 1989, there has been little research documenting the shifts in functional uses and their impact on the local citizens of the area45. Accordingly, the two case study surveys were conducted to determine shifts in the types and numbers of non-residential premises in the historical core. The case studies tested the current provision of amenities in the area. 3.8 SUMMARY Systems transformations in the transitional era have, and will likely continue to have tremendous impacts on the redevelopment of the historical core. The new and decentralized political and economic systems in the Czech Republic have altered the framework for urban planning in Prague. Having outlined the significant causes for and changes in urban planning systems in this chapter, the remaining chapters of the thesis focus on documenting case studies of the impacts and implications of these structural changes for local communities and the function of the historical core area. 45 A notable exception was a study by Turba (1993) in Vinohrady, within the second ring of Prague. Turba measured changes in numbers and types of shops within a four block radius between 1989 and 1992. 56 CHAPTER 4. CASE STUDY FINDINGS 4.1 THE NON-RESIDENTIAL SECTOR Given the monumental transformations in Prague since 1989, it is not surprising that planners have prioritized the emerging function of the historical core to be of critical significance to the successful redevelopment of the city. The objectives of the two surveys were designed in keeping with this emphasis on functional use. The surveys measured changes in a particular aspect of functional use, namely changes in the small scale non-residential or commercial sector. Chapter Four summarizes and analyzes the primary research findings. Shifts in the quantities and types of small scale shops and services were measured and compared with the socialist era to assess the impacts of larger redevelopment and structural changes in the historical core. Photos 5 and 6 offer examples of the shop types open in the area46. The surveys were designed to assess whether Prague's current administrative planning system has been successful in maintaining and servicing the local population and their needs within the area. The implications of the research findings for the historical core's; local population; conservation of unique historical character; future functional use and revitalization are also presented. 4.2 SURVEY CLASSIFICATION In the first case study, 330 non-residential premises previously owned by the Communist state, enterprises, institutions, or cooperatives were surveyed through personal observation. Each premise was privatized between 1991 and 1992 through public auctions with five year lease guarantees for the new tenants under the Small Scale Privatization Act47. The use of each premise in 1989 was compared to its observed use in 1993 and 1995 in order to assess shifts in functional use over time during the transitional era48. For the sake of brevity, references to shops from this point forward will connote both shops and services. 47 Information regarding the functional use of each site prior to 1989 was obtained from the Prague Privatization Agency (Prazska privatizacni komise). 48 It was beyond the research scope to assess whether each specific shop had upscaled its merchandise. This would have been a subjective judgment because the 1993 and 1995 surveys were not conducted by the same researchers. 57 Photo 5. Upscale Retail shop in the Case Study Area Photo 6. Basic Retail shop in the Case Study Area 58 The findings were then analyzed to determine variances in the numbers and types of shops, trends in consumption patterns, and changes in historical core's functional use over time. The research also included a second case study survey of every ground level premise (327) and informal sector vendor (64) on five major streets within the historical core49. The selected streets are all currently busy and active streets that are centrally located within the case study area (see Map 5). Together, the establishments on these streets present a mixed sampling of the types of shops frequented in the historical core by local neighborhood citizens, Czechs in general, and foreigners. This survey also determined the current functional use and type of goods sold. However, the second survey went one step further to determine the clientele of the establishments. From personal observation during visits to Prague in 1991, 1993, and 1994, it appeared that basic needs shops were rapidly replacing more upscale shops that had foreign rather than local clientele. For example, vegetable and fruit stores were rapidly disappearing while Bohemian crystal stores and exchange offices were continually appearing. The second survey tested this hypothesis by asking shop attendants to indicate the clientele of their businesses50. Customer categorization was divided into: local residents; Czech citizens in general; and foreigners (both tourist and business). Although an informed observer might discern the clientele of a shop based only on the merchandise, costs, and location of the shop, the owners were asked to provide percentage estimates for the clientele noted in order to increase the validity of the survey findings and to ease the categorization of the responses51. Overall, there was an 86 percent survey 52 response rate to the second survey . Based upon consultation with a Czech academic colleague, the streets Na Prikope, Na Porici, Dlouha, Vodickova, and Karlova were chosen for their location within the case study area, their mixed functional use, and their clientele. 50 The survey questions used in the second case study are listed in Appendix 3. 51 However, the clientele of the informal sector was determined by personal observation given that the clientele was visibly discernible and some vendors were unwilling to talk as they were operating without legal licenses. 52 Of the survey respondents, 79 percent answered with a percentage breakdown of clientele type and 21 percent answered without percentage indicators of clientele type. 59 Map 5. Location of the Five Case Study Streets In both surveys, the premises were first grouped into eight categories of functional use. These groupings were established because they represent the categorized breakdown of the shop types that existed at the end of the socialist era (see Table 4)53. The premises were further divided into four broad categories of goods and services (see Table 4). This second grouping was done to confirm that the analysis of changes in shops types over time was reflective of consumer consumption patterns and the actual clientele of the shops. The general clientele breakdown of the second grouping was as follows: basic and common goods were of interest and affordable to most Czechs and foreigners; luxury to some wealthy Czechs and most foreigners; and tourist to predominantly foreigners (Interview 18). 53 Appendix 4 provides a detailed listing of all the shops and services that made up the eight original categories. These categories were originally structured based on primary research conducted by a Czech colleague. Appendix provides a detailed listing of the breakdown of the four categories of goods and services: basic, common, luxury, and tourist. 60 Table 4. Surveys 1 and 2 - Shop Categorization FIRST GROUPING: SECOND GROUPING: SHOP TYPES GOODS AND SERVICES PROVIDED 1. Basic Food shops and Groceries 1. Basic 2. Kiosks and other Small Premises 2. Common 3. Restaurants and other Food Catering 3. Luxury Establishments 4. Tourist 4. Service Workshops 5. Special Facilities 6. Offices 7. Other Retail Shops 8. Storage and Empty Spaces SURVEY ONE FINDINGS In the first case study, 342 shops were examined in 1989, 362 shops in 1993, and 364 shops in 1995. The number of shops increased with time due to the redivision of one tenant premises into two or more shops. Table 5 and Figure 4 provide detailed breakdowns of the numbers of shops types in each category during each survey period. In general, the research findings suggest that the types and numbers of non-residential sector establishments within the historical core have been totally restructured since 1989. The city centre has become more commercialized, numerous new shops are emerging, and many old shops are renovating and upgrading their merchandise. 4.3.1 Shops and Services 1989 The majority of shops open at the end of the socialist era were retail stores, basic food shops, and restaurant and catering establishments (see Table 5 and Figure 4). Very few special facilities or offices existed in these locations at the time. This is indicative of the lack of the CBD function in the central area under socialism. In addition, the shops were spread throughout the case study area which reflects the Communist state policy of evenly distributing local amenities within urban areas (Interview 18). In general, the basic needs of locals were met in the socialist era within the case study area and other Czech urban areas (Interviews 12: 14). 61 Categorizing the shops into the four types of goods and services indicated that no luxury and very few tourist shops (five percent) existed prior to 1989 (see Table 6). The lack of tourist- oriented goods verifies that few tourists were visiting Prague due to strict state controls. Prior to 1989, the majority of small scale shops provided common (63 percent) and basic goods (32 percent). Thus, shops in the historical core were predominantly selling goods and services compatible with the needs of the local population at the end of the socialist era (Interview 18). 4.3.2 Shops and Services 1993 The Czech government had greater control over the number, type and location of shops in the historical core during the socialist era than today. Since 1989, Prague's urban planners not really taken a pro-active role in the regulation of small scale shops and services (see Section 3.7.2). Instead, the non-residential sector has largely been left in the hands of the market economy. Consequently, the surveyed premises had undergone substantial transformations by 1993. Massive redevelopment of the small scale commercial sector as part of the renovation of Prague (certainly the historical core) was one of the first indicators of the emerging urban market economy. Reflective of these renovation trends, 13 shops were under reconstruction and 38 shops had closed down by 1993. Only 53 percent of the shops that remained open were selling the same goods in 1993 as they were in 198954. Clearly, the amenities available in the historical core were radically different after only three years. Such restructuring of the small scale sector has been positive in the sense that since the end of the socialist era the diversity of goods available has improved enormously. 54 Mostly retail shops (44%), restaurants and catering establishments (22%), and basic food shops (20%) were selling the same goods in 1993 as 1989. These shops may have upscaled their merchandise, but generally remained the same. For example, if what was previously a restaurant remained a restaurant in 1993, but had added patio seating and a cafe, it was recorded as not having shifted categories. 62 Table 5. Survey 1 - Classification of shop types for 1989 /1993 /1995 CATEGORIES 1989 Percent 1993 Percent 1995 Percent Basic Food Shops 70 20% 41 11% 31 9% Restaurants and Catering Establishments 58 17% 70 19% 77 21% Special Facilities 2 1% 4 1% 3 1% Kiosks and Other Small Premises 38 11% 12 3% 11 3% Offices 6 2% 11 3% 12 3% Closed ~ ~ 38 10% 38 10% Under Reconstruction — ~ 13 4% 12 3% All other Retail Shops 131 38% 115 33% 147 40% Service Workshops 37 11% 44 12% 33 9% Data Not Available - -- 14 4% - - TOTAL 342 100% 362 100% 364 100% Table 6. Survey 1 - Breakdown of Goods and Services GOODS AND SERVICES 1989 Percent 1993 Percent 1995 Percent Basic 108 32% 53 15% 42 12% Common 216 63 % 185 51 % 199 55% Luxury 0 17 5% 21 6% Tourist 18 5% 42 12% 52 14% Closed 38 10% 38 10% Under Reconstruction ~ ~ 13 3 % 12 3 % Not Recorded -- - 14 4% -- -- TOTAL 342 100 % 362 100 % 364 100 % Table 7. Survey 1 - Variations in Shops and Services SHIFTS OVERTIME CATEGORIES 1989- 1993 Percent 1993-1995 Percent 1989-1995 Percent Basic Food Shops mmmmmmm -10 111|:24%!111 -39 - 56% Restaurants / Catering 12 21% 7 10% 19 33% Special Facilities 2 100% -1 1I12WI 1 50% Kiosks / Small Premises !llllll|6jllllll llllSlli -1 -8% -27 -71% Offices 5 83% "i 9% 6 100% Closed 38 38% ~ ~ 38 38% Under Reconstruction 13 13% -i -8% 12 12% All other Retail Shops -16 1111811 32 28% 16 12% Service Workshops 19% -11 - 25% -4 - 11% Total Shop Increases 20 6 % 2 1% 22 6% * A negative sign or shaded area indicates a loss in those types of shops 63 Figure 4. Survey 1 - Category breakdown percentages for 1989 /1993 /1995 1989 Category Breakdown Closed Service Workshops Basic Food shops 11% Restaurants and Catering Establishments All other Retail 38% Special Facilities Kiosks and Other Under Reconstruction Offices 1% Small Premises 0% 2% 11% 1993 Category Breakdown Service WorkshopsData Not Available Basic Food Shops 12% 4% 11% Restaurants and Catering Establishments Special Facilities All other Retail Shops 1% 33% Kiosks and Other Offices Under Reconstruction Closed Small Premises 3% 4% 10% 3% 1995 Category Breakdown Service Workshops Basic Food Shops All other Retail Shops 13% 12% Restaurants and 33% Catering Establishments Under Reconstruction Closed Kiosks and Other 4% 111% Small Premises 3% 64 Of the twenty new shops that were open in 1993, the majority were retail and service shops, whereas only one new basic foods shop and one new kiosk had opened. The lack of new basic needs shops has been constant throughout the transitional era, presenting a serious threat to the local area population. Not only have only a few new basic shops and kiosks opened, but also the number of old basic food shops and kiosks that remained open in 1993 has decreased radically (41 and 68 percent respectively). The basic food shops that disappeared between 1989 and 1993 generally became catering establishments and service workshops, with some conversion to office and retail space55. These numbers document the beginning of a trend that remains today. Very few new basic needs shops had opened and existing basic food shops in the case study area were being replaced with more upscale shops. These patterns endanger local citizens because the emerging shop types usually are not selling basic necessities and are often beyond their budgets (Interview 15). Thus, as early as 1993, the emerging new function of the historical core as a commercial network area was beginning to cater to a wealthier elite (both Czech and foreign). The 1995 findings indicate that the initially incremental shift by 1993 from a mixed residential and commercial area to an increasingly more commercial area has become entrenched. Local residents must therefore contend with the emergence of increasingly inappropriate and expensive shops. Further, the balance among mixed functional use within the culturally rich historical core had shifted. The area's function as a tourist zone and CBD had begun to dominate the pre• existing residential and more domestic functions of the area. The survey findings indicated that the number of offices had increased drastically, the number of restaurants and service shops had Appendix 6 outlines the breakdown of shifts in the eight categories over time including the changes from 1989 to 1993, 1993 to 1995, and 1989 to 1995. The chart documents the number of shops that remained in the same category and states what new category each shop had moved to. For example, the number of basic food shops that became offices between 1989 and 1993 is noted. 65 increased slightly, and the number of retail shops had decreased slightly by 1993 (see Table 7 and Figure 5)56. These changes are indicative of the emerging CBD function of the historical core and the development of a new tertiary sector in the city centre. The tertiary service sector has been become a predominant phenomena for urban economies within many cities around the world, certainly in the last 25 years (Daniels, 1985). Service industry activities can include anything from banking, financing, real estate and corporate support (quaternary services), transportation and communication services, or tourism industry services. Sociologists have often equated the emergence of a strong service sector with a new post-industrial society or city (Touraine, 1971). This development has of course been more rapid in cities within Western nations than it has been in the socialist cities. In the context of Prague, the growing tertiary sector is a relatively new phenomenon because the state concentrated heavily on an industrial economy during the socialist era. Today, the service sector (catering largely to businesses and tourists) is becoming the predominant employment sector in both Prague in general and the historic core in specific. In many ways, Prague is merely 'catching up' to a trend the service-oriented post-industrial trend that has become a norm in many other comparable developed and developing country urban areas. During the socialist era, Prague did not develop a CBD as in other Western cities, but rather spread commercial activity throughout the city. This pattern has changed dramatically since 1989. The historical core had quickly become the most popular business location in Prague. Both the many shops emerging catering to the business and quaternary sector in the historical core and the high numbers of new offices in the city centre in 1993 attest to this trend. Finally, the breakdown of the 1993 shops surveyed into the four categories of goods and services also documented some notable findings. Basic goods and services represented only fifteen percent of the total shops open in 1993, whereas in 1989, they represented 32 percent (see 56 The number of retail shops may have decreased partially as a result of a normal time lag for new owners to establish businesses under the new principles of a market economy. 