This chapter explores how Banská Bystrica region (BBSK) can strengthen its land use and spatial planning to better address demographic change, by adapting to population decline in rural areas while leveraging the potential attractiveness of urban centres. It identifies key challenges such as scattered settlement patterns, inefficient land use, ownership fragmentation, and limited housing market responsiveness. The chapter also analyses the existing spatial planning framework and recent reform. The reform incorporates demographic considerations, but successful outcomes will require robust implementation. Policy recommendations focus on promoting more compact and connected development in service centres, expanding access to quality affordable housing and improving land consolidation and reuse in shrinking areas.
Preparing for Demographic Change in the Banská Bystrica Region, Slovak Republic
Abstract
Demographic change necessitates a strategic reassessment of land use and spatial planning in the Banská Bystrica region (BBSK). Population shrinkage, particularly in rural areas, has led to a growing number of vacant properties. In urban areas such as Banská Bystrica, Zvolen, and Banská Štiavnica, rising housing demand and uncoordinated spatial planning have fuelled suburban sprawl and infrastructure costs. Addressing these challenges requires a strategic, adaptive and data-driven approach that promotes compact urban development, land consolidation, revitalisation of vacant spaces, and sustainable land use policies.
Land use patterns in BBSK reflect a long-standing trend of low-density development and high land fragmentation, harming spatial efficiency. Built-up areas are expanding despite population decline, increasing the financial burden on municipalities and making service provision less sustainable. Additionally, complex land ownership structures, marked by small, co-owned plots and unclear legal records, further hinder investment, redevelopment, and infrastructure improvements. Without intervention, these trends could exacerbate socio-economic disparities, most notably between northern and southern parts of the region, strain local finances, and accelerate environmental degradation.
More coherent land use policies are essential to reducing the financial burden of population decline on municipalities and the government more broadly. As populations shrink, the cost of providing good-quality public services and maintaining infrastructure becomes increasingly unsustainable. Strategic land use and spatial planning can expand affordable housing in well-connected areas, enhancing access to economic opportunities. This can help to attract young and economically active populations, address skills shortages and support economic diversification.
This chapter provides an overview of land use trends and the spatial planning framework in BBSK, focusing on how demographic change shapes planning needs. The first section highlights key characteristics of land use in BBSK, including the dispersion of settlements and low-density development. It then examines challenges such as land ownership fragmentation and limited housing market dynamism. The following sections assess the current spatial planning framework, particularly the roles of regional and local governments, and identify gaps in implementation and coordination. The chapter concludes with policy recommendations to improve land use efficiency, strengthen planning capacity, and better align spatial strategies with demographic changes.
BBSK is characterised by a diverse land cover. Forests and agricultural lands dominate the landscape, with broad-leaved, coniferous, and mixed forests extensively covering the mountainous areas, particularly in the Low Tatras and Slovak Ore Mountains. These forested zones are vital for biodiversity conservation and offer potential for sustainable tourism and recreation. Agricultural activities are prevalent in the lowlands and rolling hills, especially in southern districts, where non-irrigated arable lands, permanent crops, and pastures are common.
The population density is low and widely dispersed, reflecting the region’s predominantly rural, mountainous and forested character. The built-up area spans 160.68 km², 1.7% of the region's total land, below the European NUTS2 average of 2.67%. Built-up areas are concentrated in urban centres like Banská Bystrica, Zvolen, and Lučenec, with a network of smaller municipalities dispersed throughout the region (Figure 3.1).
Built-up areas by municipality (2020, sqm)
Note: The map shows the names of municipalities with at least 7000 inhabitants as of 2020.
Source: (Pesaresi and Panagiotis, 2023[1]), “’GHS-BUILT-C R2023A - GHS Settlement Characteristics, derived from Sentinel2 composite (2018) and other GHS R2023A data.”” European Commission Joint Research Centre (JRC), https://doi.org/10.2905/3C60DDF6-0586-4190-854B-F6AA0EDC2A30.
Current settlement patterns need to be viewed in the context of the legacy of centrally planned spatial development from the communist era (1948-1989). During this period, spatial planning functioned as a centrally directed tool for shaping society, promoting urbanisation through standardised apartment blocks and seeking to achieve balanced regional development. This top-down approach resulted in the widespread emergence of uniform housing estates and limited urban diversity across the region (Bitusikova, 2003[2]). Infrastructure and public services provision according to balanced development leads to underdeveloped urban-rural linkages and inefficiencies in regional connectivity.
Land use efficiency is declining in BBSK
Despite recording the steepest population decline in the Slovak Republic, the region’s built-up area expanded steadily between 2010 and 2020. This decoupling of demographic contraction and built-up area growth across most municipalities has reduced overall land use efficiency (Figure 3.2). Land use efficiency deteriorated as built-up area per capita grew by 6.63 % over the decade. Land use efficiency was already low, reflecting the predominantly rural character of BBSK. Built-up area per capita reached 129.7 m² in 2020, above the EU‑ 27 average of 126.7 m².
Built-up areas and population change by municipality (2010-2020)
Note: The dotted red lines indicate the mean value for each variable. Blue dots and labels highlight municipalities with a population of at least 7000 inhabitants.
Source: (Pesaresi and Panagiotis, 2023[1]), “’GHS-BUILT-C R2023A - GHS Settlement Characteristics, derived from Sentinel2 composite (2018) and other GHS R2023A data.”” European Commission Joint Research Centre (JRC), https://doi.org/10.2905/3C60DDF6-0586-4190-854B-F6AA0EDC2A30; OECD.Stat (database) (2021[3]), https://stats.oecd.org/ (accessed on 14 April 2025).
Built-up areas have expanded most markedly in the western and central municipalities of the region, notably within the Functional Urban Area (FUA) of Banská Bystrica and in smaller municipalities such as Zvolen and Banská Štiavnica (Figure 3.3). Growth also extends into adjacent municipalities, underscoring a pattern of suburban expansion. In addition, significant increases in built-up areas are observed in the southern part of the region, particularly in more remote municipalities like Lučenec and Rimavská Sobota.
Built-up area change (2010-2020, sqm)
Note: The map shows the names of municipalities with at least 7000 inhabitants as of 2020.
Source: (Pesaresi and Panagiotis, 2023[1]), “’GHS-BUILT-C R2023A - GHS Settlement Characteristics, derived from Sentinel2 composite (2018) and other GHS R2023A data.”” European Commission Joint Research Centre (JRC), https://doi.org/10.2905/3C60DDF6-0586-4190-854B-F6AA0EDC2A30 (accessed on 14 April 2025).
BBSK faces inefficient low-density development
The BBSK region is undergoing a pattern of low-density development, contributing to accelerated land consumption and spatial inefficiency. This trend is characterised by horizontal expansion of the built environment, without a corresponding increase in vertical construction. As of 2020, the average building height in BBSK was 4.1 metres lower than the average across NUTS3 regions in Europe. While the region's growth rate of 1.9% is negative and remains below the European average, its performance remains relatively favourable compared to other Slovak regions (Figure 3.4).
