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lf UDC 333.66:711 061.3(497.12-2) Radenci "1994":528 
STRUME TS 
DITIONS OF 
EDECON 
LISM FP 
ARKET-
AND IN 
OPE TIES 
ProfDr. Albin Rakar 
FAGG-Institut za komunalno gospodarstvo, Ljubljana 
Receivedforpublication: September 14, 1994 
Abstract 
The article presents the CUITent state in the field of land 
policy and physical planning in Slovenia and enumerates 
needs and possibilities for so.me not directive instruments. Of 
the latter, the article deals with more detail only 
building-grounds stock forming and land redistribution. 
Keywords: building-grounds land redistribution, 
building-grounds stock-piling, Geodetic workshop, land 
policy, physical planning, Radenci, 1994 
1.0 INTRODUCTION 
Housing policy is land policy e.g. development of cities and carrying out land policy in practice. In Germany the first premises have been evident since the 
beginning, but the second one in the mid 1950' of this century (Guettler 1983). To all 
appearance in the consciousness of our politicians these premises are still far from 
beeing noticed. Even authors of the law in question and authors of the so called "aim 
development programs" for the field of space and housing are far from beeing 
familiar with them. Declaratively we do have market economy and are very close to 
the developed part of Europe but in fact our interventions into space are still in a 
brigade's manners. A considerable part of planners is certain that a nicely elaborated 
and bound project report is good enough for these purposes. What other explanation 
is there for the fact that in four years since Slovenia's independence the system 
legislation for the field of physical planning has not been adopted yet and that for the 
present it is not even entered the regular parliament procedure. Bearing this in mind 
the Constitutional Court has unilatcrally reached into the existing law on 
building-grounds and by making some of its articles null and void it enabled the 
turnover of parcels to be set free without insuring public interest at the same tirne. In 
this way the "right locations have begun to pass into the right hands" and through 
political lobbies the new owners started to enforce changes of the existing city plans 
which is in fact the beginning of the end of a planned settlernents planning. 
he liberalization of the turnover of parcels and uncontrolled transition from 
social to private ownership has been enabled also by the law on housing. In this 
way the state has in fact created conditions for a criminal like privatization of 
Geodetski vestnik 38 (1994) 4 
building-grounds especially those of the highest quality (Bežan 1994) instead of 
forming and adopting a consistent system of laws and by-laws for the field of physical 
planning and land policy (Rakar 1983). The so caused conditions in the field of land 
policy and physical planning the state rnight restore only by mcans of directives and 
repressive instruments. In the following nondirective instruments of land policy vvhich 
European countries with a high degree of civilization and its achievemcnts, carry out 
in this field. 
2.0 NONDIRECTIVE INSTRUMENTS OF LAND POLICY 
he construction of citics and their physical planning has to be guicled because it 
is unreal to expect the public interesi in this fielcl to be ensurecl by itselL In the 
introductory chapter the meaning ancl the role of adequate instruments of the land 
policy at its spatial broadening of cities and the resu!ting consequences of its lack, 
were indicated. As a matter of fact instrumcnts of land policy must promptly solve 
some oppositions of objective nature among the owner of the capital (investor), the 
owner of a parcel, and the state e.g. lo:::al community. Inside the given triangle there 
are of course numberless connections whereas the typical ones for the field of land 
policy are above all the following: 
o The owner of the capital (investor) is not the owner of the parcel he wants to 
build on. 
o The shape and position of the parcel, the investor has at his disposal are not 
suitable for the intended constrnction" 
o The construction of an object is in opposition to public interests e.g. it does 
not comply with the statcly defined ecological and social functions the 
property on a parcel is to ensure. 
Since capital has its own price and the enumerated disproportions have their timely 
dimension, therefore the demand of the owners of capital is orientated towarcls a 
prompt solving in an objective way. The so far said is trne also for or rather 
especially so, when the owner of the capital is the state or a local community and 
construction of objects is in thc puhlic interest. 