66 Figure 6 and Table 6). Likewise, common goods and services had also decreased in 1993 to 51 percent from 63 percent of the total. Luxury goods represented five percent of the total and tourist goods twelve percent (over twice the amount of 1993). As the principles of the market economy became entrenched, luxury and tourist goods and services began to represent a larger proportion of the total non-residential sector. Thus by 1993, the target clients for shops within the historical core had begun to shift from the previously more analogous general public (including local residents) to the emerging elite Czechs and foreign consumers. In general, the function of the city centre and the clientele of its shops had both undergone some structural changes by 1993. 4.3.3 Shops and Services 1995 The 1995 survey findings were relatively consistent with those of 1993 (see Figure 4). In 1995, 52 percent of the shops open for at least two years remained in business with mostly retail, service workshops, and restaurant and catering establishments selling the same goods as in 1993. The percentage of basic food shops that remained open had dropped enormously within two years. In 1995, there had been a 25 percent loss of basic food shops in comparison to 1993. There were significant increases in the number of restaurants and catering establishments, offices, and retail shops open in 1995 (see Figure 4 and Table 7). The numbers of special facilities, service workshops, basic food shops, and kiosks declined notably. The emerging upscale market of shops and services catering to largely foreign tourists was once again documented in 1995. Of the shops that have shifted use between 1993 and 1995, the majority became retail shops, followed by service workshops, then catering establishments (Appendix 6). The changes further validate the prevalence of the service and tertiary sector developing in the case study area. A large proportion of the basic food stores that had disappeared either became restaurants and catering establishments, had closed, or were under renovation. Thus, service industry shops catering to both foreigners and businesses were replacing shops catering to local needs. 67 The division of shops open in 1995 into the four goods and services categories further supported the findings to date. Basic goods repeatedly decreased in 1995, representing only 12 percent of the total shops whereas common, luxury, and tourist goods had all increased. The slight increase in common goods does not necessarily mean that local Czech consumers have increased access to goods given that many common goods are not suited to local consumers demands (Interviews 6: 8). However, it is clear that the presence of luxury and tourist goods in the area is increasing and not likely to decline in the near future. 4.3.4 Survey One Conclusions In summary, the first case study emphasized some general changes in the numbers and 57 • types of shops operational between 1989, 1993, and 1995 . Based on the first division of eight shop categories, the findings indicated: • significant decreases in the numbers of basic food shops and kiosks; • significant increases in the numbers of restaurants, offices, and other retail shops; • consistent numbers of shops either closed and under reconstruction since 1993. Based upon the four goods and services categories, the findings indicated: • significant decreases in the numbers of basic goods and services available; • significant increases in the numbers of luxury and tourist goods and services available; • consistent numbers of shops either closed and under reconstruction since 1993. 4.4 SURVEY TWO FINDINGS In the second case study, ground level establishments on five major streets were surveyed to determine the types of goods available, the length of business, and the business clientele. Of the 327 formal sector shops surveyed, 70 were open prior to 1989, 171 opened after 1989, 29 were closed, and nine were under reconstruction. The majority of shops were retail, with basic foods and kiosks represented only a small minority of all shops (see Table 8). 57 Survey one findings have also been sorted between 1989 and 1995. These findings are largely consistent with the those of 1989 to 1993 and 1993 to 1995. Consequently, the findings between 1989 and 1995 are outlined in Appendixes 6 and are not discussed in detail in the text. Figure 5. Survey 1 - Category changes over time Basic Foods Restaurants and Catering Establishments s 60 o 40 1989 1993 1995 1989 1993 1995 Special Facilities Kiosks and Other Small Premises 1989 1993 1995 1989 1993 1995 Offices Service Workshops h 8 o 6 P 4 1989 1993 1995 1989 1993 1995 All other Retail Shops • Closed | Under Reconstruction 1993 1995 1989 1993 1995 Year 69 Figure 6. Survey 1 - Four Goods and Services Categories Basic Goods and Services Common Goods and Services 1989 1993 1995 1989 1993 1995 Luxury Goods and Services Tourist Goods and Services 1989 1993 1995 1989 1993 1995 Closed Under Reconstruction o 20 P 15 1989 1993 1995 1989 1993 1995 70 The second survey findings indicated that the historical core has become increasingly commercialized over time, mostly luxury and tourist goods are being sold, and the numbers of premises servicing local residents are decreasing. Analysis of the shops based on the four basic categories of goods and services indicated that luxury and tourist goods were sold at a many shops (39 percent), whereas basic goods were sold at only a few (11 percent). Not surprisingly, no basic food shops were found on Karlova and Na Prikope, two of the historical core's busiest tourist streets. Similarly, very few kiosks were found on the more touristic streets. Already a pattern similar to the first survey was beginning to emerge. The majority of shops within peak tourist areas were not offering basic needs, regardless of the area's local resident population. 4.4.1 Formal Sector Shops and Services 1989 The 70 shops open prior to 1989 represent only 21 percent of the total shops, indicating a drastic expansion of the retail market since the socialist era. The functional use of the city centre was again documented as becoming more commercial over time. Of the shops open prior to 1989, 54 percent were selling the same goods in 1995 as they were during the socialist era (see Table 9). In general, the survey conclusively supported the tendency for shops open longer than six years to continue to sell similar goods as were available under the socialist system. These established stores offer a sense of security and continuity for local consumers (Interview 20). However as indicated by the first survey these establishments are continually disappearing. Table 8. Survey 2 - Shop Categories by Street CATEGORIES Dlouha Karlova Vodickova Na Na Total Total Prikope Porici Number Percentage Basic Food Shops 7 0 4 0 8 19 6 % Kiosks 2 1 1 , 0 1 5 1 % Restaurants / Catering 10 10 8 8 7 43 13 % Service Workshops 8 3 6 8 10 35 11 % Special Facilities 1 0 2 2 0 5 1 % Offices 0 0 0 0 0 0 0% All Other Retail 29 47 34 28 44 182 56% Closed 13 2 8 2 4 29 9% Under Reconstruction 2 0 2 2 3 9 3 % Total: 72 63 65 50 77 327 100 % Total: Percentage 22% 19% 20 % 15% 24% 327 100 % 71 Of the shops indicating clientele, the majority were still catering to Czech citizens in 1995 (see Table 9). In short, businesses open longer than five years were mostly offering similar goods and services in 1995 and were catering largely to Czechs rather than foreigners. These shops reflect many other small businesses that have maintained similar goods and clientele over time. It is often the well established shop that have preserved the same goods and clientele and the new shops that concentrate on different clientele. It is possible that many of these old shops could be identified by the city as heritage sites and thus preserve the traditional use and clientele 58 of the shops . Although Prague's urban planners are well aware of this trend and its potential, it remains unclear whether the city will use these established shops as planning strategies for reaching the Master Plan's goal of maintaining local amenities and citizens in the area. 4.4.2 Formal Sector Shop and Services post 1989 Fifty-three percent of the respondents had opened since 1989, often times in ground level spaces that were not used for retail purposes during the socialist era but rather were empty, storage space, or residential space59. A large majority of these shops opened early in the transitional era because the legal mechanisms for private business operation were quickly put in place allowing for the redevelopment and commercialization of the historical core60. For example, there are some very old bakeries and delicatessens that still use traditional Czech methods and culture that locals frequent on a daily basis within the case study area. 59As residential space, these units were of relatively poor quality and were not traditionally designated to be used as housing. Thus, the loss of these spaces as residential space has not necessary been viewed as negative because of the inadequate living standards (Interviews 6: 10). Given that these spaces were frequently illegally used as housing, the city did not categorize them as residential after 1989. However, in order to compensate for any loss in residential space within the historical core, the city often requires that new owners replace the residential space on the upper floors of a building during renovation. 60 This is indicative of the fact that the small scale sector was one of the first sectors to undergo radical transition after 1989. 72 Table 9. Survey 2 - Breakdown of shop types open before and after 1989 OPEN PRIOR TO 1989 SHOP CLIENTELE SELL SAME GOODS TODAY Categories Number Percent Czechs Foreigners Not Indicated Number %of %of Category Total Shops Service 4 6% 1% 3% 1% 1 25% 1% Workshops Retail Shops 47 67% 29% 14% 25% 23 49% 33% Restaurants and 10 14% 3% 4% 7% 10 100% 14% Catering Establishments Basic Needs 9 13% 7% 0% 6% 4 44% 6% Total: 70 21% 40% 21% 39% 38 54% 54% OPEN AFTER 1989 SHOP CLIENTELE Categories Number Percent Czechs Foreigners Not Indicated Service 23 13% 5% 5% 4% Workshops Retail Shops 111 64% 23% 18% 23% Catering 23 13% 6% 5% 2% Establishments Basic Needs 9 5% 2% 0% 3% Kiosks 4 3% 1% 1% 1% Special Facilities 2 2% 1% 1% 0% TOTAL: 173 100% 38% 29% 33% •Percentage is of the of total shops, rather than of each category The large number of shops open after 1989 is indicative of changing function of the historical core. The high percentage of new shops reflects the emerging market economy and the increasing rapid commercialization of the historical core. Deregulation of the non-residential sector has ameliorated the network and number of available shops and services. In recent years, the city centre has become one of the most attractive places to work, visit, shop, and live (income dependent). The consistent numbers of vacant spaces and shops under reconstruction observed also attest to the increasing revitalization of the previously quiet and dilapidated historical city centre. In addition, the return of street life and urban activity in the case study area since 1989 (largely as a result of the increasing small scale commercial activity) increased the city centre's primary function within the urban hierarchy of Prague. 73 Nonetheless, the numbers of Figure 7. Survey 2 - Length of Business new shops opening have decreased Shops Open After 1989 with time (see Figure 7). This is 70^ ^7k 60 likely due to the limited small 50 40 30 1 business space available in the case 20 10 study area and the constraints on 5 3 to 2 to 1 to less new developments due to the plus 5 3 2 than 1 existing strong conservation laws. Length of Business (Years) The rapid commercialization of the city centre in a short time frame is beginning to peak because there are few spaces left to develop additional retail space. However, when the residential rents are deregulated, additional commercialization and threats to the local citizens in the city centre will occur (see Chapter 5). Urban planners are beginning to realize the implications for the historical core of these changes in the small scale commercial sector and the resulting shift in functional use (Interview 13). Officials are aware that the local population must currently live in the area due to regulated housing rents and the housing shortage in Prague, but are increasingly unable to find the necessary basic needs and amenities within their community. The ability of planners to maintain a living population in the area (as stated in their policy goals) is becoming increasingly difficult as the day to day services for residents are disappearing. Analysis of the shops over time according to the four categories of goods and services further highlighted this increasing problem. Luxury and tourist shops represented 36 percent of all the shops open for more than three years. The market for high-end goods serving tourists and wealthy consumers thus emerged early on. In contrast, the market for basic goods has been decreasing since 1992. In the last three years, only seven new basic food shops have opened in the surveyed streets, whereas 23 new tourist shops have opened. The financial returns from the 74 developing tourist sector are clearly rendering high incentives for new luxury and tourist-oriented businesses to open within the historical core. It is unlikely that the prevalence of the tourist industry in the historical core will decrease greatly in the immediate future given that the area's cultural, historical, and architectural heritage are the prime tourist attractions in Prague. Although the current municipal taxation system is not structured as such, there is the future potential for tourist dollars to be re-invested into the coffers of Prague l61. 4.4.3 Formal Sector Shop Clientele Of the total, 79 percent gave percentages for clientele CATEGORIES Clientele Percentage Breakdown amongst local residents, Czech citizens, and foreigners (not 1 0-9 percent 2 10-29 percent mutually exclusive). The findings were grouped into five 3 30-49 percent 4 50-69 percent categories in order to summarize the general trends of 5 70- 100 percent Table 10. Clientele Percentages consumer clientele for the shops (see Table 10). The results have been categorized according to shop type and clientele (see Appendix 7). The findings clearly indicated a bias towards foreigners (both business and tourist) given that foreigners were identified as customers at 89 percent of the stores, Czech citizens at 68 percent, and local residents at only 34 percent (see Figure 8). Of the shops that indicated local residents as part of their clientele, only 40 percent catered to a majority of local residents. Of the shops that indicated Czechs as part of their clientele, 52 percent indicated that their audience was primarily comprised of Czechs. The same was true for foreigners clientele. The research findings clearly indicate that the clientele of the retail sector of the case study area has definitely undergone transformations since 1989 in favour of foreign visitors. Once again, local residents were found to marginalized in the case study area. The large discrepancy between the minimum number of stores with local resident clients and those with 61 Interviews with city officials, academics, and professionals indicated that there has been much discussion on how to re-route the financial benefits of tourism back into the historical core area. The informants highlighted the fact that the city centre is currently bearing the full infrastructure, social, and economic costs of hosting the majority of tourists to Prague without receiving financial compensation for doing so. 75 foreigner clients was striking given that foreigners were relatively insignificant consumers in Prague before the Velvet Revolution. These findings demonstrate the historical core's fast pace of commercial change and the increasing dominance of foreign consumers in the area. Only three percent of shops indicated exclusively local resident clientele. This data is significant because during the socialist era the large majority of clients were local. In contrast, ten percent indicated exclusively Czech clientele and 13 percent indicated exclusively foreign clientele. However, it is possible that some shops which recorded Czech consumers were also unknowingly catering to some locals. Of those shops that served both domestic and foreign clients (about 70 percent), 46 percent catered primarily to foreigners, 35 percent to Czech 62 citizens in general, and 14 percent to local residents . Local residents were definitely less significant consumers in shops serving both domestic and foreign clientele in the case study area. When clientele was analyzed by shop type, it was found that basic foods and kiosks catered to a predominantly locals and Czechs (see Appendix 7). The fact that no basic food stores indicated foreigners as primary customers indicates that the few remaining basic foods shops remained able to draw local customers. This is one of few salient features of the redevelopment trends. Not surprisingly, other retail, restaurant and catering establishments, and service workshops were found to cater primarily to foreigners. This is primarily because the costs of these service industry premises are generally out of the price range for local citizens. According to the breakdown of goods and services, the majority of basic shops catered to locals (67 percent), the majority of common shops and luxury shops catered to Czechs (51 percent and 64 percent respectively), and the majority of tourist shops catered to foreigners (82 percent) (see Figure 9). The fact that Czechs were strong consumers of the common and luxury shops does not indicate that these stores are necessarily within the purchasing power of the average Czech citizen or local neighborhood resident (Interview 8). The merchandise of many of these stores is affordable only for the emerging elite class of wealthy Czechs. 