Dr Chrysi Potsiou Surveying Engineer ASSISTANT PROFESSOR NTUA Email:[email protected] Study on Illegally Built Objects and Illegal Development in Montenegro by Dr Chrysi Potsiou January 31, 2012 Illegally Built Objects and Illegal Development Chrysi Potsiou 2 Illegally Built Objects and Illegal Development Chrysi Potsiou TABLE OF CONTENTS EXECUTIVE SUMMARY ………………………………………………….. 4 1. INTRODUCTION …………………………………………………………… 21 2. OBJECTIVES OF THE STUDY ……………………………………………. 23 3. ILLEGAL DEVELOPMENT IN MONTENEGRO ………………………… 24 3.1 Country Background and State-of-the-art of Illegal Development …….. 24 3.1.1 General Information …………………………………………….. 24 3.1.2 Illegal Urban Development – History, Causes, Statistics, Types 30 3.2 Brief historic Review of Land Administration, Real Property Taxation and Planning Regulatory framework …...……………………………… 46 3.2.1 Security of tenure and Property registration ……………………. 46 3.2.2 Real property taxation …………………………………………... 52 3.2.3 Real Estate Market and illegal buildings ……………………….. 53 3.2.4 Spatial Planning and construction permitting …………………... 55 3.3 Impact of Illegal Development on the Society, the Environment and the Economy ……………………………………………………………….. 62 3.3.1 Social and Environmental impact ………………………………. 62 3.3.2 Economic impact ……………………………………………….. 67 4 CURRENT TRENDS AND TOOLS FOR ADDRESSING ILLEGAL DEVELOPMENT ……………………………………………………………. 69 4.1 The case of Albania ……………………………………………………. 75 4.2 The case of Greece ………………………………………………........... 78 4.3 The case of the FY Republic of Macedonia ……………………………. 84 4.4 The case of Cyprus ………………………………………………........... 90 4.5 Seismic vulnerability controls ………………………………….............. 94 4.6 Experience from urban integration in areas with Roma settlements …... 101 4.6.1 European Policies ……………………………………………….. 102 4.6.2 Experience from Roma in Greece ………………………………. 104 5 LEGALIZATION OPTIONS CONSIDERED BY THE RELEVANT AUTHORITIES OF MONTENEGRO – COMMENTS AND PROPOSALS 107 REFERENCES ……………………………………………………………… 119 APPENDIX A ……………………………………………………………….. 123 APPENDIX B ……………………………………………………………….. 128 3 Illegally Built Objects and Illegal Development Chrysi Potsiou EXECUTIVE SUMMARY The current Study on Illegally Built Objects and Illegal Development in Montenegro is compiled for the Statens Kartwerk. The objectives of the study are to: 1. Provide an in-depth analysis of the situation (origin, causes, impacts, size of the problem, type) of informal development in Montenegro. 2. Investigate the policy framework and the strategies (housing policies, access to land and ownership) and tools (property registration and planning systems, legislation for legalization / upgrading) used for the legal integration and the environmental upgrading of informal urban development, and practices (citizen participation, penalties, fees, demolition, monitoring of environmentally sensitive areas) to improve transparency and prevent future informal development, eliminate the impacts and improve the livelihood of urban poor and low income people living in informal houses. 3. Give recommendations for improvements and solutions, in order to facilitate growth through the operation of efficient, transparent, and formal land market and safeguard the environment. This activity should develop public and transparent policy and directions on improvement of the legislation and the current situation in relation to the process of identification and the process of legalization/treatment of the illegal buildings in Montenegro, and should provide other countries with useful knowledge and better understanding of the complex informal development issues. In brief, the research has identified the following: Montenegro is a country of special natural beauty that is recognized by its Constitution as an “ecological” country. Natural and cultural beauty of Montenegro attracts tourism and international real estate market interest. In the territory of Montenegro, destructive earthquakes were often related to large movements of rocks (land-slides, erosion of rocks), floods, avalanches, regional fires and other natural hazards. The various ethnic groups of Montenegro are: Montenegrins (Crnogorci) 43%, Serbs (Srbi) 32%, Bosniaks (Bošnjaci) 8%, Albanians (Albanci - Shqiptarët) 5%, and other 12% which include Muslims (Muslimani), Croats (Hrvati), and Roma; according to UN reports, Roma are the most marginalized ethnic minority in Montenegro. Improving the plight of Roma is one of the toughest challenges faced by the country. During 1993, two thirds of the Montenegrin population lived below the poverty line. Currently, the economy of Montenegro is service-based and is in late transition to a market economy. Tourism is an important contributor to Montenegrin economy and government expenditures on infrastructure improvements are largely targeted towards that goal. Montenegro has experienced a real estate boom in 2006 and 2007, with wealthy Russians, Britons and others buying property on Montenegrin coast. Montenegro received, as of 2008, more foreign investment per capita than any other nation in Europe. However, there are significant differences in the extent of poverty in the region between the northern and other parts of the country. 