Building height and change in building height (EU NUTS3, 2010-2020)
Note: The dotted red lines indicate the mean value for each variable. Blue and red dots highlight the Slovak NUTS3 region.
Source: (Pesaresi and Panagiotis, 2023[1]), “’GHS-BUILT-C R2023A - GHS Settlement Characteristics, derived from Sentinel2 composite (2018) and other GHS R2023A data.”” European Commission Joint Research Centre (JRC), https://doi.org/10.2905/3C60DDF6-0586-4190-854B-F6AA0EDC2A30
Property prices have continued to rise despite ongoing depopulation. This trend reflects persistent structural imbalances in a fragmented housing market, where ageing and low-quality dwellings coexist with increasing demand for affordable and higher-quality housing.
Property prices are increasing sharply
Since 2000, robust economic growth in the Slovak Republic has translated into substantial real income gains, fuelling strong demand for high-quality housing and driving up property prices. Consequently, housing affordability has deteriorated. This challenge follows broader housing affordability concerns across the EU, where rapidly rising housing prices have prompted EU-level policy action to address the crisis (Box 3.1). Although BBSK remains one of the more affordable regions in the Slovak Republic, property prices have risen sharply. Between 2018 and 2023, nominal prices in the region increased by 114%, while real prices increased by 20.4% over the same period (Figure 3.5). The affordability pressures push many households toward suburban and peri-urban municipalities as central‑area housing becomes increasingly out of reach (Cesnak et al., 2024[4]).
EU house prices have risen by 52% since 2015 (Eurostat, 2025[5]).This affordability crisis has threatened to relocate vulnerable groups away from opportunity-rich areas, weaken communities and local economies and undermine regional competitiveness. Recognising these challenges, the European Commission has established housing as a key priority area and a fundamental right within a modernised Cohesion policy framework (European Commission, 2025[6]).
EU Cohesion policy and the mid-term review
Cohesion Policy stands as the EU’s principal investment instrument, commanding nearly one-third of the EU budget (EUR 392 billion) for the 2021-2027 programming period. Through its various funding mechanisms, it drives targeted investments to strengthen economic, social and territorial cohesion across Member States. The current programming period has unfolded against a backdrop of unprecedented challenges, including the COVID-19 pandemic and Russia's war of aggression against Ukraine, which have fundamentally reshaped the EU's strategic priorities. The mid-term review aims to propose amendments to Cohesion policy legislations that integrate the EU's emerging priorities into existing Cohesion programmes and accelerate investment delivery through simplification measures.
Affordable housing proposals in the mid-term review
The mid-term review aims to modernise Cohesion policy by addressing the growing housing affordability crisis across Europe, in alignment with the proposed European Affordable Housing Plan and the recommendations of the newly established European Parliament's Special Committee on the Housing Crisis.
It proposes to double Cohesion policy's support for affordable housing through legislative amendments that widen possibilities for Member States to reprogram their 2021-2027 allocations toward housing investments. To provide adequate incentives, investments reallocated to affordable housing will benefit from enhanced pre-financing of 30% in 2026 and an increased EU co-financing rate of 100%.
Additionally, a model financial instrument has been prepared jointly with the European Investment Bank (EIB) for combining Cohesion policy funding with resources from the EIB and other financial institutions. This approach aims to increase the impact of Cohesion policy resources on affordable housing supply by leveraging private and concessional financing.
The mid-term review strongly encourages Member States to 1) double their allocated funding for affordable housing, 2) utilise financial instruments effectively, 3) accelerate and streamline permitting and planning processes at the local level and 4) support housing projects consistent with the New European Bauhaus initiative.
Source: European Commission (2025[6]). Communication from the Commission to the European Parliament and the Council, https://ec.europa.eu/regional_policy/information-sources/publications/communications/2025/a-modernised-cohesion-policy-the-mid-term-review_en.
Residential property prices and change in the Slovak regions (2018-2023)
Note: The graph portrays real prices, calculated by adjusting nominal prices for inflation using the House Price Index (CPI), with nominal year 2015.
Source: National Bank of Slovakia (n.d.[7]), Vývoj cien nehnuteľností na bývanie v SR, https://nbs.sk/statisticke-udaje/vybrane-makroekonomicke-ukazovatele/ceny-nehnutelnosti-na-byvanie/vyvoj-cien-nehnutelnosti-na-byvanie-v-sr/ (accessed on 14 April 2025)., Eurostat (Eurostat, 2025[5]), House price index (2015 = 100) - annual data, https://doi.org/10.2908/PRC_HPI_A.
Housing affordability in BBSK has been significantly impacted by a strong cultural preference for homeownership and historically low mortgage rates. The Slovak Republic has one of the highest homeownership rates in the European Union, with over 90% of households owning their residences (European Commission, 2024[8]). Until 2021, residents in BBSK benefited from low mortgage interest rates, averaging around 1% (OECD, 2024[9]), which made homeownership more financially attractive and further discouraged renting. As mortgage rates have begun to rise in recent years, the lack of a well-developed rental market poses additional challenges for housing affordability in the region.
The quality of houses is low
The quality of the housing stock in the BBSK is undermined by its ageing origins, with a large share of dwellings constructed before the post‑communist transition. According to the Population and Housing Census 2021, 77.7% of dwellings were built before 1980, well above the national average of 67.3%. Consequently, a large share of homes still in use lack modern thermal insulation and up-to-date safety standards. Over 10 % of single-family houses also do not have access to piped water and sewerage systems (Figure 3.6). Moreover, Slovak residential buildings exhibit final energy consumption well above the OECD median, reflecting persistent inefficiencies (OECD, 2024[9]).
Percentage of units without water access and without sewerage system by dwelling category in BBSK (2021)
Note: Includes access to the utilities inside and outside the house. Family house is a residential building with a separate entrance. Unapproved family house is a house not yet having a given register number, not yet approved. Recreational object refers to buildings primarily used for recreation (cottage, hunting lodge). Other housing units are buildings for housing, not excluded from the housing stock, which has its own registration number.
Source: Statistical Office of the Slovak Republic (2021[10]), “Extended results 2021 Population and Housing Census 2021: Dwellings by type of house and piped water in the dwelling”, Population and Housing Census 2021, https://disem.scitanie.sk/SASVisualAnalytics/?reportUri=%2Freports%2Freports%2Fe26f1ce8-29fc-4397-89fd-eb7d9fcfcda1§ionIndex=0&sso_guest=true&sas-welcome=false&language=en (accessed on November 2024); Statistical Office of the Slovak Republic (2021[11]), “Extended results 2021 Population and Housing Census 2021: Dwellings by type of house and type of sewerage system”, Population and Housing Census 2021, https://disem.scitanie.sk/SASVisualAnalytics/?reportUri=%2Freports%2Freports%2Fdd34d876-4c1e-4238-9143-e6a67d171fcf§ionIndex=0&sso_guest=true&sas-welcome=false&language=en (accessed on November 2024).