62 Shops were identified as catering primarily to a particular clientele if they belonged to categories four and five (greater than 50 percent of clients frequented the establishment). 76 The majority of the shops frequented by local residents were basic and common shops, with no locals frequenting luxury or tourist shops. Czechs primarily frequented common shops and foreigners primarily frequented tourist shops. A small number of Czechs were cited as consumers of luxury and tourist goods and an even smaller amount of foreigners were cited as consumers of common goods. The demands of the each of the three consumers were thus found to be relatively distinct. 4.4.4 Informal Sector In order to determine whether the informal sector was catering to foreigners and selling luxury and tourist goods to the extent of the formal sector, 64 sidewalk vendors were surveyed 63 on the same five streets (see Photo 7) . Their merchandise was divided into three goods and services categories: basic; common; and luxury and tourist64. Of the total 73 items available, 69 percent were luxury and tourist goods and services, 12 percent were common, and 19 percent were basic (see Appendix 8). Generally, informal sector commodities were found to predominantly be luxury and tourist items. Furthermore, the majority of the vendor clientele was also predominately foreign. Of the total vendors, 50 percent (32 stands) catered exclusively to foreign customers whereas only three percent (two stands) catered exclusively to Czech customers. A mixed Czech and foreign clientele was found at 47 percent of the vendors (30 stands). Of the vendors with mixed clientele, 61 percent sold primarily to foreigners whereas only 12 percent sold primarily to Czechs. Of all the vendors, foreigners were documented clientele at 97 percent of the stalls (62 stands) whereas Czech citizens frequented only 50 percent of the total vendors (32 stands). The informal sector was clearly found to primarily be serving foreign rather than domestic clientele. Informal sector data collection was conducted during a single day to increase the accuracy of the comparison amongst the streets. Although the number of vendors changes from day to day, there are consistent numbers of vendors working during the weekdays. As such, the survey was done on a Tuesday and can be considered representative of most other weekdays. 64 Appendix 8 provides the detailed division of the specific goods and services in the each of the three categories. Luxury and tourist merchandise was grouped together because for the informal sector they were, in essence, the same merchandise. Figure 8. Survey 2 - Breakdown of Indicated Clientele of Shops Clientele of Shops 90 80 70 60 50 40 30 20 10 0 Locals Czechs Foreigners Figure 9. Survey 2 - Shop Clientele breakdown by Goods and Services Shop Clientele Breakdown 90% 80% • Locals • Czechs • Foreigners BASIC COMMON LUXURY TOURIST Goods and Services 78 Photo 7. Informal Sector Vendor The five streets presented varied patterns of clientele and merchandise. Greater numbers of vendors were operating in the more touristic roads than on the streets frequented by a more mixed clientele65. However, vendors on these more domestic streets tended to offer more basic and common items than did the more touristic streets. The domestic market for informal sector goods was thus smaller in comparison to the foreign market, but there were significantly more domestic-oriented vendors on the streets farther removed from the centre of the touristic zone. In general, analysis of street vendors on the five major streets does conclude that the informal sector is catering to a largely foreign audience and is selling mostly luxury and tourist goods. The more touristic roads were identified as Karlova and Na Prikope and the more mixed roads were identified as Dlouha, Na Porici, and Vodickova. 79 4.4.5 Survey Two Conclusions In summary, the formal and informal sector findings in the second survey indicated: • strong levels of commercialization in the case study area since 1989, especially early on in the transitional era; • the majority of shops catered to a foreign clientele; • decreasing numbers of new basic goods and services shops; • increasing numbers of new tourist and luxury goods and services; • shops open prior to 1989 were selling similar goods and services today to predominantly Czech clients; • many of the goods available in the case study area were luxury and tourist and many of the services were tertiary. 4.5 RESEARCH FINDINGS IMPLICATIONS The SWOT method (Strengths, Weaknesses, Opportunities, and Threats) of analysis was utilized to simplify the final assessment of the case study findings. The SWOT method provided a useful framework because it identified both positive and negative aspects of the research findings (see Figure 10)66. Given the assumption at the outset of the thesis that local citizens were becoming marginalized within the historical core, there was a strong tendency to concentrate strictly on the negative aspects of the case study findings. The SWOT analysis helped to identify some of the more salient positive elements of current non-residential sector in the city centre. 4.5.1 Strengths The case studies verified that redevelopment and commercialization of the historical core have been swift in the non-residential sector. These changes have strengthened Prague's economy, and as a consequence, the economic and political stability of the Czech Republic (Barlow, 1994). Further, the findings indicated that the diversity of goods available has increased radically since 1989, and as a consequence, the flow of people throughout the area and the return of street life have also increased. The revitalization of the area to date suggests that there are further opportunities to redevelop the historical core with positive results (Musil, 1993). Only the most significant strengths, weaknesses, opportunities, and threats will be discussed in more detail in the text while the remained are explained in Figure 10. 80 In addition, the clientele of basic goods shops is comprised largely local residents (although they are decreasing). It is possible that these shops will be able to survive amongst the competition of newer shops and still provide locally demanded goods and services. Finally, Prague 1 is taking one action that may strengthen the non-residential sector in the historical core. Rather than selling city owned buildings, Prague 1 is currently attempting to rent the ground floor spaces in these buildings to businesses and agencies which provide amenities and services for local residents (Interview 17). This public strategy is one salient feature which may help alleviate some of the negative aspects of the redevelopment documented in the research. 4.5.2 Opportunities Some opportunities highlighted by the case studies include the potential to establish a strong network of appropriate shops and services for locals in the city centre. Regardless of the fact that the findings indicated a highly foreign-oriented industry, there is still the potential for locals needs to be met if urban planners address this issue. For example, there is the potential for tourist revenues to be redirected into Prague 1 coffers. Given that tourism is not likely to completely disappear in the historical core, a realistic approach is to try and use tourism to the advantage of the local city dwellers. As Prague becomes increasingly commercialized and a new tertiary service sector continues to develop, there is the potential for urban planners to restructure their current administrative system to allow for more the financial returns from tourism and redevelopment to remain in the city centre. Prague 1 has indicated that these extra revenues would help to alleviate the emerging increasing disparities between locals and visitors (Interview 16). Finally, there potential for amenities and services regulations to be altered and thus change the direction of commercialization of the city centre in the future. 4.5.3 Weaknesses However, the research findings indicated that small scale commercialization is marginalizing local consumers and residents and is biased towards a select group of wealthier 81 consumers (foreign and Czech). The case studies clearly indicated that the non-residential sector has not favoured local customers since 1989. Planners need to have more effective regulations of this sector given that their quickly adopted 'hands off approach has threatened a critical mass of consumers in the area, the local residents. Prague's planners have the potential to enforce stricter regulations, but are currently not using their authority to its maximum potential (see Section 3.7.2). The city has yet to provide specific zoning guidelines that strictly regulate land use in the reservation area. Until such time, the historical core will most likely continue to slowly lose its residential areas and neighborhood qualities. In addition, the case studies indicated a heavy dependence on tourism within the city centre. Although this dependence is creating employment and income for Czechs, it has its weaknesses. Firstly, tourism in Prague is currently relatively seasonal with the majority of tourists arriving in the spring and summer. Consequently, some shop owners have found it difficult to maintain their businesses with only upscale merchandise during autumn and winter (Jette, 1995). The high turnover of retail and service shops noted in the case studies may be indicative of this pattern. Diversified merchandise with more common and basic goods may increase the likelihood of year-round clientele frequenting local shops. Secondly, there is a lack of diversity in the types of tourist goods being sold in the area (Jette, 1995). For example, there are numerous crystal and jewelry shops. This is problematic given that most spring and summer tourists are budget travellers who are unable to spend dollars on such expensive items. Thus, the current peak tourist season provides the biggest volume of visitors, but predominantly the most frugal customers who are less inclined to purchase upscale merchandise. The market economy may eventually correct this problem, but for now, tourist shops continually are replacing locally used common and basic goods shops. Thirdly, tourism is also having a negative effect on local culture and heritage. Concert advertisement flyers are strewn throughout the area's pedestrian streets, trash bins are overflowing, and patio restaurant seating is encroaching upon roadways. Czechs have a strong 82 traditional and association with their cultural heritage. The image of the historical core is one that best signifies these traditions for many Czechs (Interview 15). Tourism has in many ways, compromised the cultural atmosphere of the historical core given that the increasing commercialization of'tourist attractions' are overwhelming the attractions themselves. 4.5.4 Threats The increasing commercialization in the area is threatening other functions such as residential or social functional use (see Chapter 5). There is a large potential for high rents from retail shops to threaten the sustainability of other functions in the area. Private owners of restituted buildings often cannot afford the necessary building maintenance and upgrading costs that housing a local business may cost and are accordingly forced to seek out other sources of income from deregulated sectors of the economy. As a result, basic goods and services may be converted to luxury or tourist shops run by foreign companies that are willing to pay market value for the retail rents based on their prime location in the city (Healey and Baker, 1995). Given that the city does little to regulate the types of shops going in, building owners are free to rent space to tenants ranging from a Western fast food chain to a Bohemian crystal store. Often times, the demands of local consumers and historical interest in preserving the intimate character of a street become subordinate to the highest commercial bidder. The incoming tenant is often unconcerned with the local character of the neighborhood and local clientele (Interview 22). These patterns indicate a need for a pro-active role by either Czech locals or urban planners to make sure that development pressures do not override the local cultural and personal interests. As projected at the outset of the research, the local population is in danger of being outpriced and thus, displaced from their traditional neighborhoods within the historical core. The case study research and key informant interviews verified that the local population (and often the average Czech citizen) is incapable of paying the prices demanded from the high end luxury and tourist goods. It is unclear whether the current patterns of shop types and clientele will remain constant in the future. 83 Figure 10. SWOT Analysis of the Non-Residential Sector Case Study Findings CASE STUDV FINDINGS STRENGTHS WEAKNESSES • Increased numbers and diversity of shops and • Urban planning authorities have lost their goods available since the Velvet Revolution previous control over the types of retail and • Basic goods and services are still catering to service sector shops and their location within local citizens regardless of drop in numbers of the historical core of Prague these types of shops • Shop types are biased towards a select group of • Local citizens, in theory, have the opportunity consumers (wealthy Czechs and foreigners) to shop outside the city centre for affordable • Prague's urban administration is not currently goods and services using its authority to the full potential to • Shops have increased the flow of people regulate shops throughout the area and contributed to the • Mechanism do not exist to retain tourist general revitalization of the historical core revenue in the area • Street life and activity is returning in the • Reliance on tourism for income is not historical core guaranteed as constant in the future and • Increased income for local businesses tourism is currently relatively seasonal • Prague 1 district authority is using city owned • Insufficient financial resources are available buildings to provide amenities and services for renovating and maintaining buildings • Redevelopment and conservation laws do not take shifts in functional use into consideration OPPORTUNITIES THREATS • Tourism has the potential to provide financial • Local residents will become completely revenue for Prague 1 coffers marginalized in their neighborhoods • Development of new tertiary employment • Increasing commercialization is threatening sector for Czechs in Prague other functions in the area (social / housing) • Chance to establish strong network of • Building owners may be forced to relocate appropriate shops and services in the area locals to get greater rents from deregulated • Increasing commercialization is contributing to sectors (commercial / office / foreign tenants) the financing of building and area • Demands of a select group of consumers revitalization (wealthy Czechs / foreigners) dominates the • Capacity for the current transitional urban demands of less wealthy consumers planning administrative system to be • Tourist goods and services may become restructured entrenched in the market and permanently eliminate basic goods in the market • Demands of the market economy and tourists will prevail • Tourism may eradicate day-to-day use within the historical core • Priorities of developers and building owners will prevail • Unique character of the area is threatened by the increasing commercialization of small scale shops and pressures from developers • Lack of planning initiatives address changes in the non-residential sector 84 If the present division of goods and services prevails in the future, the historical core will likely become increasingly expensive and cater to wealthy and foreign clients. Without the existence of a network of shops and services that cater to the local clientele, the permanence of the existing local community is severely threatened. Gentrification of the historical core may also increase when rents are deregulated (see Chapter 5). At present, the unique historic character and culture originating from the 9th century in the city centre is also threatened to some extent. The transformations in the small scale