4 Illegally Built Objects and Illegal Development Chrysi Potsiou The “first generation” of informal development in the area is dated since the era of socialism. In the former Yugoslavia land was under state control. Despite the ambitious social housing projects there has always been a lack of state funds for housing purposes. This need was increased due to the natural disasters that happened in the region. Since mid-90’s huge changes have had an impact on the urban development of Montenegro. After the independence a combination of major reasons, such as poverty, internal and external migration as an impact of wars and sanctions on the state economy, no clear property rights, no credit system, and the out-dated centrally driven and bureaucratic planning (with no public participation), created a boost of illegal settlements in Montenegro. Displaced people and refugees have moved in. The “self-made” housing solution, built on state land, acted as the only alternative to inadequate state social and/or affordable housing. According to the UN ECE report of 2006, single-family houses are predominant in Montenegro; apartment buildings are generally considered to be problematic in terms of management and maintenance; over 6000 households, many of which are Roma, live in substandard dwellings (slums). Most of the new housing is illegally constructed. Informal settlements in Montenegro are a dominant feature of urban development; more than 80% of the houses and apartments in Montenegro fall under the term “illegal”, either constructed completely without a building permit on state land and/or beyond the specifications of the permit. Illegal objects are located in all types of land (private or state land); they vary in terms of standard (from slums to luxurious residences), location (from suburbs to city cores and protected areas), use (from residential, mixed, or commercial) and size (from several small units to over 70 ha settlements; from small guesthouses to large hotels). There are no reliable estimates available about the total number of illegally built objects in the country. According to unofficial data the number of informal structures is 130,000 (source: UNDP) and they are mainly concentrated in small and medium settlements all over the territory. The identified causes of illegally built objects in Montenegro vary but in general they are a result of one of the following conditions: 1. internal and external migration as an impact of wars and sanctions on the state economy, poverty and inadequacy of the social housing; lack of access to affordable land and housing; 2. emergency response to housing needs due to natural disasters (earthquake); 3. inability and unwillingness to pay communal taxes; 4. complicated procedure for refugees and the various minorities to obtain citizenship and land use/ownership rights on land; 5. inefficient administration; 6. unclear situation for privatization of land to the citizens and delay in the restitution of property rights; 7. incomplete cadastral maps, no available information about the registered private property rights; 8. lack of affordable housing policy; 9. out-dated centrally driven and bureaucratic planning (with no public participation and no respect of existing private property rights); lack of detailed city plans; lack of serviced urban land; state controlled and extremely bureaucratic planning that aims to “control” development through numerous 5 Illegally Built Objects and Illegal Development Chrysi Potsiou field inspections instead of purely facilitating growth; lack of funds; lack of personnel; expensive and cumbersome procedures for building permits; 10. weak professional ethics; 11. misuse of power; speculation and corruption; 12. ignorance of existing regulations; 13. local and international market pressure. Land Administration The fiscal Inventory Cadastre, established in the 1950’s, provided records of self- declared information -about parcel area- by the “current possessors”, not accompanied by any documentation or map and not checked by the authorities for correctness. Since 1958, the state nationalized all urban lands; the state took ownership rights from the owners and offered them rights to use the houses. The Land Cadastre, in 1976, provided improved information about parcels and their owners and users/social owners related