Few dwellings are used as permanent residences in rural areas
Across BBSK, 28% of dwellings are not used as permanent residences, often remaining abandoned or seasonally occupied (Statistical Office of the Slovak republic, 2021[12]). In the Slovak Republic the share of vacant buildings is relatively high (OECD, 2024[9]). The persistence of vacant or seasonally used homes complicates efforts to revitalise rural areas, as it limits the availability of properties for new residents and discourages investment in local economies (Figure 3.7).
Occupancy rate in BBSK (2021, %)
Note: Occupancy rate refers to percentage of dwellings that are currently occupied on all recorded dwellings.
Source: Statistical Office of the Slovak Republic, (2021[12]) “Extended results 2021 Population and housing census: Dwellings by type of house and occupancy of dwelling”, Population and housing census 2021, https://disem.scitanie.sk/SASVisualAnalytics/?reportUri=%2Freports%2Freports%2Ffffedd87-3b6b-45c3-9b9e-0f322215d485§ionIndex=0&sso_guest=true&sas-welcome=false&language=en (accessed on November 2024).
According to data from the Cadastre Authority of the Slovak Republic, 15% of homeowners own a secondary residence (European Commission, 2024[8]). In 2011, 35.9% of unoccupied dwellings in the region were classified as recreational properties, including secondary residences (Ministry of Transport and Construction of the Slovak Republic, n.d.[13]). Secondary property holdings account for a considerable share of total housing wealth, representing approximately 9% of the total (net) property wealth (Wind, Dewilde and Doling, 2019[14]). These trends highlight the dual function of housing as both a place of residence and an investment asset.
Ensuring efficient use of existing land and buildings with a smaller population will require facilitating an efficient property market. The Slovak Republic is suffering from a high land ownership fragmentation, sometimes with unknown, deceased, or untraceable owners. The 1947 inheritance law, which mandated the equal distribution of assets among heirs, strongly influenced the restitution of private property rights in 1989. This legal framework contributed to land ownership fragmentation, as properties were divided among multiple family members over generations. In BBSK, the average landowner holds 21.5 plots, while each plot has an average of 9.1 co-owners (Urban, 2019[15]). These highly fragmented ownership structures often result in plots of negligible size, sometimes as small as 400 m² or even less than 1 m² (Hudecová et al., 2017[16]). Although property registration has been underway since 1990 and is nearly complete across the Slovak Republic through the Registry of Renewed Land Records (ROEP), the land registry remains highly complex, recording a large number of fractional ownership relations (Figure 3.8).
Picture of the Budča land cadastre
Note: C-register parcel, 1411. Green lines show the parcel of agricultural lands.
Source: Geodesy, Cartography and Cadastre Authority of the Slovak Republic (n.d.[17]), Cadaster map of Budča commune, https://zbgis.skgeodesy.sk/mapka/sk/kataster?pos=48.578999,19.068310,13 (accessed on November 2024).
Land ownership fragmentation hampers the real estate market's efficiency and drives suburban sprawl
The challenges of land ownership fragmentation significantly impact the real estate market and urban development. Structural barriers, such as complex ownership issues, impede residential development, limit housing availability and hinder the ability of cities and municipalities to respond effectively to demographic change and economic growth. In the Slovak Republic, property inheritance remains the dominant means of acquiring housing. Inheritance-based system ensures widespread homeownership and constrains property turnover. Many properties have multiple co-owners, some of whom are unknown, deceased, or untraceable, making property transactions and redevelopment efforts highly complex.
In the Slovak Republic, the situation of vacant and abandoned dwellings and lands in rural areas is exacerbated by land ownership fragmentation, which creates administrative and legal barriers for repurposing vacant properties (Cole, Gubalová and Svidroňová, 2021[18]). The complexities of shared ownership and land transactions have contributed to the underuse, poor maintenance, and, in some cases, abandonment of properties (Wang et al., 2022[19]). For properties with dozens of heirs or co-owners, unanimous agreement is required for any sale or redevelopment project, significantly delaying or preventing investment. Legal disputes related to inheritance or missing land records further hinder transactions, limiting the potential for rehabilitation. In addition to buildings, agricultural land is also threatened with abandonment because of land ownership fragmentation and rural outmigration. The phenomenon is particularly strong in the south of the region, potentially leading to the loss of semi-natural habitats and biodiversity (Schuh et al., 2020[20]).
Land ownership fragmentation further hinders investment, regional development, and public interest projects. Investment, lease agreements, and other land-related transactions are often complex, time-consuming, and costly, creating barriers to private sector involvement. Developers encounter significant challenges in acquiring contiguous plots for large-scale housing projects, leading to delays, higher costs, and affordability concerns. The inefficient real estate market contributes to urban sprawl, fostering low-density, fragmented development that strains infrastructure and planning efforts. Fragmented ownership structures also complicate the construction of essential public facilities, such as schools, hospitals, highways, and large-scale infrastructure networks (Lazíková and Lazíková, 2018[21]). Furthermore, unclear ownership records hinder tax collection and enforcement. Infrastructure investment and development will be examined in more detail in Chapter 4.
Land consolidation efforts have been slow
Land fragmentation poses significant challenges to the real estate market, regional development, and the agricultural sector (Muchová, Leitmanová and Petrovič, 2016[22]). Land readjustment and strategic land management instruments, such as land banking, are key for addressing land fragmentation, particularly in rural areas (OECD, 2023[23]).
In the Slovak Republic, land readjustment is primarily employed for urban expansion and renewal, with public entities overseeing projects (OECD, 2023[23]). Annually, approximately 3 000 hectares are designated for public infrastructure projects. Original plots are restructured into new parcels, eliminating co-ownership relations, except for small plots under 400m² or cases where owners voluntarily form joint ownership (OECD, 2023[23]). When landowners resist participation, compulsory measures may be applied. Following readjustment, landowners receive proportionally distributed plots or financial compensation. Land readjustment is primarily regulated by the Land Consolidation Act (Act No. 330/1991 Coll.), which aims to reorganise fragmented parcels to improve agricultural efficiency, resolve ownership issues, and manage state-owned land. Over the years, amendments to the legislation have refined leasing rules and promoted environmentally sustainable land use. Complex land consolidation projects follow a formal, multi-stage process (Lazíková and Lazíková, 2018[21]). For smaller-scale interventions, a simplified “simple consolidation” procedure allows municipalities or private investors to reorganise non-agricultural parcels, especially in peri-urban zones, for minor residential or infrastructure development. This version of consolidation does not require full ecological assessments. Before, urban land readjustment was governed under the Building Act (Act No. 50/1976 Coll.), which permitted municipalities to pool and reconfigure adjoining plots as part of a detailed local plan. The new Construction Act (Act No. 201/ 2022[24]) that replaces the Building Act (Act No. 50/1976 Coll.) as of 1 April 2025, enables land plot reorganisation indirectly through construction procedures. It sets out geodetic requirements for adjusting parcel boundaries, establishes coordinated planning through the “construction intention” procedure, and introduces provisions for land access and expropriation in the public interest.