commercial sector have significantly impacted the unique character of the area. Increasing commercialization, tourists and tourist oriented shops, and rejuvenation of street life are encroaching upon existing local residential neighborhoods (Interviews 12: 17). Shops previously selling local specialties are now often selling luxury or tourist goods. Streets previously frequented by local pedestrian traffic are now inundated with tourists, taxis, and tour buses. Buildings previously owned by the state are being converted into traveller hostels. Local pubs and restaurants are outpricing local clientele as their prices are geared towards foreigners. Conversations with numerous Czechs indicated that many locals and Praguers no longer visit the historical core because they feel it is now too expensive and a 'tourist zone.' However, the unique ambiance of the historical core has yet to reach an irrevocable point of no return. The charm of Prague remains (as the number of tourists to the city attests), but is visible today amidst the increasing commercialization of the historical area. Although existing conservation laws protect the built form within the reservation area, few regulations and policies exist to protect the more subtle aspects of the unique cultural atmosphere. Specifically, the significance of conserving the area's local residents, pedestrian- oriented areas, traditional shops and amenities are presently neglected. The current concentration on short-term economic policies has left conservation without direction. Prague's Institute for Monument Protection and the Prague 1 appear to be more aware of these issues than are politicians and urban planners. The city has prioritized the city centre as critical to the 85 redevelopment of Prague in its strategic and master plans, but has yet to provide very many concrete methods of conserving the reservation area. This lack of planning initiative to address the small scale changes documented in the case study findings is, in some ways, the most serious threat to the historical core. 86 CHAPTER 5. PLANNING, REDEVELOPMENT PA TTERNS, AND POLICY RECOMMENDA TIONS 5.1 FUNDAMENTAL STRUCTURAL SHIFTS Both the key informant interviews and the case study findings indicated that there have been fundamental structural shifts in the planning and redevelopment of Prague since 1989. The research also suggested that revitalization of the historical core has largely been instigated by the restructuring of the small scale commercial sector. The majority of functional use changes have occurred at the street level to date. The implications are therefore of consequence to numerous people, including local residents and other pedestrians using the area. These transformations have been not only been prompted, but are also largely regulated by the Czech Republic's emerging market economy. The actions of the city and the statements made during interviews with urban planners indicated a tendency to underestimate the future ramifications of the 'seemingly' small and incremental changes in the use of the city centre. Planners have yet to maximize the potential to regulate these structural shifts in the urban environment using measures beyond the market economy. Both urban planning in general, and land use changes in specific have been left alone to a great extent in recent years. The case studies documented the resulting threat to the historical core's network of shops and services. Shops are disappearing and becoming either inappropriate or expensive for the needs and budgets of local citizens. Simultaneously, new shops and services catering to foreigners and businesses are continually emerging. As a result, the historical core is quickly becoming a tourist zone and a CBD centre for Prague. Both of these trends are seriously threatening the permanence of the residential character of the city centre. Given that regulated rents continue to protect the leases of Czech tenants, the increasing commercial and tourist functions are becoming serious competition and hindrance for 67 residents who would like to remain in their neighborhoods and are not able to move elsewhere . 67 To reiterate, the current housing shortage in Prague (and most of the Czech Republic) largely prevents residents from moving to other flats. In some circumstances it is possible for people to exchange their flat with someone else 87 These pressures will only worsen when housing rents are deregulated and landlords are no longer required to keep Czech tenants in their buildings. In general, the structural shifts documented in the case studies have a great potential if not addressed to permanently alter the character, use, and permanence of the unique city centre of Prague. Chapter Five summarizes the remaining issues of relevance to redevelopment patterns that were not presented while discussing the case studies. First, the implications of the eventual deregulation of the Czech housing sector for the future livelihood of the historical core are discussed. Second, the effectiveness of Prague's current planning system and policies in dealing with changes in both residential and non-residential functions is assessed. Third, the redevelopment patterns in the historical core are appraised based on the case study research findings. Generally, redevelopment and planning patterns are found to have both positive and negative attributes. Chapter Five also includes a discussion of two successful redevelopment case studies in Prague to present positive alternative planning initiatives currently being undertaken by members of the private sector. 5.2 RESIDENTIAL PATTERNS Structural shifts in the residential sector also have the potential to significantly impact the historical core's future redevelopment. The research did not concentrate on shifts from residential to other uses because to date the changes that have occurred are marginal in comparison with the 68 * monumental transformations that have occurred in the non-residential sector . The housing sector in the Czech Republic (for Czechs, not foreigners) remains strictly regulated to minimize the social and economic consequences of forcing Czechs to cover the real costs of housing. In value. Often, moves would require a shift into market value housing that is well beyond the budgets of most Czechs. Thus, tenants who are living in Prague 1 are being increasing threatened by the lack of services available to them and the pressures from business and tourist functions that are continually encroaching upon their neighborhoods. 68 In addition, researching shifts in residential use would have been extremely difficult for methodological reasons. It is difficult to obtain the information required to make detailed assessments of any specific shifts in use of particular buildings. The city is currently lacking up-to-date information regarding such changes. What is more, many of the shifts from residential to commercial use that have occured are done illegally given that there are still strong regulation of residential rents. 88 1995, the average rent for a three bedroom flat was approximately fifteen percent of the average annual Czech family income (Sykora, 1995a)69. Since 1989, service costs have been fully • 70 • liberalized and rents have been increased numerous times . However, eventual rent liberalization cannot be avoided if landlords are expected to cover the real costs of building maintenance and renovation. Although there has been quite substantial replacement of residential spaces with alternative uses (predominantly commercial and office space in the case of Prague's historical core), these changes will not reach a maximum threshold until the Czech housing sector is deregulated and tenant protection rights are reduced. Currently, the 1964 civil code prevents landlords from evicting tenants unless a court approves the eviction and it is based on one of a 71 • very few permissible reasons for eviction . If tenants are evicted, it is the landlord's responsibility to provide them with another flat elsewhere in the city of the same or greater quality as their previous accommodation. In the context of the historical core, many tenants are likely to be relocated from old historical buildings in Prague 1 to more modern socialist housing flats in the city outskirts. Thus, the enticing rents to be gained from commercial businesses (both small scale and corporate) can sometimes force local residents to relocate outside their traditional neighborhoods and can decrease the availability of residential space in the historical core. However, the stringent eviction guidelines and the regulated rents have made it relatively difficult to convert residential to commercial space in the city at present. The pace of change of uses will speed up as the Czech Republic nears total deregulation of the housing sector. During the socialist era, rents were approximately five percent of the average Czech family budget. 70 Housing rents increased by 100 percent in 1992. In July 1993, these rents were doubled, and in January 1994, the rents were increased another forty percent (over the already doubled rents) (Eskinasi; 1994). 71 Some examples of permissible evictions include: a building must be renovated or demolished for the sake of the common good; a building must be renovated and will not be liveable during renovation; and the space in question is connected to commercial space and the commercial tenant wants to utilize the connected residential area (Eskinasi; 1994). 89 During the socialist era, strict state regulations made it extremely difficult for individuals to transform residential to commercial space without state permission. However, during the transitional era, the incentives for financial returns from deregulated rent sectors (such as rents from foreigners or non-residential rents) have pressured building owners to convert the use of buildings from residential to commercial space in the historical core whenever possible. Building maintenance costs are much more likely to be covered with rents obtained from deregulated sectors. Regardless of the controls that exist which prevent changes in use, many residential spaces have been converted to other functions in the historical core since 1989. It is not uncommon for flats having the name of an individual on the bell outside the building to actually be home to a business. Much of the foreign demand for prime office space located within the historical core is being met in previously residential flats. As these conversions occur, the mixed functional use of the area (which has always including a residential component) is becoming increasingly jeopardized. As affordable housing space disappears within the city centre, the permanence of the local population in the area is at a greater risk.. The potential for gentrification to occur in Prague is thus building and may become prevalent when the housing sector is fully deregulated. The development of some pro-active urban planning strategies for maintaining residents in their neighborhoods prior to complete rent deregulation could therefore be of use. Coupled with the eventual deregulation of housing and its subsequent threat to existing tenants is the current market for office space in the historical core. Both of these factors are shifting the use of the city centre and placing strong pressures to decrease the residential function of the area. The demand for office space in the historical core has been strong and expedient since 1989. The function of the city centre has consequently undergone a metamorphosis and the commercial elements have begun to dominate the area. The availability of office space at the end of the socialist era was marginal. In 1990 there was a severe shortage of office space in Prague 90 whereas by 1993, the available supply of offices had increased sixfold since 1992 (Sykora, 1995). "Just five years ago, there was a sever shortage of office space in downtown Prague, with virtually no offices suited to Western needs. Today, office-building developers are in a frenzy to catch up with demand, as an increasing number of businesses look for upscale accommodation. (Prague Post. 1995) This demand for upscale offices is both for newly constructed and fully furbished modern office space as well as for renovated (usually converted from residential) office space within historical buildings of unique character and location within the city centre. The prestige associated with having a company headquarters in the prime CBC centre of Prague is of great importance to many large companies, especially Western businesses (Interviews 8: 10). Once again, the rents obtained from these sectors far outweighs the marginal rents from Czech tenants. In summary, transformations of the residential sector to date have served to decrease the available amounts of affordable housing space within the historical core. These changes are likely permanent and will only increase in the future as housing rents become more liberalized. The demand for office space in the same area has also pressured the residential use of the area. The survival of local area residents may become seriously questionable under these circumstances. Similarly, the unique characteristics of the historical core will be undeniably altered (likely for the worse) if residential functions continue to decrease and commercial functions continue to increase. Unless such transformations are regulated, it is likely that these trends will only intensify and quicken as future redevelopment of the historical core continues. 5.3 PRAGUE'S URBAN PLANNING SYSTEM The conversion of building use within the historical core is merely one of many issues that the city of Prague has had to contend with during the transitional era. Prague's planners have been given a dual task of developing a completely altered planning system free of the imposed requirements of the Communist system while simultaneously dealing with the many redevelopment and planning issues that have emerged since 1989. The city has worked hard to 91 address the more general structural governmental and market changes that have impacted urban planning in Prague during the transitional era. City officials have relied heavily on Prague's strong tradition of urban planning to establish a new planning framework outlined in the new master plan. This section provides a brief assessment of the merits and deficiencies of Prague's current urban planning system. The transitional era has presented planners with an opportunity to restructure the administrative system to reflect both the new system of governance and the redevelopment pressures in Prague. There have been some extremely positive attributes to the new planning system that has evolved as well as some negative attributes. The following SWOT analysis appraises the current urban planning system in Prague based on the research findings 72 (see Figure 11) . 5.3.1 Strengths The strong tradition of planning in Prague provides a solid base on which to construct a more democratic municipal administration system during the transitional era. The new master plan addresses the major political and social elements of new society and eradicates the now inappropriate elements of urban planning designed for the socialist era. In addition, Czech planners have indicated a keen interest in learning from the planning experiences of other countries (Interviews 3: 12). Although the experience of each city is unique, there are some common planning lessons that can be learned and applied in the Czech context. The expedient pace of redevelopment change in Prague increases the possibility for fundamental planning blunders and thus increases the significance of understanding other planning experiences. These salient features of the Czech system make it more feasible that planners can operate in a working environment able to address the critical concerns raised in the thesis regarding the changing function of the historical core. Only the most salient features of the analysis will be discussed in detail. The remainder are presented only in point form in Figure 11. 