BATTLING THE CONSTRUCTION GODZILLA
A new law designed to fight runaway construction on the Black Sea coast leaves both environmentalists and investors dissatisfied
For Bulgaria's Black Sea coast, 1 January 2008 was more than just the start of a new year; it was the beginning of a new era - at least on paper. On that date, the long-awaited Black Sea Coast Act came into effect. The controversial piece of legislation was intended to set out “public policy related to development and construction” in the Bulgarian Black Sea region. Its main goals are to secure the integrated development and preservation of the coast, to guarantee free public access to beaches and to assure the protection of the natural landscape. The law's opponents see it as a weapon for crushing free competition in the real estate sector. Its supporters hope that it will put an end to the construction frenzy that has turned some coastal regions into gigantic concrete Godzillas. More objective critics fear that its basic goal is to legitimise questionable practices and shady deals made over the last 17 years. One thing is clear, however - the law will have a noticeable effect on the investment climate on Bulgaria's Black Sea coast.
Chapter Three is one of the law's most hotly debated sections. It divides the coastal region into two zones, A and B.
Zone A includes territory located within 100 m, or 328 ft, of the beach. On the strand itself, solid fences are strictly forbidden and only moveable structures are allowed. Beyond the sand, however, construction is legal as long as it doesn't stand higher than 7.5 m, or 25 ft, or exceed 20 percent density.
Zone B includes territory within two km, or 1.2 miles, of Zone A. Here, too, new construction or expansion of existing structures is allowed as long as it obeys certain restrictions: a density of no more than 30 percent, a maximum intensity of 1.5, at least 50 percent landscaping, and a height of no more than 15 m, or 49 ft. You don't need to be a legal expert to realise that the law doesn't offer particularly effective protection for the most endangered Black Sea regions.
Large-scale investors who bought hundreds of acres of cheap agricultural land with the intention of changing their statute and building resort complexes are threatened by the fatal Article 13, Paragraph 2. It allows the expansion of construction only where the necessary technical infrastructure exists. If the basics of civilisation aren't already in place, then they can be built - at the investor's expense. Power supplies, water and sewage systems and roads require huge investments - so this clause effectively puts the kibosh on resort complexes in the middle of nowhere. Despite their infamous inaccessibility and iffy plumbing, more than a few such developments already exist.
Tourists can rejoice over Article 4, which decrees that Bulgaria's beaches are the exclusive property of the government. Better yet, Article 5 guarantees unrestricted and free-of-charge access to them. This should squash the unscrupulous practice of illegally collecting entrance fees to some beaches.
So far the law seems to be an attempt, however imperfect, to solve the ecological problems caused by the Black Sea building boom. Some Bulgarian MPs, however, obviously don't share this environmental enthusiasm, judging from the act's torturous history. The legislation took nearly the whole of Prime Minister Simeon Saxe-Coburg-Gotha's term to prepare and was introduced in early 2006. Parliament finally passed it in the middle of 2007. Immediately thereafter, MPs from the Movement for Rights and Freedoms, or DPS, introduced a motion to delay the act's implementation by six months. Their argument? It wasn't fair to investors who had bought 10,000 sq m of land under previous regulations to now be able to build on only 2,000 sq m of it. The motion passed and land owners rushed to acquire building permits before the new legislation came into force.
What scares preservationists most, however, is not the delay - which is already history - but the act's transitional and final provisions. According to these clauses, construction and development along the coast should follow regional development strategies, specialised construction schemes and town councils' general construction plans. However, the authors of these strategies can take their sweet time complying with the law - they have until 1 January 2010, two whole years after the law comes into force, to do so. What happens until then? Pessimists predict that during this two-year transition period unscrupulous investors will again discover loopholes in the law - with the help of customary kickbacks to bureaucrats and town council members, of course.
The law has yet another Achilles' heel. The transitory and final provisions require the owners of illegally constructed buildings on beaches to get rid of them within one month of the normative act coming into force. So in effect small cafés and souvenir stands will feel the law's heat. However, neither this act nor any other regulatory document provides an effective framework to guarantee the removal of illegal hotels and holiday villages built further way from beaches on protected territory or in violation of other ordinances. Examples of such illegal construction include several notorious hotels belonging to the heirs of assassinated “insurance” moguls.
The clauses concerning illegal structures appear to be little more than a formality. In recent years corruption has made legal construction easier than illegal building. So many hotels that should never have been issued permits in the first place will continue to “adorn” Bulgaria's Black Sea coast for decades to come. Obviously, the restrictive measures have come too late, as the most attractive plots have already been divvied up, bought and built up.
For now the law is nothing more than a framework allowing for the creation of hundreds more legislative acts designed to reign in out-of-control economic activity on the Black Sea coast. What does it mean for foreign investors? Above all, it means that if you purchase land in the special A and B zones, you'll need not only a good estate agent, but also an excellent lawyer. Any counsellor will need to read between the lines and imagine all possible scenarios stipulated by the law to protect clients from investment mistakes during the two-year transition period.
One thing is clear - anyone planning to invest in high-rise construction needs to refocus away from the coastline to regions further inland. Thanks to the new restrictions, demand for land located three to 10 km, or 1.9 to 6.2 miles, from the sea will increase, as will prices. Owners of apartments in buildings erected before the law came into effect can breathe easy - there's no risk of their investments being demolished. The law will gradually restrict construction and put an end to overbuilding. Changing land statutes from agricultural to regulated land suitable for construction will become decidedly more difficult in both zones.
Many environmentalists as well as ordinary citizens hope that the Black Sea Coast Act will not share the fate of much of Bulgaria's legislation that exists only on paper.
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