While consolidation effectively resolves many land-related issues, challenges remain (Muchová and Raškovič, 2020[24]). Since the introduction of land readjustment, progress appears to be slow and inefficient. As of 2020, only 418 out of 3 559 cadastral area land readjustment projects had been completed, with 18 ongoing (Muchová and Raškovič, 2020[24]). In response, the government introduced a proposal in 2019 aimed at accelerating land readjustment through organisational, legislative, and financial measures, intending to complete the process within 30 years. While cadastral areas for land adjustments have been designated for 2024 and 2025, the Ministry of Finance recently postponed fund disbursement until 2029, raising concerns that completion across all territories may be delayed until 2049. Securing funding to accelerate the Ministry of Agriculture and Rural Development's initiatives is crucial for advancing land consolidation efforts.
Strategic land management, including land banking, is employed in the Slovak Republic to support urban renewal, redevelopment, and land consolidation. However, these practices currently lack a formal legal foundation at the national level. Land banking refers to the proactive role of public authorities in acquiring, developing, and subsequently selling or leasing land to guide urban growth and capture value created through public investment. When implemented effectively, land banking enables the strategic management of underutilised or abandoned land for future development or resale. It facilitates the revitalisation of vacant properties, supports commercial and industrial investment, and contributes to the creation of public amenities such as green spaces. Land banking can promote more coordinated, efficient, and sustainable urban expansion by ensuring key infrastructure development.
In practice, however, these activities are carried out informally within broader spatial planning frameworks and are not systematically employed as instruments for land value capture. The absence of publicly managed land banks near urban centres creates a significant barrier to efficient development. In their place, private developers must assemble fragmented parcels at high cost and bear the responsibility for infrastructure provision, which inflates housing prices and undermines the feasibility of large-scale projects. A more formalised approach to land banking, supported by an appropriate legal and institutional framework, could enhance urban land use efficiency and improve housing affordability (De Pace, 2024[25]).
Expropriation procedures are complex and time-consuming
Expropriation is a key tool for addressing land fragmentation and vacant housing, but in the Slovak Republic, its effectiveness is limited by several persistent challenges. The process is often time-consuming due to complex administrative requirements, legal ambiguities, and procedural delays, significantly impacting infrastructure development timelines (Box 3.2). The lack of a precise legal definition for public interest creates ambiguity in its interpretation. While infrastructure projects such as roads or utilities are generally accepted as serving the public good, broader objectives, such as housing development, are more difficult to justify under existing legal standards, leading to legal disputes and prolonged proceedings. Property owners frequently challenge compensation amounts, arguing that they do not reflect the true market value of the expropriated property, which results in extended negotiations and legal battles. Additionally, the expropriation process has been criticised for its susceptibility to undue influence, with concerns that certain stakeholders may manipulate proceedings for personal or corporate gain (Peráček, Srebalová and Srebala, 2022[26]). Addressing these challenges through transparent, predictable, and efficient processes is essential.
Expropriation in the Slovak Republic is strictly regulated to balance property rights protection with the need for public interest projects. It is permitted only under specific conditions: the process must serve a legally defined public purpose, be conducted transparently, and include fair compensation for property owners. Expropriation can proceed if limited to the minimum extent required to achieve its objective, and accompanied by fair compensation, which may include monetary reimbursement or replacement land or buildings. Additionally, expropriation is only allowed if the public interest cannot be fulfilled through voluntary agreement or alternative means.
Expropriation is governed by the act on Expropriation (Act No. 282/2015), which specifies the types of projects that qualify for expropriation. These include public utility structures, sanitary and safety protection zones, access to land and buildings, highways, roads, local communications, railways, public airports, and energy infrastructure such as power grids, waterworks, fuel and oil pipelines, and significant investment projects. Since the law does not explicitly define public interest, it must be demonstrated during the expropriation proceedings by the competent authority.
The expropriation procedure is administered by the district office in the region where the affected property is located. The authority overseeing the process is the Ministry of Transport of the Slovak Republic. If a replacement property is available and the owner agrees to it, this method of compensation is prioritised over monetary payment. Compensation is based on the general value of the property, as determined by an expert's appraisal not older than two years. The compensation amount cannot be lower than the appraised value.
Source: Peráček, T., M. Srebalová and A. Srebala (2022[26]), “The Valuation of Land in Land Consolidation and Relevant Administrative Procedures in the Conditions of the Slovak Republic”, Administrative Sciences, Vol. 12/4, p. 174, https://doi.org/10.3390/admsci12040174.
Adapting land use to demographic change depends on having an effective spatial and land use planning system. The first legal framework for spatial planning in the country is the Building Act (Act No. 50/1976 Coll.), adopted in 1976, which remained strongly influenced by centralist economic planning (Finka and Jamecny, 2022[27]). Following the “Velvet Revolution” of 1989 and the independence of the Slovak Republic in 1993, the government approved the Territorial Development Perspective in 1997. Despite numerous amendments, the Building Act has retained its original framework, with an outdated legislative structure, legal terminology, and public administration procedures. During that time, all the duties and activities in spatial planning were carried out by the Ministry of Transport of the Slovak Republic.
In 2024, the central government introduced a significant spatial planning reform, called "Change 2032." The Spatial Planning Act (Act No. 200/2022 Coll.) and the Construction Act (Act No. 201/2022 Coll.) replace the Building Act. The Spatial Planning Act establishes stakeholder responsibilities and redefines spatial planning processes. The primary aim of the reform was to accelerate and simplify, realign responsibilities, and introduce digitalisation. To oversee the process of spatial planning, the Authority for Spatial Planning and Construction was established as the central state administration authority for spatial planning (excluding ecological aspects), construction, and expropriation. On the regional level, Regional Offices for Spatial Planning and Construction in each region were established,
The spatial planning in the Slovak Republic is implemented hierarchically, and structured across five levels: national, regional, microregional level, local, and zonal (Box 3.3). Spatial planning documentation across all levels is interconnected and follows common guidelines, with higher-level documentation binding for the lower-level spatial planning documentation. The Authority of Spatial Planning and Construction is responsible for monitoring the trends and developments in spatial planning in the country, including the preparation of conceptual spatial planning documents and binding regulations. In coordination with ministries and other central state administration bodies, the Authority of Spatial Planning and Construction ensures that spatial planning is reflected in relevant strategic documents, conceptions, and programs across sectors, affecting the territory.