92 Figure 11. SWOT Analysis of Urban Planning in Prague PRAGUE'S URBAN PLANNING SYSTEM STRENGTHS WEAKNESSES • Strong tradition of urban planning in Prague • Underutilization of financial sources and • New political system allows for more planning mechanism to address urban democratic system of municipal administration development • Strong interest to learn from the experiences of • Inadequate dialogue between various levels of cities in other countries on part of Prague's planning administration urban planners • Master plan does not include clear regulations, • Master plan addresses transformations in the especially shifts in land use transitional era and eradicated now outdated • Inadequate planning mechanisms and socialist planning mechanisms regulations • Urban planning lack adequate public participation • Master plan scale (1: 25000) is too general for effective regulation of functional use OPPORTUNITIES THREATS • Planners can use the existing regulations and • Enormous financial constraints on city policies to enforce appropriate redevelopment • Short-term economic gains will prevail over of buildings in the historical core long-term strategic planning • Transitional era is allowing fundamental • Commercial pressures will dominate the structural changes in administration system planning of the redevelopment process during • Revamped planning system could more the transitional era effectively regulate shops and services and • 'Laissez-faire' planning policies will result in changing functional use of the historical core permanent changes in functional use of the city centre, will threaten the historical characteristics and the permanence of local residents 5.3.2 Weaknesses The research finding indicated that the most significant flaw of planning in Prague is that planners are not using all the mechanisms available to their full extent to address key planning issues in Prague. To summarize, the case studies indicated the following critical issues are not being adequately addressed by city administration: the implications of the shifting non• residential market in the historical core; the potential for radical restructuring of the multi• functional use of the city centre; the potential for tourist and commercial functions to dominate the residential use of the area; the resulting threat to the permanence of local residents; and the threats to the unique neighborhood character from redevelopment pressures. These inadequacies 93 largely result from the current concentration on short-term economic gains. Although urban planning was subordinate to larger political and economic principles during the socialist era, planning was conceptualized using a more long-term strategic framework during the socialist era. Key informant interviews indicated that planners are somewhat hesitant to use existing mechanisms in order to take a more pro-active role in the redevelopment process. Planning regulations (such as building permits, the guidelines for development in stabilized and non- stabilized areas, and guidelines controlling functional use of buildings) are currently not maximized. This resistance is likely due, in part, to the current negative public attitude in the Czech Republic regarding 'planning' and regulations. Pressure from market economy oriented municipal and national politicians is also likely pressuring planners to adopt a relatively 'hands off approach. Interviews with strategic planners and private professionals indicated a fear of using enforcement mechanisms to take a more pro-active role regulating the distribution of types of shops and services in the historical core. Zoning regulations on functional use as known in North America are currently absent in Prague. There is room to increase the use of regulations in the redevelopment of the area within the existing system. Other weaknesses in the current planning system include the distinct lack (verging on non-existence) of public participation in Prague and lack of dialogue among the various levels of planning administration (see Section 6.4). Specifically, there is a lack of dialogue amongst the city Magistrate's office and the local district authorities. There is also inadequate utilization of financial resources for urban redevelopment in the city centre. Finally, the scale of the forthcoming master plan is too general to effectively regulate changes in functional land use within the historical core. The master plan is also extremely physical land use oriented and thus lacks a balance of social and economic aspects of planning. The plan also lacks specific planning tools to regulate urban redevelopment due to its broad nature. In general, the current administrative urban planning system in Prague has room for improvement. 94 5.3.3 Opportunities Although numerous planning opportunities exist, discussion will be limited to only two 73 key possibilities . First, planners can utilize existing policies to have greater control over the redevelopment of the historical core. For example, conservation laws that promote the historical character of the neighborhood can be used more as a planning tool. The Prague Institute for Monument Protection currently works in relative isolation from strategic planners. More traditional planning tools such as the laws regulating stabilized and unstabilized areas (the closest thing to zoning that exists in Prague at present) (see Section 3.6.3) could also be further utilized to have greater control over redevelopment, certainly of small scale commercial shops and services. Similarly, the city could donate more money and effort to regulating shifts in the use of buildings, especially from residential to commercial use. At present, city officials find it difficult to regulate these changes even though there are laws that prevent such shifts in building use from occurring. Second, there are also new initiatives open to the city given that the recent structural readjustment of the entire system of governance in Prague. Although a new system of planning has been set up, adjustments are continually being made. Therein lies a window of opportunity to revamp aspects of the new system that do not appear to be working. This may be one method of redressing the negative aspects of redevelopment for the local citizens that were outlined in the case study findings regarding shops and services within the historical core. 5.3.4 Threats The case studies highlighted a pattern of commercial pressure domination of the redevelopment process in the transitional era. The 'laissez-faire' attitude of planners has helped to promote this imbalance in the fragile urban environment of the unique historical core. These patterns have negative implications for the historical core. Specifically, there is the potential for the previously multi-functional use of the city centre (a balanced mix of residential, commercial, 73 Discussion is kept brief here because additional opportunities are suggested in the policy and recommendations sections of the concluding chapter. 95 and tourist functions) to become permanently imbalanced. The shifts in use documented in the case studies are only at the small scale level at the moment. There is a great threat that these changes will not only increase, but also become entrenched. The historical core may lose its residential charm and become stuck with only commercial and tourist functions. As discussed throughout the thesis, the unique historical nature of the area and the permanence of its residents are also threatened by these commercial pressures. To its credit, many of these threats stem directly from the fact that the city is currently operating on a tight budget. 5.4 URBAN REDEVELOPMENT PATTERNS Urban redevelopment in the historical core has been swift and dominant during the transitional era and has therefore drastically altered the look, feel, and use of the city centre of Prague. The city of Prague has the capacity to regulate these redevelopment forces through planning policy guidelines, regulations, and building and construction permits. The SWOT appraisal in Figure 12 gives a brief summary of the effectiveness of redevelopment patterns in the historical core of Prague74. 5.4.1 Strengths The existing strong conservation laws have been relatively useful for protecting the physical assets of the historical core that were so well preserved during the socialist era. As previously mentioned (see Section 3.7.3), building redevelopment within the historical core is subject to extra scrutiny based on the unique historic character of the area and its monuments. In many ways, this has been the saving grace of the city centre thus far. Without the strong and well conserved starting base and the 'relatively' stringent conservation policies, the historical core of Prague may have already lost many of its cultural features and heritage neighborhoods as has been the case in many other cities experiencing redevelopment. Prague is therefore less likely to fall victim to commercial redevelopment pressures and lose traditional neighborhoods Only the most salient features of the analysis will be discussed in detail. The remainder are presented only in point form in Figure 12. 96 as has occurred in cities such as Singapore. Finally, although they present many problems, tourism and the market economy have been a strength in the sense that they have contributed to the revitalization of the historical centre (see Section 3.7). Figure 12. SWOT Analysis of urban redevelopment patterns in Prague URBAN REDEVEI.OPMEN T ISSUES STRENGTHS WEAKNESSES • Strong conservation laws help to protect • Weak planning guidelines are regulating unique character of historical core redevelopment in the historical core • Socialist era preserved the city's unique • Heavy reliance on tourism for commercial cultural heritage activity • Tourism and the market economy contribute to • Tourism is concentrated in the historical core the revitalization, redevelopment, and use of of Prague rather than being dispersed the historical core Urban planners tend to support the pressures of the market economy OPPORTUNITIES THREATS • Planners can learn from the experiences of • Pressures from development and tourism other countries threaten historical core, its citizens, and its • Potential to use tourist revenues towards the residential character revitalization of the historical core • Loss of unique identity of the historical core • Pressures on the historical core can be reduced • Current concentration on short-term market by concentrating new developments on the economy policies threatens future implications outskirts of the city of redevelopment schemes 5.4.2 Weaknesses The major flaw with redevelopment to date has been the lack of guidance over the process. Interviews with developers reiterated the fact that the city of Prague has a relatively 'laissez-faire' attitude towards redevelopment projects in the city centre. Developers' requests to change the functional use of buildings (especially at street level) are generally not being resisted by city employees issuing building and construction redevelopment permits (Interviews 9: 11). In addition, the concentration on the short-term ability of the market economy to take care of many complex redevelopment issues is short-sighted. The redevelopment of the historical city centre of Prague is deserving of more consideration given its cited significance in the overall redevelopment of the city of Prague. Finally, commercialization of the city center need not remain strictly as tourist-oriented as it is currently. The city could work to have more control 97 over the small scale commercialization that was documented in the case studies as a critical element of urban redevelopment since 1989. 5.4.3 Opportunities One strategy that is a definite opportunity at present is for Prague's urban planners to learn from the previous redevelopment experiences of cities in other countries. During the socialist era, it was difficult for planners to travel outside Czechoslovakia and therefore to be exposed to a variety of alternative redevelopment programs. Planners were generally trained under the socialist system and were accustomed to very regulated patterns of urban development. Today, Czech planners are studying and travelling abroad to learn from their colleagues in other nations. Similarly, the dialogue within Prague is expanding as foreign planners visit Prague and interact with Czech planners. Furthermore, the opportunity to reduce pressures on the city centre exists if new developments and development of secondary tourist attractions are concentrated in areas outside the historical core. This is one policy that the city of Prague has adopted in the strategic framework of the upcoming master plan (UHA, 1993). The strategy will be effective because developing outer area business, commercial, and tourist districts will relieve current demands oh the historical core. The conflicting pressure for the city centre to handle various urban functions including its role as the national capital, the CBD of Prague, a peak tourist area, key commercial district, and residential neighborhood will be alleviated somewhat as new developments and 75 renewal of alternative tourist sites draw people to outer district areas . The policy is also viable because there is will likely be a strong demand for some of the commercial and business functions to be redirected beyond the boundaries of the city centre. Not all companies in Prague require or desire office space in the city centre because the high costs of having the prestige of a business address in Prague 1 are not always a demand and the high Western prices for renting office space in the city centre are not always affordable. Further, 75 Areas that have been designated by the city for futher expansion include Holesovice and Smichov, both inner city areas surrounding the city centre that are currently in relative states of disrepair. 98 some businesses would prefer the modern amenities that are more readily available in the newer buildings outside the city centre (Interview 6). By positioning more companies outside the city centre, the pressures on the residential functions and local shops and services in the historical core may be somewhat relieved. Likewise, emphasis on tourist sites beyond the traditional boundaries of the city centre 76 may also reduce the pressure to redevelop the area predominantly as a centre for tourism . Given that there has been forty years of urban neglect during the socialist era, there are attractions in Prague's inner and outer rings that have not yet been developed to the extent as tourist sites within the historical core. The reduction of tourist pressures on the historical core will contribute to the conservation of the unique character of the area and its tradition of multi• functional use. For the many tourist attractions within the historical core, the city can work towards maximizing municipal gains from incoming tourist dollars (see Chapter Six). 5.4.4 Threats Forming the crux of the thesis research, the largest threat documented was the potential for commercial redevelopment and tourism pressures to become dominant in the historical core. As this tendency increasingly occurs, particular aspects of the historical core become more threatened. As previously discussed, the residential character of the neighborhood and the residents themselves are threatened by both development pressures and tourism77. The unique historical character of the area is also at risk because city centre developers are not always concerned with the conservation of the cultural and heritage elements of value to Czech, both local and general. Of course, conservation laws do offer some protection against the complete restructuring of building appearance, but do not protect against the inappropriate uses of buildings. If the city 76 Some of the suggestions for the potential rejuvination of tourist sites located in areas surrounding the historical core include: the waterfront area between the Charles Bridge and Stvanice Island that edges the current tourist area; the northern area that edges Hradcany (Prague Castle), and Holesovice (including the adjacent park area, exhibition grounds, and access to the Vltava river. 77 No further discussion of this particular threat is provided at this point given that it has been discussed throughout the thesis. 99 centre were to become inundated with casinos, offices, and Western name retail shops, it is scarcely arguable that the inherent Czech cultural identity associated with the area would be lost to a great extent. As the pride of Prague (and of the Czech Republic for many), the historical core has already lost some of its unique charm according to many Czechs (Interview 13). The concentration on short-term economic gains (often the financial returns to developers) that is frequent for current redevelopment projects present another threat to the city centre. Obviously, developers will always view profit as their fundamental project objective. The threat comes from the lack of public sector actions or responses to the current emphasis on short, rather than long term development gains. It has now been six years since the Czech Republic implemented a market economy and the success and stability of the Czech economic system is now beyond question. As such, planners are no longer in a position to justify short- term policies based on the necessity to create a stable urban environment to facilitate the successful implementation of a market economy in Prague. Instead, there is now surely reason to move forward and concentrate on strategies that address the long-term effects and attributes of urban redevelopment. Hopefully, the new master plan will do just that. 5.5 SUCCESSFUL CASE STUDIES Two renewal projects in Prague offer some successful alternative planning strategies to the current redevelopment patterns that were generally witnessed in the historical core. Both case studies have numerous salient features that address some of the discussed inherent social and economic weaknesses of existing redevelopment trends and planning policies in Prague. The projects were instigated by private sector members (developers, architects, and professional urban organizations), rather than city officials. Public urban planners can learn from the positive features of these privately initiated redevelopment schemes. 