National level
At the national level, the Slovak Spatial Development Perspective (KURS) is the long-term, overarching policy document. It integrates economic, social, environmental, and cultural priorities while promoting natural and cultural heritage protection. First adopted in 2001 and last updated in 2011, KURS contains binding elements enacted through government regulations and non-binding components that serve as flexible guidance for subnational plans. The Authority of Spatial Planning and Construction is developing a new version of KURS, which also monitors its relevance and implementation.
Regional level
At the regional level, the Concept of Territorial Development of the Region (KURR) translates and expands upon the national spatial development framework, adapting its strategic priorities to the specific territorial context. The self-governing region commissions the KURR, and the Spatial Planning Authority conducts its review. While non-binding, the KURR sets out long-term objectives and strategic guidelines for spatial development across the region. The Land Use Plan of a Large Territorial Unit (UPN VÚC) is the binding regional land use plan. It operationalises the strategic vision laid out in the KURR through detailed zoning regulations and legally enforceable planning provisions. In BBSK, the current UPN VÚC was adopted in 1998 and has undergone several revisions, with the most recent amendment entering into force in 2024. This dual-framework approach allows the region to align long-term development goals with enforceable land use decisions.
Local level
The Local Land Use Plan (UPO) is not mandatory for all municipalities. However, under recent reforms, all municipalities or, where applicable, microregions, will be required to adopt a local land use plan by 2032. This shift encourages inter-municipal cooperation and promotes spatial continuity and coordinated development across municipal boundaries. Local land use plans can be further detailed through the Zonal Plan (UPZ), which specifies land use, building parameters, environmental protections, and service provision. Zonal plans must be aligned with the binding elements of regional and local land use plans and are subject to revision if higher-tier plans are updated. In parallel, SUDAs can serve as strategic frameworks for guiding urban investment. In parallel, SUDAs can serve as strategic frameworks for guiding urban investment.
Source: Hrdina, A. (2012[28]), Slovak Spatial Development Perspective, Ministry of Transport, Construction and Regional Development.
The spatial planning framework is adapting to incorporate demographic changes
The evolving demographic landscape, characterised by population decline and shifting settlement patterns, necessitates a robust spatial planning framework that responds to these demographic changes. Recent reforms in spatial planning in the Slovak Republic integrate demographic trends into strategic urban and regional development policies by systematically incorporating population projections, migration patterns, and economic activity shifts into land allocation and zoning regulations. The Regulation of the Spatial Planning Authority establishes requirements for spatial planning at all levels, including demographic situation assessment (Spatial Planning Authority, 2024[29]).
At the national level, efforts are focused on integrating population projections into planning processes
The official assignment document for the new KURS includes the requirement of assessing the impact of demographic tendencies on the territorial development of the state in the upcoming document (Spatial planning Authority of the Slovak republic, n.d.[30]). Specifically, flexible zoning regulations should support mixed-use developments in areas with declining populations, fostering economic revitalisation, while infrastructure adaptation ensures public services and transportation networks are structured around projected demand (Spatial Planning Authority, 2024[29]). The integration of Geographic Information Systems (GIS) plays a crucial role in supporting evidence-based planning, enabling real-time monitoring of population shifts, identifying optimal locations for redevelopment, and enhancing coordination between municipalities (Spatial Planning Authority, 2024[31]). The new statutory spatial planning principles emphasise densification and rehabilitation of vacant properties, while rural development strategies focus on consolidating essential services and incentivising economic diversification. Green infrastructure is also integrated into land use plans to mitigate the environmental impact of depopulation by converting underused land into conservation areas and ecological corridors.
At the regional level, priorities include balanced territorial development and the revitalisation of the housing stock
In BBSK, the legally binding section of the UPN VÚC, last updated in 2020 but entering into force in 2024, establishes a strategic framework for housing development that balances urban expansion with sustainability and demographic realities. The updated plan emphasizes settlement structure optimisation, housing revitalisation, and infrastructure alignment, ensuring a resilient and efficient approach to land use.
A key strategic priority for regional development is promoting balanced settlement patterns by favouring urban consolidation over unregulated suburban sprawl. The regional development strategy supports the strengthening of established or service centres ("population clusters"), particularly the urban pairs of Žilina–Martin and Banská Bystrica-Zvolen, while also fostering the growth of secondary and tertiary centres, especially in the southern parts of the region, such as Lučenec and Rimavská Sobota. Rather than relying solely on demographic definitions, the strategy operationalises service centres through a functional approach, categorising municipalities based on their roles in service provision and transport connectivity. This approach enables the formation of a coherent settlement hierarchy, supported by a network of transport and service nodes. The aim is to expand equitable access to essential services and employment opportunities while easing development pressures on primary urban hubs and promoting more spatially balanced growth across the region.
To optimise land use and reduce unnecessary expansion, the revitalisation of the existing housing stock is prioritised, with vacant or underused buildings being repurposed for residential use. The plan integrates sustainability principles, ensuring housing development aligns with available infrastructure capacity, particularly transportation, utilities, and social services. In response to demographic shifts, such as population decline and an ageing population, the housing strategy within spatial planning aims to diversify residential options. Measures are in place to retain residents in shrinking municipalities by expanding access to affordable and social housing, alongside initiatives to repurpose existing structures to meet contemporary living standards.
The lack of local land use planning has hampered the adaptation to demographic change
The absence of local land use plans in some municipalities has led to uncoordinated development, resulting in settlement sprawl, inefficient land use and environmental degradation (OECD, 2017[32]; IEG - World Bank Group, 2019[33]). Before the new reform, 320 out of 516 municipalities opted not to develop a local land use plan due to capacity constraints, a lack of perceived necessity, or competing priorities, such as the development of essential infrastructure (Figure 3.9). The absence of land use plans is especially pronounced in the southern part of the region, where the Roma community resides. The absence of a land use plan obstructs effective coordination between municipalities. Implementing comprehensive land use plans for each municipality or micro-region is key to fostering sustainable urban development, optimising resource allocation, mitigating adverse environmental impacts, and reducing vulnerability to future climate hazards.
Status of current land use planning documentation in towns and municipalities of BBSK (2024)
Source: Banska Bystrica self-governing region (n.d.[34]), Status of planning documentation in cities and communes, https://bbsk1.maps.arcgis.com/apps/View/index.html?appid=963d392d8e1642db8b4bb2ca0a7d48d2 (accessed on November 2024).
Moreover, there is a lack of enforcement of the spatial plan at the local level, allowing developers to wield significant influence. This often leads to the construction of buildings far from public facilities without proper permissions, only to be retroactively legitimised. In 2021, unapproved family houses represented 0.39% (Statistical office of the Slovak republic, 2022[35]) of all types of housing. This forces local authorities to take on the responsibility of developing public facilities independently, placing additional strain on public resources.