100 5.5.1 Ericsson Palace The first example is the recent renovation of Ericsson Palace, a 12th century building 78 situated in the heart of the historical core's tourist zone . The building has a long history of mixed residential and commercial use. The project architects consciously maintained this mixed use when the building was renovated (Interview 8). Today, Ericsson Palace houses one retail shop on the ground floor, three corporate offices on the second floor, and three residential flats in previously unused attic space. During the restoration of the dilapidated building, attention was given to its historic character and design while modern amenities such as air conditioning and central heating were installed (Interview 15). The project successfully illustrates how an inner city redevelopment project can be of benefit to the conservation of a neighborhood's cultural 79 heritage, the mixed use of the area, and the financial returns of private property owners . Prior to its renovation, the building housed only one ground floor elderly tenant living under very poor conditions. Project developers were forced to compensate for the loss of street level residential space (regardless of its physical state) with residential space elsewhere in the building. Such compulsory compensation is one effective tool presently available to the city for preserving residential space. According to developers, the city can is quite strict in its enforcement of this policy (Interview 6). The relocation of residential space to upper floors enables building owners to maximize the income generated from commercial space in ground or second floor areas. The strategy is beneficial to the private building owner because revenues from commercial functions are maximized. Similarly, the strategy is beneficial to the local neighborhood community because the housing functions within the building are maintained, thus preventing a decrease in the residential function of the neighborhood. To their credit, Prague's urban planners have promoted this strategy in many privately initiated redevelopment projects (Interview 8). However, the decision-makers that grant building 78 Ericsson Palace is situated on Male Namesti street between the Old Town Square and the Charles Bridge along the 'Royal Road' - likely the most busy tourist pedestrian route in Prague. 79 Consideration of the financial returns of property owners is included because it realistically addresses the permanence and prevelence of the pressures and principles of the market economy in the historical core. 101 and construction permits work largely in isolation from strategic planners. Dialogue among the various city departments is weak, as are policy guidelines for compensation strategies (Interview 13). The city has yet to seriously emphasize compensation for residential space as a critical redevelopment strategy. Urban planners also need to implement more detailed compensatory policy guidelines for the use of the employees that issue the renovation building permits. In general, Ericsson Palace does provide an excellent example of sensitive modernization of a heritage site incorporating contemporary mixed functional use. The project demonstrates that mixed residential and commercial use can work well in a building within the historical core. The end result is a building which provides well serviced and efficient commercial, residential, and retail accommodation, while securing the conservation of one of Prague's most valuable historic town houses. (Architectural Design, 1995) Unlike many North American city centres, Prague's historical core predominantly contains low density (four to six story) buildings. The physical layout of these buildings fosters peaceful coexistence between commercial, retail, and residential tenants. For example, buildings will often have an inner courtyard that efficiently separates retail and office functions from upper level residential space, thus preventing conflicting demands from varied use. As is the case for Ericsson Palace, low building density in the city centre also allows for a strong connection to the street life from the higher residential floors. The physical layout of most buildings in the historical core are therefore well suited to maintain mixed residential and commercial use. The sense of place, active streetlife, and mixed use promoted by various planning traditions (New Urbanism, Neo-Traditional planning, etc.) are all epitomized in the original design of the historical core of Prague (Katz, 1994). Jane Jacobs has characterized healthy and successful urban neighborhoods as diverse and dense, containing mostly mid-rise (three to six story) buildings with a mix of uses (Jacobs, 1961). Jacobs argued that such neighborhoods create pedestrian friendly, human scale conditions, promote street activity, and help to maintain lively small scale retail shops serving the local community. This typology accurately describes the 102 existing neighborhood structure within the historical core. Prague's urban planners are well aware of these unique features, but have yet to implement specific strategies to conserve them. The generic rhetoric of the upcoming physical land use oriented Master Plan does not provide specific tools for the conservation of these urban features. Sensitive redevelopment projects like Ericsson Palace can help to maintain these salient city centre features. The increasing commercialization noted in the research therefore does not necessarily have to have negative implications for local residents and the unique ambiance of the urban neighborhood. Revitalization of the city centre has the potential to accommodate a successful combination of residential, commercial, and office space while promoting the permanence of local urban neighborhoods. Ericsson Palace also exemplifies the potential beneficial economic links between retail income and the financing of building maintenance and redevelopment. Currently, retail rents are considered the highest rents in Prague (Interviews 1: 5). Given that retail and commercial rents are fully deregulated in Prague, owners are able to utilize these revenues to renovate and upgrade buildings. The redevelopment of Ericsson Palace realistically acknowledges the permanence of the market economy in the city centre and has used it to the building's financial benefit. There is however, one major criticism with the project. After completion of renovation, the building became gentrified. The original single Czech tenant was replaced with wealthier tenants. The original tenant was relocated from Ericsson Palace to another flat, most likely in a socialist housing estate in the outer city ring of Prague (Interview 14). Given that the residential rents in the building are currently priced at $1500.00 Canadian dollars per month, the average local citizen would be unable to afford to reside in Ericsson Palace (Healey and Baker, 1995). The threat of gentrification in the city centre is currently limited given the difficulties involved in relocating tenants and the huge housing shortage in Prague (see Section 5.2). Tenant relocation can be problematic for a building owner because Czech tenants must be provided with alternative accommodation in the city. This can prove difficult due to the current shortage of 103 flats in Prague. Although gentrification is not currently a major threat, it may become of increasing significance as residential rents are slowly deregulated. In short, if future redevelopment projects can replicate the positive features of the renovation of Ericsson Palace without prompting gentrification, the revitalization of the city will likely promote the unique heritage of the neighborhood, maintain local citizens, provide retail amenities, and sustain the mixed use of the historical core. 5.5.2 Prague Foundation for City Renewal The work of the Prague Foundation for City Renewal, a joint Dutch and Czech non-profit 80 organization, provides a second example of favourable inner city redevelopment . The Foundation concentrates on urban renewal work which consciously prevents gentrification occurring as it did in Ericsson Palace. Their pilot project is relatively unique in Prague because the existing rental tenants are able to remain in their flats while contributing to the financing of building upgrading (Interview 4). Tenants pay building owners normal rents plus rent contribution repayments over a set period of time to finance renovations. In return, residents are guaranteed tenancy without rent increases (inflation excluded) for a specified timeframe. The implications of this type of work for the thesis research conducted are twofold. First, the functional use of an area is maintained as local residents remain not only in their neighborhoods, but also in their original flat. Second, local residents have the opportunity to influence the types of retail shops going into their buildings. This increases the likelihood that appropriate goods and services for local citizens will be established in the neighborhood. The strategy also promotes the mixed use of the historical neighborhoods as well as the conservation of the unique character of the area (both buildings and citizens). There is much to be learned from the work of the Foundation. Presently, there is much skepticism and lack of acceptance in Prague regarding the potential success of self-financed urban renewal projects (Interview 8). This is likely due to lack of exposure to diverse strategies Currenliy, the Foundation is working on resident participation projects in Zizkov, a dilapidated area in dire need of renewal located in the inner city area surrounding the historical core of Prague. 104 for inner city urban renewal (Interview 2). Most of the current planners in Prague were trained during the socialist era when inner city redevelopment programs were largely ignored in favour of new socialist housing developments in the outer rings of Prague. The success of the Foundation's work may contribute to the development of more appropriate public sector policies for the city centre. As city officials are exposed to alternative redevelopment solutions like the Foundation's renewal schemes, the potential increases for redevelopment projects to include residents, conserve the unique character, and promote the mixed use of a neighborhood. In summary, the salient features of redevelopment work and projects such as Ericsson Palace and the Prague Foundation for City Renewal have many positive features of relevance to the historical core of Prague. 5.6 SUMMARY The transformations patterns of the non-residential and residential sectors have indicated some strengths and weaknesses of the urban planning system and redevelopment process in Prague. Given that the current systems have some inherent fundamental weaknesses, the Ericsson Palace redevelopment project and the work of the Prague Foundation for City Renewal were presented in this chapter as alternative planning strategies and programs of potential benefit to the redevelopment of the historical core and its local citizens. Some final recommendations for additional future planning and policy strategies are presented in the concluding chapter. 105 CHAPTER 6. PLANNING ALTERNATIVES AND CONCLUSIONS 6.1 THESIS OVERVIEW Chapters One and Two provided background contextual information regarding the thesis objectives, research methodology, and evolution of the city of Prague and its historical core. Prague was characterized as a well preserved historically rich city with a lengthy tradition of urban planning. The centralized control of politics, economics, and urban planning during the socialist era were evaluated in Chapter Two. It was noted that city residents were provided with basic standards of housing, amenities, and services between 1948 and 1989. Moreover, the socialist era facilitated the conservation of the historical core's built environment and unique cultural heritage. The Velvet Revolution in 1989 ended centralized communist control in Czechoslovakia. Chapter Three summarized the subsequent political, economic, and municipal systems changes of consequence to urban planning in Prague. Systems deregulation in the Czech Republic during the transitional era were observed to have pitted the very character of the capital city's historical core, its currently mixed use function, and the permanence of its inhabitants against commercial pressures and competition from other disparate functions. The rapid internationalization of Prague since 1989 has added many new foreign stakeholders to the urban redevelopment process. Chapter Four documented two case studies of the non-residential sector in the historical core. The research findings pointed to the dominance of the commercial sector over other functions in the historical core. The number and variety of small scale shops and services had increased and diversified since 1989. The types of goods and services available in the area at present were found to be predominantly tourist and luxury commodities appealing to a largely foreign, rather than local audience. Assessment of the two case studies indicated that the amenities and services in the city centre and the current urban redevelopment patterns were neither adequately servicing the local resident population, nor enhancing the unique character of the historical core. The responses of the urban planning system in Prague to date were found to 106 be relatively weak and 'laissez-faire.' The city of Prague has yet to maximize their regulatory powers. Chapter Five presented the analysis of Prague's current urban planning system and redevelopment patterns in the city's historical core based upon the primary research conducted. Generally, it was found that there was room for improvement with regard to the present planning and redevelopment trends in the city. To address these defects, some positive planning and redevelopment projects currently in operation in Prague were cited to highlight the potential for some successful alternative patterns to be adopted. Based on the policy recommendations outlined in Chapter Five, Chapter Six provides some alternative planning strategies and concludes the thesis. The broader relevance of the research findings for planning policies in other similar cities is first discussed. The original research question is revisited to provide a framework for some suggested alternative planning and policy recommendations. In addition, areas for related future planning research are also proposed. Finally, Chapter Six offers some general conclusions on the current planning and redevelopment of the historical core of Prague based upon the primary research conducted. 6.2 BROADER RELEVANCE The relevance of the research findings and recommendations extends beyond the geographic boundaries of the historical core of Prague. Urban redevelopment patterns in Prague's city centre have been considered reflective of patterns in other Czech and Slovak cities (Barlow, 1994). The pace of change has simply been accelerated in the case of Prague given the city's role as national capital and clear link to international external forces. The research findings therefore can provide indicators of future urban redevelopment patterns for other cities that are also experiencing global development pressures, becoming increasingly internationalized, and undergoing similar transitions to a market economy. The experience of Prague during the early years of the transitional era may thus help to provide indicators of what to expect and how to manage redevelopment for urban planners in other Central European cities. 107 As well, inner city renewal in regions beyond Central Europe may also benefit from Prague's redevelopment. The research findings may thus be of significance to cities undergoing similar transitions to a market economy in Asian countries such as China, South Korea, and Viet Nam. Revitalization in Prague under the new system to date has demonstrated that without adequate planning or regulation guidelines, redevelopment pressures can threaten neighborhood communities and cultures. Tn addition, the conservation of the unique historical heritage of Prague's city centre to date has implications for other countries. The socialist era and strict conservation laws in Prague have fostered the conservation of the physical structures within the area. Conservation of the built environment can be one positive step towards the conservation of the social and cultural environment of an urban community. Other cities in similar transitional societies can look to the successful physical conservation of Prague's city centre as an example of a positive start to the conservation of the social and cultural environment within their own unique inner city areas. One example would be the case of Viet Nam's capital city Hanoi. The Vietnamese government has stated its desire to conserve the unique historical neighborhood areas in the old districts of Hanoi (Logan, 1994). The existing physical conservation regulations and need for additional social and resident conservation guidelines highlighted in the thesis research findings may provide some indicators to Hanoi's urban planners as to how the city might work to maintain its own unique historical neighborhoods in the face of Vietnamese redevelopment pressures. In summary, the implications of the research findings may be of relevance to a broad array of urban areas. 