Local governments face significant challenges in maintaining consistent and up-to-date land use plans due to capacity constraints. The recent reform mandates the implementation of local land use plans to address the absence of a comprehensive spatial planning framework at the local level. However, as elaborated in Chapter 4, the capacity of municipalities to effectively undertake this task remains a key concern. The preparation of local land use plans necessitates strengthening the expertise of architects and urban planners, who must obtain specific certifications to perform their roles. The number of authorised urban planners and architects is insufficient to meet the needs of all municipalities. To address this gap, the Authority of Spatial Planning and Construction has introduced training and an examination system set to take effect in 2025. Furthermore, accurate geographical, demographic, and economic data must support a well-functioning land use plan. With ongoing reforms, digitisation of spatial planning processes is becoming a necessity. Incorporating population projections into land use plans is particularly crucial, as it enables municipalities to develop spatial strategies aligned with future demographic trends. This data-driven approach ensures that land use decisions remain relevant and adaptable to changing conditions. To facilitate implementation, municipalities receive targeted support through training programs for urban planners and architects, improved access to spatial data via centralised repositories, and participatory planning processes that engage local stakeholders in adapting policies to demographic realities. While data on the number of applicants is not yet available, ensuring that this initiative bridges the gap for municipalities required to develop and maintain land use plans is crucial.
Municipalities can explore multiple funding mechanisms to secure the necessary resources for effective land use planning. National and European Union funding programs provide financial support for spatial planning initiatives (Box 3.4). Collaborating with private investors and developers through public-private partnerships can offer both financial contributions and technical expertise. In exchange, investors may receive development opportunities in infrastructure and urban projects. Municipalities can generate revenue through development fees and property taxes, which help fund spatial planning and infrastructure projects. Additionally, municipalities can collaborate within micro-regions to share the costs of developing and maintaining land use plans. This approach can enhance efficiency and reduce financial burdens on individual municipalities.
Several programs are available to support municipalities in developing their land use plans by providing financial assistance, training, and access to relevant data resources.
“Support for the Spatial Development of Municipalities and Towns’’ programme
As developing new spatial plans can be economically challenging for some smaller municipalities, the Authority of Spatial Planning and Construction will redistribute 1.2 million euros to successful applicants. Municipalities, towns, and higher territorial units may cover up to 80% of the related costs with this financial support. Subsidies will be provided to cover three types of land use plans: the municipal land use plan, micro-region land use plan and zonal plan.
The Authority of Spatial Planning and Construction, in cooperation with the Association of Towns and Municipalities of the Slovak Republic, provided a series of free training sessions for local government representatives on spatial planning, covering the provisions of the new Spatial Planning Act. The trainings were free of charge and covered up to 500 municipality representatives.
Building capacities to improve geospatial data collection and sharing - BBSK
The project promotes closer collaboration between local governments in developing and sharing geospatial data. A platform was created to organise regular meetings, where professionals working with data and spatial planning can connect and exchange experiences and best practices. The project has the potential to ultimately create a nationwide community of local governments across all regions that will optimise data collection and management through regular participatory meetings and sharing of expertise.
Source: Banská Bystrica Self-Governing region (n.d.[36]), Participatory planning in BBSK, https://www.bbsk.sk/participativne-planovanie (accessed on November 2024).
Developers are facing lengthy and fragmented building permit processes
In the Slovak Republic, until 1 April 2025, the Building Act (Act No. 50/1976 Coll.) regulated building permit process. The process involved multiple stages, including obtaining zoning decisions, building permits, and final occupancy approvals (Figure 3.10). Applicants had to submit detailed project documentation to the local building authority, which assesses compliance with spatial plans, technical standards, and environmental regulations. In BBSK, this process was administered by municipal building offices, which operate under the supervision of the regional authority. While the legal framework was consistent nationwide, the implementation could vary based on local administrative capacities and regional development strategies.
Source: Author's elaboration based (Marišová, Hodossy and Mura, 2023[37])
In the context of demographic shifts, the previous building permit regime in the Slovak Republic presents significant barriers to responsive and sustainable spatial development. Lengthy, complex and fragmented permitting procedures have deterred needed investment in areas facing depopulation or in need of revitalisation. On average, the building permit approval process in the Slovak Republic took 300 days in 2019, nearly twice the OECD average of 152 days, placing it among the slowest in the OECD. These delays were further compounded by a highly decentralised system, with more than 2900 municipalities individually responsible for issuing permits and interpreting technical standards. This results in procedural duplication, inconsistent application of regulations, and administrative bottlenecks that disproportionately affect smaller developers and projects in less urbanised areas (OECD, 2024[9]).
The new Slovak Construction Act introduces a simplified, two-step building permit process to increase efficiency and legal clarity. First, developers must obtain a construction intention approval (stavebný zámer), which ensures that the planned project aligns with spatial plans and regulatory requirements. Once approved, they must submit a verified building project (overenie projektu stavby), which contains the technical documentation needed for implementation. In most cases, the responsible authority must decide within 30 days. For some specific areas, municipalities will no longer hold permitting authority, which is transferred to specialised regional construction offices. The purpose of these changes is to increase expertise. Minor constructions may qualify for simplified notification procedures. This new system replaces the previous zoning and permitting steps with a more streamlined and predictable process.
In urban centres, zoning regulations impose additional constraints. Developments must comply with detailed local land use plans, which may severely limit density. For example, some zones only allow single-family homes or low-rise buildings with a maximum of three storeys. These rigid frameworks limit the adaptive reuse of vacant buildings and hinder the construction of affordable or age-appropriate housing, particularly problematic in regions grappling with demographic decline and an ageing population.
Aligning spatial planning with climate resilience and brownfield sites regeneration in BBSK
BBSK is vulnerable to several extreme weather events, including river floods and extreme precipitation, which have severe economic and social consequences (World Bank Climate Change Knowledge Portal, n.d.[38]). The Banská Bystrica district is the most affected by heavy rainfall in the Slovak Republic, averaging 9.9 days of intense precipitation per year and some developing areas within the region are increasingly at risk of flooding (Figure 3.11) (OECD, 2023[39]). The city of Banská Bystrica has implemented an Action Plan for Mitigation and Adaptation to Climate Change (APMA), which includes climatological assessments, vulnerability analysis, and climate impact modelling. This strategy aims to embed climate considerations into urban planning and decision-making. To enhance climate resilience, all spatial and land use plans must account for these exposures by integrating climate risk assessments, prioritising adaptation measures, and ensuring that future development occurs in low-risk areas.
Share of population exposed to 100-year river flooding in BBSK (2020)
Note: Population exposure to river flooding is assessed using a 100-year return period, which corresponds to the average duration between two flooding events of the same intensity.
Source: OECD (n.d.[40]), “Share of population exposed to 100-year river flooding”, OECD Database on Regions, Cities and Local Areas, https://localdataportal.oecd.org/maps.html?indicator=RIVER_FLOOD_RP100_POP_SH&topic=climate (accessed on December 2024).[40]
BBSK hosts several environmentally degraded sites requiring rehabilitation to mitigate legacy contamination risks. Several of these sites, particularly in the cities of Banská Bystrica and Zvolen, present strategic opportunities for urban regeneration, including their potential conversion into affordable housing (Figure 3.12). In rural areas, similar sites could be repurposed for recreational uses or developed as renewable energy hubs, contributing to regional revitalisation goals. Implementing targeted rehabilitation policies would enhance land use efficiency, limit unnecessary urban sprawl, and support broader objectives related to environmental sustainability and inclusive economic development.
Brownfield location in BBSK, 2025
Source: Ministry of Environment of Slovakia (2025[41]), Environmental Burdens, https://envirozataze.enviroportal.sk/Mapa/index.htm?lng=sk (accessed on April 2025).
Fostering more attractive, well-serviced and inclusive urban environments can contribute to retaining and attracting younger populations. The following recommendations aim to modernise land use planning practices, promote densification, alleviate spatial mismatches in the housing market and promote consolidation of land ownership.
Promote compact development by integrating population projections
In BBSK, local land use plans are optional for municipalities, and currently, 62% have not adopted one. Even where land use plans are in place, municipalities often struggle to update and enforce them. However, under the spatial planning reform from 2022, Change 2032, municipalities will be obliged to have a local land use plan by 2032. Effective local land use planning that integrates population projections is key for promoting compact development around regional and local service centres and identifying areas suitable for redevelopment or demolition.
For this, some of the measures that could be taken are the following:
Support the municipalities in the development of land use plans to respond effectively to demographic changes. Localities would benefit from national and regional government support to access the resources needed to develop effective land use plans that incorporate population projections by providing financial support, training, data access, or fostering inter-municipal cooperation. Land use plan should also consider climate hazards when adjusting to demographic changes. Currently, the Spatial Planning Authority will provide financial support solely to selected municipalities or micro-regions. This support could be channelled through EU funding instruments, such as Integrated Territorial Investments (ITI). Financial assistance could be structured to encourage the development of joint land use plans at the micro-regional level to enhance efficiency and collaboration, particularly for smaller and shrinking municipalities (Box 3.5). Promoting shared land use plan approaches through targeted communication on cost-saving benefits could further incentivise cooperation. To foster intermunicipal planning that supports coherent territorial development and reduces urban planning costs through shared resources and coordinated action, joint land-use plans can be developed in alignment with SUDA documentation. The development and processing of geospatial data would support more compact land use planning but requires significant investment and a skilled workforce. Regional governments should expand the “Building Capacity” programs to improve geospatial data collection, management, and sharing. Training programs could enhance municipal staff capabilities in using Geographic Information Systems (GIS). Central and regional governments should ensure that the number of architects trained through the Spatial Planning Authority aligns with the demand for local and micro-regional land use planning.
The “Smaller Towns and Municipalities” programme in the German state of Hesse has played a key role in fostering inter-municipal cooperation for land use planning. Launched in 2010, the programme enables small and mid-sized municipalities to pool resources, jointly develop integrated development strategies, and coordinate planning for settlement structures, infrastructure, and services. This is particularly relevant in structurally weak or low-density regions, where individual municipalities may lack the capacity to address demographic challenges in isolation.
Participating municipalities work together in formalised partnerships, often structured around functional or geographic clusters. These partnerships are supported by both financial incentives and technical assistance from state authorities, including guidance on cooperative planning processes and tools for joint decision-making. Importantly, the programme encourages municipalities to jointly define shared development goals, such as stabilising town centres, managing land consumption, or adapting infrastructure to population decline. This approach has improved the coherence and efficiency of spatial planning across the participating municipalities.
Source: Kleinere Städte, B. and P. GbR (2018[42]), Interkommunale Kooperation in der Städtebauförderung.
Ensure that local land use plans are enforced to maximise the impact of spatial planning land use to adapt to demographic changes. Effective enforcement requires a clear legal and regulatory framework, with well-defined zoning laws and land use regulations that ensure compliance. Strengthening local and regional planning institutions to oversee enforcement will enhance effectiveness. Improving monitoring mechanisms is essential. GIS, remote sensing technologies, and regular on-site inspections can help municipalities track land use changes, detect unauthorised developments, and enforce planning regulations more effectively. Public reporting mechanisms can further enhance transparency and accountability in spatial governance. Municipalities would benefit from support from national and regional governments to ensure effective implementation of plans through GIS data analysis, regular inspections and public reporting requirements. BBSK could leverage EU funds such as the ITI to support municipalities. To reinforce compliance, developers who violate planning requirements should be subject to appropriate penalties. Introducing legal sanctions for non-compliance with local land use plans would strengthen enforcement and ensure that spatial planning objectives are upheld. The Authority for Spatial Planning and Construction could introduce sanctions for non-compliance with local land use plans. In addition, central governments could assist municipalities in monitoring the implementation of local land use plans and apply sanctions where necessary.
Promote higher-density and flexible development in local service centres. These centres, often serving as hubs for public services, retail, and transport connections in surrounding rural areas, are well positioned to accommodate a greater share of future development in a sustainable way. Higher-density development in these areas can improve the cost-efficiency of public service provision, reduce land consumption, and strengthen the vitality of local economies. Compact development will make the region more resilient and attractive in the transformations to reach climate neutrality, especially by helping to achieve energy savings. Regional plans should provide clear guidelines and incentives for municipalities to achieve this. This may include the use of “density bonuses”, allowing developers to build at higher intensity in return for public benefits such as affordable housing or green space, and the adoption of more flexible zoning regulations that permit mixed-use development, diverse housing types, and adaptive reuse of existing structures.
Expand high-quality affordable housing provision, especially in core urban centres
Ensuring the availability of high-quality, affordable housing is essential to enhancing the attractiveness and competitiveness of BBSK, particularly in the context of demographic decline and youth outmigration. Strengthening the housing offer in local and regional services centres can help retain and attract younger populations, support labour market mobility and fill skills gaps, and promote more inclusive urban development.
Some key policy avenues are as follows:
Encourage rehabilitation projects for affordable housing in service centres to promote compact development. Urban regeneration presents a valuable opportunity for urban centres such as the commuting zone between Banská Bystrica and Zvolen, as well as for smaller municipalities, to provide housing where it is needed the most, well connected to jobs and access to services. Repurposing vacant buildings offers a cost-effective solution to expand affordable housing without contributing to urban sprawl. Municipalities identified as local or regional centres could include priority regeneration zones in the land use plan. The regional government could facilitate municipal access to Cohesion Funds (e.g. ERDF) for renovation projects. European Funds (e.g., JTF and Cohesion funds) could be used to finance urban regeneration, including public spaces that could support the provision of attractive affordable housing close to urban centres.