6.3 RESEARCH QUESTIONS REVISITED The remainder of Chapter Six concentrates on recommending some conclusions and alternative urban planning policy options to the existing system in Prague. These options are suggested in response to the previously mentioned weaknesses in the existing planning system 108 and urban redevelopment process in Prague. Alternate planning strategies are suggested that seek to address the original thesis research questions: • How can the mixed functional use (both residential and commercial), population, and unique character of the historical core be maintained while realistically acknowledging the existence of a market economy and increasing commercial and tourist activities? • How can the city of Prague reconcile the conflict between economically driven commercial pressures for redevelopment and the local desire for the maintenance of amenities and shops, local culture, and heritage unique to the area? The general imbalance of urban redevelopment patterns in the city centre for neighborhood residents and conservation of local culture and heritage suggest that the current revitalization trends and regulations could be modified. The thesis research process suggested some feasible alternatives for more socially balanced redevelopment and revitalization. 6.4 PLANNING ALTERNATIVES AND RECOMMENDATIONS Assessments of the two case studies, the planning system, and current redevelopment patterns in Prague (see recommendations in Chapter Five) highlighted some existing salient features and potential future redevelopment alternatives with regard to planning and the historical core. The two successful case studies, Ericsson Palace and the work of the Prague Foundation for City Renewal also provided some solutions to the contextual planning issues that have emerged during the transitional era (see Section 5.4.2). Given that various planning alternatives and recommendations were made throughout Chapters Four and Five, only a brief summary of any other pertinent recommendations are presented in this section. The recommendations are based on the general assumption that it is not yet too late to maintain the mixed functional use and unique character of the historical core within the realistic context of the existing redevelopment pressures in Prague. Prague's strategic planners (UHA) could increase the effectiveness and use of existing planning mechanisms to take a more 'hands on' rather than 'laissez-faire' approach to the 109 changing functional use in the city centre. Dialogue with key informants highlighted the UHA's extreme hesitance to use present enforcement mechanisms and interfere with the 'private realm.' Policies that benefit the common good of all Praguers have become relatively secondary to individual private demands since the end of the socialist era. Planners have yet to employ the pro-active role available to them in the redevelopment process. However, it may be the case that urban planning becomes more pro-active as the final kinks of the previous Communist system are eliminated. The UHA could also adjust the existing planning policies and strategic framework to acknowledge the long-term effects of the current trend of ad-hoc planning decisions heavily reliant on the market economy (Interview 12). Such emphasis on short-term economic gains and stability have made it easy to overlook the future implications of the increasing commercialization of the city centre. This is not to say that the new Master Plan does not project the general trends and patterns that may emerge in the historical core in the coming years. The Master Plan does do this, but predominantly through an emphasis on physical land use planning. The plan should also incorporate less physical elements of long-term planning into its framework. Furthermore, the new Master Plan is decidedly too general in scope. There is a definite need for the Plan to be complemented with a more detailed ground level plans for the various districts of Prague so that decisions regarding specific functional land use changes are made using more concrete and strategic guidelines than those that exist today. Another inadequacy that could be remedied is the fact that the Plan's general policy goals are not always complemented with actual tangible strategies to be utilized at a more grass roots level. Until the rhetoric is supplemented with concrete strategies, the new Plan will be of only marginal use for addressing the current redevelopment pressures in Prague. Another policy recommendation is to increase the dialogue between the various levels of municipal administration. Key informant interviews highlighted the existing lack of inter- 110 connected work amongst strategic planners (UHA), practical day-to-day decision makers (issuing building and development permits), and representatives of local district authorities (such as Prague 1). Furthermore, increasing public participation in planning may be of help to remedy some of these issues. If the existing population is being cited as vital to the future vision of the historical core (UHA, 1993), then the objectives and priorities of the local citizens should be given more priority during the development strategic planning stages throughout the various levels of municipal government. It will be an arduous task for planners to solicit community participation in the immediate future given the current disinterest in planning in Prague. Increasing public participation (or at least awareness) in urban planning could improve the planning decisions that are being made regarding the redevelopment of the historical core. The potential for conservation efforts to also positively affect planning is critical. Physical conservation laws have been somewhat useful in the promotion of conserving the city centre and its local residents. Alternative strategies to try and concentrate new developments and secondary business zones on the outskirts of Prague in order to conserve the city centre have also been useful. Nonetheless, the development of conservation guidelines extending beyond the physical conservation of buildings within the historical core should be considered as another alternative policy strategy. There are numerous conservation strategies that could be adopted to promote the conservation of the neighborhood within the framework of commercial redevelopment pressures. For example, the conservation of a pocket residential area within the tourist zone could help to maintain the residential use of the central area. Likewise, the conservation, through legal protection, of specific commercial shops with unique heritage and design which are continuing to service the needs of local residents would also be of significance. Using increased public input into planning and the information from case studies such as those documented in the thesis, urban planners would be able to discern some commercial entities of cultural significance which are still catering largely to local citizens. Conservation guidelines therefore have great potential Ill to promote the maintenance of the amenities, unique character, and local residents in the historical core. The Prague Institute for Monument Protection does offer some financing schemes that compensate project developers for conservation requirements which could also be further accentuated. Specifically, the Institute offers some leniencies or grants for conservation 81 requirements that make projects more economically feasible in the eyes of developers . This process benefits both the conservation of the unique heritage of the area and alleviates some of the additional costs of redevelopment. This strategy of conservation could be further developed by the UHA. As is the case for many of their existing polices, the city of Prague has yet to maximize the potential of the existing conservation strategies and tools available to them. In making final general policy recommendations, it is important to note that many of the existing planning strategies in Prague are positive and do have some salient features, but are in need of further development or emphasis. It may well be the case that as time progresses and the administrative systems structures become more established, the demands on planners time will decrease and allow for further development of the salient features of existing mechanisms and policies. Similarly, the city has yet to incorporate the implications of the impact of the tourism industry on the historical core into its planning. Given that tourism will not likely disappear in the future, it could specifically addressed in planning policies. Part of the charm of Prague's historical core is the unique 'lived in' atmosphere created by the local residents going about their daily lives. If tourism policies highlighted this residential function, then it might be less likely that the residents of the area would be under such grave a threat. Similarly, the city administration could try to redirect some of the financial gains from tourism back into the area in order to promote redevelopment, rather than simply paying for the costs of tourism, as is currently the case. Tourism is becoming a way of life in the historical core and thus should 81 In the same fiscal year that a specific heritage monument building is being repaired, the annual building taxes are waived for the building owner. 112 naturally become part of the planning process. Therefore, services and infrastructure that meets the needs of both tourists and locals should be put in place by the planners of Prague (Pohoryles and Musil, 1993). Finally, the UHA is currently in a special position to develop the needs of locals within the city centre while promote appropriate building renovation and revitalization in the historical core. The city Magistrate currently owns over 500 buildings within Prague 1, chiefly managed by the Prague 1 district authority (Interview 15). Prague 1 has consciously tried to reserve these city owned buildings as rental units rather than selling them to private owners. The income generated from the rented space tends to be greater in the long run than the income generated from a final property sale (Interview 17). Prague 1 generally prefers to use the rented buildings to house local neighborhood tenants, to provide ground floor shops and services that are requested by local area citizens, and to provide public services such as health clinics and seniors centres. Support from other city departments beyond Prague 1 for these efforts could prove of great benefit. In order to address the realistic financial pressures for commercial development of the area, the UHA might also take this strategy one step further and use the rental income from one building in the historical core to finance the renovation of another city owned building. This strategy would prevent the relocation of tenants, would contribute to the conservation of the heritage and local culture of the area, and would also provide the necessary financial returns for renovation. The approach realistically addresses the prevailing market pressures because the city would be able to utilize deregulated high retail rents from foreigners or commercial activities in peak central areas to pay for the maintenance of other more domestic functions elsewhere in the area. The city could then maximize costly rents from a building located in the core tourist areas to upgrade another city owned building in a more residential sector of the historical core. In summary, Prague's current planning system has numerous areas for adjustment and development that could positively contribute to the redevelopment of the city. 113 6.5 FUTURE RESEARCH The findings of the thesis suggest some particular areas for future urban planning research. First, there is a dire need for current research that accurately documents changes in functional use over time in the city's various regions. Presently, the existing resources and information are often outdated, difficult to obtain, and cannot be easily cross-referenced between various city districts and government departments (Interview 21). Due in part to the lingering outdated bureaucratic socialist system, the strategic planning department currently lacks up-to- date information on the changing use of buildings within the city. As a result, planners often have found it difficult to regulate redevelopment and to obtain an accurate assessment the level of commercialization in the area since 1989 (Interview 2). The thesis research findings represent one of a few studies that have been conducted to document changes in the use of buildings over time. Prague's planners have asserted that research determining city-wide existing use of individual buildings would help assessment of changes in functional use during the urban renewal and redevelopment process (Interview 2). The city has recognized the need for additional research to be conducted in order to create appropriate strategic plans that address the shifting function of various areas within Prague. A second area for future research centers around the means of increasing community involvement in urban planning. There has been very little public participation since 1989 in Prague or other cities within the Czech Republic. This phenomenon is due to the fact that Czechs are unaccustomed and somewhat apathetic to taking an active role in planning and tend to believe that market economy principles will restitute most inequities (Interview 18). Key informant interviews indicated that Prague 1 appears to be more connected to its constituents than is the strategic planning department of the city. In general, local city districts interact with their residents more often than do strategic planners and are thus more aware of the priorities of their constituents. However, this does not necessarily mean that neighborhood citizens are any more active in planning beyond discussions with their local representatives over 114 a specific issue of relevance to an individual. In general, the current lack of public interaction with planners has the potential to foster the development of inappropriate guidelines and policy objectives. Planners working within radically different political and economic frameworks need some level of public input in order to direct their new work. The city is now in a position to (and sometimes does) research community participation programs in cities outside the Czech Republic in order to increase the understanding of alternative public participation systems in planning. Third, there is a need to research additional methods of retaining residents in the historical core. For all their rhetoric of maintaining a residential population in the area, Prague's planners have strategized very few specific and tangible methods of accomplishing this goal. Specifically, research and policies regarding the prevention of massive conversion of residential to non-residential (primarily office space) in the historical core has been marginal to date. This is largely due to the limited information available, the lack of public resources, and the fact that residential rents are still regulated in the Czech Republic. Although current tenant protection laws prevent commercial functions from completely forcing out local citizens, the eventual deregulation of housing rents will alter this pattern and create a critical housing threat to residents currently living within the city centre. The analysis of the potential implications of these upcoming changes could be done in advance to final deregulation of the housing sector rather than postponing policy directions. The short-term planning pattern that is presently the norm might prove destructive otherwise. Finally, the thesis findings indicated a need for additional research on the impacts of tourism on urban planning in the city. The case studies clearly indicated that tourism is significantly impacting urban redevelopment in the historical core. At present, planners largely tend not to include tourism as an element of their work because the tourism industry is within the mandate of the Ministry of the Economy, not the office of the City Magistrate. Nonetheless, the correlation between tourism and planning ought to be further investigated given the large impact tourism is having on the lives of local residents in the critical area of Prague 1. Policies which 115 address, or at least acknowledge, the implications of tourism for local communities, culture, and the functional use of the city centre could then be established. 