Help municipalities to fund social and affordable housing to overcome capacity issues and increase attractiveness. Permission to develop land for housing in areas with strong housing demand in well-connected areas typically generates land value uplifts. Local governments can harness these uplifts by requiring developers to provide affordable housing, which is offered below market price to eligible low and medium-income households (Box 3.6). Developer obligations in the Slovak Republic are legally mandated, requiring developers to contribute financially or in kind to offset the infrastructural demands of new developments (OECD/Lincoln Institute of Land Policy, PKU-Lincoln Institute Center, 2022[43]) but not affordable housing. While major cities such as Bratislava and Košice enforce development fees at the upper limit, smaller municipalities often refrain from imposing such fees to avoid discouraging investment. Municipalities in urban areas, such Zvolen and Banská Bystrica, could expand the use of developer obligations for affordable housing. Effective communication should emphasise that developer fees deter investment only when they exceed the project's potential returns. When appropriately set, fees impact only projects that are not financially viable. Unclear development norms, inadequate administrative capacity, the prolonged absence of strategic planning, and an insufficient legal framework continue to hinder the full realisation of land-based finance instruments in the Slovak Republic (OECD/Lincoln Institute of Land Policy, PKU-Lincoln Institute Center, 2022[43]). Addressing these issues is essential to unlocking their benefits and ensuring effective contribution to housing affordability development. The regional government could also help the municipalities identified as service centres to benefit from national programmes, such as subsidies from the Ministry of Transport or favourable long-term loans from the State Housing Development Fund, as well as Cohesion Policy funds (e.g. ERDF) to support the provision of social housing. Building on the European Commission’s mid-term review and the renewed prioritisation of affordable housing at the EU level, BBSK could also help the municipalities identified as service centres to benefit from the Cohesion Policy funds (e.g. ERDF) and the new EIB financial instrument to support them with the construction and renovation of high-quality social housing in high-demand places. The region could facilitate access to funding for areas in need through the pan-European Investment Platform for Affordable and Sustainable Housing. This financial support can be prioritised for housing targeted at young people, particularly near emerging sectors such as tourism and the wood industry. To support housing provision for marginalised populations such as the Roma, localities eligible for the Just Transition Fund, such as Rimavská Sobota and Revúca, can leverage this funding to improve the quality of affordable and social housing, particularly through investments in energy efficiency.
In Germany, developer obligations are formalised through urban development contracts (städtebauliche Verträge), governed by Section 11 of the Federal Building Code (Baugesetzbuch, BauGB). Municipalities widely use these contracts to ensure that private development projects contribute to public infrastructure, services, and community needs. When a developer seeks approval for a project that requires changes to land use plans or additional planning permissions, municipalities can negotiate a legally binding agreement. Through this contract, the developer may be required to provide affordable housing within the project or to finance or construct public infrastructure (e.g. roads, schools, utilities). These obligations must be directly related to the development and proportionate to its scale and impact, ensuring transparency and legal compliance.
Source: OECD/Lincoln Institute of Land Policy, PKU-Lincoln Institute Center (2022[43]), Global Compendium of Land Value Capture Policies, OECD Regional Development Studies, OECD Publishing, Paris, https://doi.org/10.1787/4f9559ee-en.
Expand the rental market to enhance the availability of affordable housing. The region could invest through the Building Capacity Programme in improving rental market data collection and dissemination to increase transparency, support policymaking, and build trust among tenants and landlords.
Enhance and accelerate land consolidation
In the context of demographic change, reducing fragmented land ownership is essential for addressing vacant and deteriorating housing. Land ownership often involves multiple co-owners, creating complex legal and administrative challenges that hinder land management, investment, and infrastructure development. By streamlining land consolidation and introducing greater zoning flexibility, municipalities can better reuse vacant land and buildings to meet local needs. The following measures outline targeted actions to strengthen land consolidation efforts and support the redevelopment of vacant properties.
Streamline land readjustment processes to reduce land ownership fragmentation and redeploy abandoned buildings and land. In areas with high demand, the Authority for Spatial Planning and Construction could facilitate the redevelopment of abandoned buildings and land by streamlining the expropriation process. This could involve clearly defining the concept of public interest and establishing a transparent compensation framework, thereby enabling faster approval and implementation of strategic projects such as key public infrastructure or social housing.
Encourage land banking to consolidate land and redevelop or demolish abandoned buildings. In the case of land consolidation, the Ministry of Agriculture could establish a legal framework that allows municipalities to acquire land they are planning to develop at pre-development prices, thereby reducing land costs, and regulates coordination among relevant authorities to enhance overall efficiency. Land banking should be reinforced by fostering inter-municipal cooperation and enhancing local government capacities to fund both land acquisition and consolidation. The region can use land banking to support infrastructure development identified in SUDA plans, leveraging ITI or JTF funding to assist municipalities in implementing these projects.
Promote greater zoning flexibility to support the reuse of vacant or underused buildings based on local needs. Municipalities with abandoned buildings or brownfields would benefit from greater zoning flexibility, allowing vacant or underused housing stock to be repurposed for commercial, tourism, or community uses, depending on local needs and development potential. Greater flexibility could prove beneficial for areas experiencing population decline and for compact local service centres.
Introduce fiscal incentives to encourage more efficient use of underutilised properties. The Ministry of Finance could allow municipalities, particularly those experiencing high housing demand, to increase the property tax rate on secondary residences and introduce a tax on vacant properties (Box 3.7). The additional tax revenues generated could be strategically reinvested into affordable housing projects, urban regeneration initiatives, and public infrastructure improvements, fostering more sustainable and inclusive urban development.
The City of Vancouver created the Empty Homes Tax (EHT) to address housing affordability and availability challenges by increasing the rental housing supply. The policy requires property owners to submit an annual property status declaration to determine whether their property is subject to the tax. The tax applies to homes that are left vacant for more than six months in a year, unless they serve as a principal residence, are rented for at least six months in 30-day increments, or meet specific exemption criteria. This measure has had a significant impact on improving housing availability and promoting a shift toward long-term rentals. It also encourages better use of existing housing stock and discourages speculative ownership. The revenues generated by the tax have been reinvested in affordable housing programmes, further supporting local housing policy objectives. The EHT is now viewed as a policy tool with strong potential for replication in cities facing similar challenges around housing scarcity and vacancy.
Since its introduction, Vancouver’s EHT has had a measurable impact on the city’s housing market. Between 2017 and 2023, the number of vacant properties fell by 58%, reflecting improved housing utilisation. The EHT also generated CAD 169.8 million in revenue, which was directed toward affordable housing initiatives, helping to expand access for residents. Notably, in just one year following the tax's introduction (2018-2019), approximately 5 920 condominium units were added to the long-term rental market, contributing to increased housing availability in the city.
Source: City of Vancouver (n.d.[44]), Why an Empty Homes Tax? https://vancouver.ca/home-property-development/why-an-empty-homes-tax.aspx (accessed on 18 March 2025).
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