6.6 CONCLUSION The case study findings conclusively indicated that there have been drastic transformations in the historical core of Prague throughout the transitional era. The end of the socialist era brought market economy principles, global forces, and rapid revitalization to the city centre. The research documented some of these changes and provided indicators of their implication for local residents, the unique cultural heritage of the area, and the future mixed use of the city centre. The research recommended some alternative planning strategies that could be adopted given the existing planning system dealings with redevelopment pressures in the city centre. Specifically, the research indicated the need for: • recognition of the integrated relationship between tourism and urban redevelopment and keeping the financial benefits of tourism within the historical core; • increased effectiveness of existing planning mechanisms; • adoption of more pro-active and long-term planning strategies; • adoption of more substantive guidelines regulating redevelopment and changes in land use within the historical core; • increased public participation in urban planning and redevelopment. It remains to be seen what the future holds in store for Prague and its historical core. Much of the current debate amongst professionals and academics centers around whether or not the city centre will actually remain a functioning lived in area in upcoming years. Will the redevelopment pressures and commercialization of the area dominate the local amenities and services and thus the local residents, or will the currently mixed use of the area be maintained to an adequate extent? The historical core of Prague in ten years time may be look relatively similar to today or it may be a completely different urban area. The larger question is whether or 116 not the currently mixed used function of the area will remain. The answers to these questions and other dilemmas are not yet known. Nonetheless, a few predictions can be made. The likelihood of pressures for redevelopment, commercialization, and tourism disappearing in the historical core are slim. The rapid pace of change that has been witnessed in the city centre will probably reach peak in the next few years as market economy principles become fully entrenched in the Czech Republic and redevelopment areas become scarce in the historical core. Consequently, the opportunity for planners to create new policies that take these changes into consideration is currently ripe. Finally, it can be predicted that the number of people living in the historical will decline somewhat in the future, but not to an extent that would seriously threaten the elimination of the residential function of the area. The attractiveness of the location and cultural vibrancy of the historical core will likely continue to draw people to the neighborhood as a place of residence. Hope for the survival of the historical core as a lived in mixed use area servicing the functions of both local residents and the emerging function as a CBD in Prague thus remains. The changing functional use of the city due to the shift away from socialism and globalization of Prague need not necessarily destroy the unique characteristics of the city centre. Urban planners have clearly recognized and prioritized the significance of the historical core for the city as a whole and for the reputation of the Czech Republic. Two immediate tasks remain. First, there is the need to increase public participation in planning. A more active citizen body may help to more formally regulate the redevelopment of the historical core with additional consideration of the needs of its citizens. Second, urban planners need to develop and implement more tangible strategies for managing the structural changes documented in the research. With these tasks set in motion, Prague may adjust to the global economic pressures and redevelopment while continuing to retain a living active urban neighborhood within its prize jewel, the city's historical core. 117 REFERENCES Barlow, Max. 1994. 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LIST OF KEY INFORMANT INTERVIEWS NUMBER DATE OCCUPATION WORKPLACE 1 20/04/95 Professor Urban Sociology, Central European University 2 27/04/95 Urban Planner Strategic Planning, Prague UHA* 3 28/06/95 Urban Planner Prague UHA* 4 29/06/95 Urban Planner Public and Foreign Relations, Prague UHA* 5 30/06/95 Professor Social Geography & Regional Dvlpt. Charles University 6 13/07/95 Developer Private Real Estate Firm 7 19/07/95 Urban Planner Public and Foreign Relations, Prague UHA* 8 19/07/95 Developer Private Real Estate Firm 9 19/07/95 Urban Planner Urban Renewal Foundation 10 20/07/95 Developer Private Real Estate Firm 11 26/07/95 Architect / Planner Private Urban Planning Firm 12 28/07/95 Developer Real Estate Developer, Advisor to Prague UHA* 13 31/07/95 Urban Planner Urban Planner, TERPLAN (State Institute for Regional Planning) 14 02/08/95 Research Associate Sociology Dept., Central European University 15 02/08/95 Architect Private Architecture Firm 16 02/08/95 City Councillor Prague 1 Municipal Council 17 02/08/95 Architect/ Planner Prague 1 District Authority 18 10/08/95 Professor Dept. of Architecture, Czech Technical University 19 10/08/95 Professor Social Geography & Regional Dvlpt. Charles University 20 21/08/95 Architect / Planner Private Architect and Urban Planning Firm 21 21/08/95 Urban Planner Strategic Planning, Prague UHA* 22 22/08/95 Professor Director, Central European University 23 22/08/95 Director, Territorial Regulation Prague Institute of Historical Monument Protection 24 23/08/95 Advocacy Representative Director, Association of Tenants * Prague UHA is the Prague City Development Authority Office (responsible for strategic urban planning) 122 APPENDIX 2. KEY INFORMANT INTERVIEWS QUESTIONS REAL ESTATE DEVELOPERS Redevelopment City of Prague • What are the laws for development within the • Which departments do developers deal with? historical core? • Is the Master Plan a factor in the normal work of • What procedures do developers have to follow for developers? If so, how? projects within historical core? • Does the City currently prioritize changing land use • Are laws regarding land use changes strict for the functions? In the upcoming Master Plan? historical core? Do developers need the city's • What is the City's perspective on developments permission to make land use changes? What is the within the historical core: do they facilitate or decision based upon? obstruct development? • What do developers do with Czech tenants residing in buildings slated for redevelopment? Foreigners Historic Conservation • What role do foreigners play in the redevelopment of • How does historic conservation come into play with the historical core? redevelopment? • What percentage of sales of property are directed at • Are developers free to make changes in buildings or foreigners? does the Preservation Institute control all aspects of redevelopment? Personal Opinion • Are the changes in the historical core since 1989 • What do you think of the changing land use within positive or negative? the historical core? • What has been the role of developers in these • What do you think the future image of the centre of changes? the city is? • Do you think that the area will maintain its residential function? ACADEMICS / ARCHITECTS / PLANNERS Urban Planning Redevelopment • How has urban planning changed since 1989 in • What is your perspective on the redevelopment in the Prague? Are these changes for the better or worse? historical core since 1989? • What is the top priority for urban planning? • What is your opinion on the developments of retail • What is your opinion of existing planning shops in recent years? mechanisms, municipal administrative structure, and • What role do you feel that tourism is playing in the the new Master Plan? redevelopment of the historical core? • What is the level of public participation in urban • Are the urban planning and conservation laws strong planning? enough or not? • What kind of academic research has been done on • How strong of a role does strategic urban planning urban planning in Prague? play in city centre redevelopment? Land Use Changes • What restrictions are placed on changing land use? • Are these changes a threat to the residents within the • What do believe is prompting these changes? historical core? • What is your opinion on land use changes, increasing • What do you believe the future function of the commercialization and conversion of residential historical core will be? space in the historical core? • Is the function of the historical core changing? For • Does the city had adequate mechanisms to respond the better or worse? to these changes, and are they? 123 APPENDIX 2. KEY INFORMANT INTERVIEWS QUESTIONS CITY OFFICIALS Urban Planning Future Function • What is the top priority in urban planning in Prague? • What was the function of the historical core during Are Prague 1 's views the same as the city the socialist era? Magistrate? • Do you feel the image and/or use of historical core is • How did the municipal administrative structure work changing? under socialism and how does it differ today? • What will be the future function of the • What are the goals in the new Master Plan for the • historical core? historical core? • How does the City plan to protect the • historical core and keep it a 'living space'? Redevelopment Local Citizens • What is the city perspective on: • How does city work to protect citizens living in the 1) the changing function of the historical core 2) the area? conversion of residential to office space 3) • Do you think the situation is better or worse for commercialization of small scale retail shops? Prague 1 citizens since 1989? • How are existing municipal laws and regulations • What is the level of community participation in affecting redevelopment? Prague 1? • How does the city try to reconcile conflicts between Is the City trying to maintain the same citizens or redevelopment and historic conservation within the simply the number of residents? city centre? • Are the types and numbers of shops meeting the • What is the role of foreigners in the redevelopment needs of local citizens? How does this differ from process? the socialist era? Land Use Changes • What are regulations to control land use changes in • Is the City worried about the conversion of the local Prague? In the new Master Plan? shops? Is the City interested in what kinds of shops What were land use regulations during the socialist are going in? era? • How does the city regulate shops so that local • Is the City concerned about changing land use? residents can still find what they need within their • Who do you think changing land uses is affecting neighborhood? most? The city in general or local citizens? • What is the City's perspective on the demand for • Is the increasing commercialization of historical core office space in the area? from small shops a concern for the city? • How does the city plan to maintain the housing stock and resident in the historical core? 124 APPENDIX 3. SURVEY TWO COMMERCIAL SECTOR QUESTIONNAIRE SURVEY QUESTIONS • How long has this business been open in this particular location? • Was this business operating here prior to 1989? • If yes, are you selling the same types of goods or products? • Who is your major source of clientele? (You may select more than one group) A. Local neighborhood residents B. Czech citizens in general C. Foreigners (both business and tourist) D. Unsure • If possible, can you estimate what percentage of your business the selected groups represent? SURVEY RESPONSES • There was an 86 % percent response rate from the total 327 premises surveyed. • 70 premises were open prior to 1989. • 171 of the premises were not open prior to 1989. • 29 premises were closed and 9 were under renovation. • 3 premises could not provide a date for when the business opened, but gave other information. • With regard to question of clientele, 79 % responded with percentages and 21 % without percentages. 125 APPENDIX 4. SURVEYS 1 AND 2 - BREAKDOWN OF SHOP TYPES IN THE CASE STUDY AREA Basic Restaurants and Catering Offices Service Workshops All other Retail Food Shops Establishments Shops Meats Bistro Bank Real Estate Textiles/ Clothing Agent Vegetables Cafe Newspaper Company Domestic Gasworks Appliances Milk Pastry/ Cake Shop Computer Goods Business Photocopy Bread Office Service Second Hand Pub Clothing Fish Charity Foundation Hair Dresser/ Drugstore / Wine Bar Beauty Salon Pharmacy Poultry Leather Goods Ice Cream Publishing Bike Repair Books Corner Store House Perfume / Cosmetics Refreshments Exchange Office Ceramics Delicatessen Crystal Pizzeria Jewelry/ Watches/ Accommodation Clocks Snack Bar Agent Military Equipment Costume Rental Flowers Antiques Kiosks and Other Special Facilities Storage and Barber Lighting / Small Premises Empty Spaces Housewares Plumbing Cars Installation Furniture Newspapers Exhibition Hall Empty Printed Matter Car Rental Music Instruments Magazines Under Optician Pet Store Casino Reconstruction Cigarettes Sporting Equipment Gallery Courier Service Fast Food Plastic Shop Disco/ Nightclub Autogarage Furs Video Woodcrafts Arcade Ticket Office Paper Supplies Puppets Hotel Shoe Repair Fishing Tackle CD / Music Laundromat Shoes Hardware / Paints Sound Studio Toys Sewing Machines Travel Agent Seeds / Plants Video Rental Souvenirs Tailor T-shirts Tireservice Cameras 126 APPENDIX 5. SURVEYS 1 AND 2 - FOUR GENERAL CATEGORIES OF USE Basic Goods Common Goods and Services Luxury Goods Tourist Goods and Services and Services and Services Meats Fast Food / Pizzeria Books Real Estate Ticket Office Bistro / Cafe Pub / Wine Bar Agent* Vegetables Cake Shop / Pastry Courier Service Accommodation Ice Cream Cosmetics Car Rental Office Milk Newspaper Company Perfume Bank Housewares Travel Agent* Hotel Bread Business Office Autogarage Charity Foundation Antiques Car Dealership Exchange Office* Fish Gasworks Shoe Repair Publishing House Lighting General Souvenirs Poultry Photocopy Service Laundromat Textile Clothing Ceramics Puppets Corner Store Secondhand Clothing Woodcrafts Hairdresser / Barber Sound Studio Czech Crystal Delicatessen Beauty Salon Plastic Shop Domestic Appliances Printed Matter Newspapers Bike Repair Flowers Computer Goods Musical Magazines Cameras Instruments Costume Rental Tailor Drugstore Sporting Equipment Furniture Plumbing Installation Video Arcade Pharmacy Furs Exhibition Hall Cigarettes Paper Supplies Optician Disco / Nightclub Leather Goods CD / Music Gallery Fishing Tackle Toys Snack Bar Sewing Machines Shoes Tireservice Hardware / Paints Plants and Seeds Pet Store Video Rental* Casino* *These types of goods and services are new to the area since 1989. 127 APPENDIX 6. SURVEY 1 - SHIFTS IN CATEGORIES OVER TIME CHANGES FROM 1989 to 1993 CATEGORIES It C SI o R s Closed iRSc'phJ*?!- Unknown Total shifts in Category Basic Hood Shops (B) IIP" 8 0 0 3 5 6 6 3 3 34 Restaurants and Catering 0 •MM 1 0 2 5 1 1 7 2 19 (R) Special Facilities (SF) 0 0 0 0 0 0 1 0 0 1 Kiosk & Other Small 0 4 0 ::::i2f:! 0 6 7 5 0 4 26 Premises (K) Offices (0) 0 0 0 0 ' 2 2 0 0 1 5 All other Retail Shops (R) 3 12 2 0 3 MM 4 18 3 7 52 Service Workshops (S) 1 4 0 0 1 10 lints 9 0 0 25 TOTAL: 162 /47% CHANGES FROM 1993 - 1995 CATEGORIES li M K () R s Closed Recoil.* Total shifts in Category Basic Foods (B) IM 5 0 0 1 18 3 6 2 35 Restaurants and Catering 2 M;J*; f 0 2 5 27 10 5 1 52 (R) Special Facilities (SF) 1 0 lifflll 0 0 2 0 1 0 4 Kiosk & Other Small 1 3 0 0 1 4 2 1 0 12 Premises (K) Offices (O) 0 0 0 0 6 2 0 2 1 5 All other Retail Shops (R) 0 0 0 0 0 106 1 6 2 8 Service Workshops (S) 0 3 1 0 1 6 30 3 0 14 Closed 1 3 0 0 1 11 1 !I!];f2ft!!! 1 18 Recon.* 0 2 0 1 0 4 2 3 |::|;::p|2|p:i;||: 12 Unknown: 14 TOTAL: 174/48% CHANGES FROM 1989 - 1995 Categories It s: kill fojl R It! II! Closed Recon.* Total shifts in Category Basic Foods 1:2611 12 0 0 2 15 6 6 3 44 Restaurants and Catering 1 3') I 1 1 8 1 5 1 19 Special Facilities 0 0 Hi i 0 0 0 0 1 0 2 Kiosk & Other Small 0 5 I 10 0 12 5 5 0 28 Premises Offices 0 0 0 0 0 2 2 2 0 6 All other Retail Shops 3 11 0 0 6 91 5 10 5 40 Service Workshops 1 5 0 0 1 14 iilE! 8 0 29 Closed 0 0 0 . 0 0 0 0 0 0 0 Recon. * 0 0 0 0 0 0 0 0 llll:-flQ^:llll 0 Unknown 7 TOTAL: *Recon. indicates under reconstruction **The highlighted areas are categories that remain the same 128 APPENDIX 7. SURVEY 2 - CLIENTELE BREAKDOWN CLIENTELE PERCENTAGE BREAKDOWN CATEGORIES 0-9% 10-29% 30-49% 50-69% 70-100% Total Total Percent Local Residents 8% 6% 6% 5% 9% ' 58% 34% Czech Citizens 9% 9% 15% 15% 20% 117 68% Foreigners 14% 13% 16% 14% 32% 154 89% LOCAL RESIDENTS CATEGORIES 0-9% 10-29% 30-49% 50-69% 70-100% Basic Foods 0 3 0 2 3 Restaurants and Catering Establishments 3 13 2 4 Special Facilities 0 0 10 0 Kiosks 0 0 0 0 2 All other Retail 8 6 5 4 6 Service Workshops 2 12 0 0 Total Number of Shops: 13 11 11 8 15 58 Shops indicating percentage 8% 6% 6% 5% 9% 34% Percentage of 58 Shops 22% 19% 19% 14% 26% 100% CZECH CITIZENS CATEGORIES 0-9% 10-29% 30-49% 50-69% 70-100% Basic Foods 0 0 11 3 Restaurants and Catering Establishments 2 4 4 5 3 Special Facilities 0 0 0 2 0 Kiosks 10 10 0 All other Retail 10 8 15 16 22 Service Workshops 2 3 5 2 7 Total: 15 15 26 26 35 117 Shops indicating percentage 9% 9% 15% 15% 20% 68% Percentage of 117 Shops 13% 13% 22% 22% 30% 100% FOREIGNERS CATEGORIES 0-9% 10-29% 30-49% 50-69% 70-100% Basic Foods 2 4 10 0 Restaurants and Catering Establishments 3 4 3 6 9 Special Facilities 0 0 11 0 Kiosks 10 10 1 All other Retail 15 11 19 15 37 Service Workshops 4 3 2 3 8 Total Number of Shops 25 22 27 25 55 154 Total Percent of all Shops 14% 13% 16% 14% 32% 89% Shops with foreign clientele 16% 14% 18% 16% 36% 100% 129 APPENDIX 8. SURVEY 2 - INFORMAL SECTOR FINDINGS INFORMAL SECTOR GOODS AND SERVICES CATEGORIZATION Basic Common Luxury and Tourist Fruits and Vegetables Ice Cream Prague T-Shirts Newspapers & Magazines Popcorn Souvenirs Shoes Sunglasses Postcards Clothing Ceramics Bohemian Crystal Flowers Glassware Cigarettes Jewelry Hair Wraps and Hats City Tours Maps Total Basic: Total Common: Total Luxury and Tourist: 12 vendors (19%) 8 vendors (12 %) 44 vendors (69 %) INFORMAL SECTOR CLIENTELE Categories Number of Vendors Percent Exclusively Foreigners 32 50% Exclusively Czechs 2 3% Mixed Clientele 30 47% Total: 64 100 % Predominately Foreigners 39 61 % Predominately Czech 8 12% Mixed Clientele 17 27 % Total: 64 100% Foreign Clientele 62 97% Czech Clientele 32 50% INFORMAL SECTOR GOODS AND SERVICES BY STREET Street Basic Common Luxury Niimlicr % and of Tourist Vendors Karlova 1 9 % 2 25% 26 60% 29 45 % Na Porici 3 25 % 1 12% 0 0% 4 6 % Dlouha 0 0% 0 0% 0 0% 0 0 % Na Prikope 4 33% 5 63% 17 38% 26 41 % Vodickova 4 33% 0 0% 1 2% 5 8 % Total: 12 19 % 8 12 % 44 69 % 64 100 %