In the egalitarian socialistic society the enumeratecl disproportions had quite a different range and meaning since private property was in a subordinate position 
especially in the field of parcels and all the capital was in fact "social property"" In 
the conditions of pluralism of properties each intervention into space will primarily 
be an intervention into private ownership and with it into the economic intcrest of 
the owner. Since democracy ancl constraint are not good partners, the so far directive 
and authoritative mechanisms in the field of land policy are to be replaced by 
cooperative ones. To make instruments of this kind successfu!, they have to be first 
provided for (Guettler 1992): 
o The lcgitimate carriers of the instruments of land policy. These may be a 
local community, owners of land complexes, or a specialized firm. 
o Uninterrupted succession of activities needed in the sense of: purchasing an 
individual parcel, shaping the cornplex, planning the land complcx for 
construction needs, sale e.g. letting out individual construction parcels. 
Geodetski vestnik 38 (1994) 4 
• Financial funds for the execution of an individual instrument have to be 
provided for. They may be regular or irregular budget funds or funds of 
investors. Lately, a combining of both fund sources has proved to be very 
successful in the sense "Private - Public - Partnership" (Bartholomaei 1994). 
For a planned construction and spatial development of cities carriers of the land policy have the following nondirective instruments at their disposal (Guettler 
1992): 
• purchase of parcels for stock-piling 
• purchase of parcels for current needs ( as a rule with intention of la ter sale) 
• executing the right of pre-emption 
• executing the right reserved e.g. stipulated right to purchase land for specific 
purposes e.g. certain social groups 
• regrouping of parc_els 
• purchase and equipment of building-grounds through private legal companies 
• purchase and equipment of building-grounds through mixed companies on 
the basis of special contracts. 
As to the limited space of this article, each of the given instruments can not be 
presented in to the detail. Two issues were chosen to be discussed further, first 
forming stock-piling and than regrouping of parcels. 
2.1 The building-grounds stock-piling as an instrument of guiding spatial development 
In normal conditions a consumer will form his stock of consumer goods in at least two cases, namely: in case he is sure that certain goods, when needed, will not (no 
longer) be on the market, and in case he is sure certain goods will in tirne gain more 
value on the market. If there is a perfect competition on the market for certain goods 
and in addition the political situation is stabile then these goods are not needed on 
stock e.g. the more the actual state of affairs on the market for certain goods is 
moving away from circumstances of perfect competition the more justly ( of course, in 
the economic sense) seems to form stock-piling for the particular goods. 
or the conditions on the market the following two things may be stated with 
pretty rnuch certainty: 
• a certain (building) ground will most probably not be available when needed, 
and 
• in comparison with the present, admittedly monopolistic price, 
building-grounds will most certainly grow more expensive. 
Forming parcel stock-piling is with this fact more than justified, naturally the extent 
of the stock itself has to be defined on the basis of economic principles. In our 
concrete example this means that (even) in forming building-grounds stock, we have 
to strive to ensure: first a timely and with minimal cost the needed extent of 
building-grounds for construction of dwellings and other objects in public interest 
and next available funds for the highest possible extent of parcels to be used for 
construction of dwellings and other objects in public interest. The result of all this is 
that forming a stock of building-grounds is one of the possible instruments of land 
policy in the sense of covering needs and not in the sensc of maximizing the profit. In 
Geodetski vestnik 38 ( 1994) 4 
case we wanted to maximize the profit by forming building-grounds stock we would 
buy especially those parcels which ought to bring us the greatest profit in re--sale. To 
be more explicit: above all, parccls would be bought, which should (by speculating, 
naturally) obtain the highest difference between the purchase and thc (re )selling 
pnce. 
hen referring to given e.g. available funds we have to bear in mind that these 
funds have their timely dimension as well as prices of building-grounds and a 
readiness of a buyer to seli a certain parcel. Since all the important elements 
regarding the building-grounds stock forming decision-making are not exactly known. 
This kind of decision-making may be considered as decisions with uncertainty. 
Namely in deciding on building-grounds stock we can not predict accurately enough 
the following items: 
o changes of rates of interest 
o building-grounds increase of prices 
o vendors' response to changes of building-grounds prices. 
For the stated elements, there are alsd no reliable data about how they have been 
changing in the past so our decision-making may be based only upon experiences 
from the past and from our judgement of building-grounds conditions on the market 
in general. Judging from the experiences from the past and considering the present 
state of building-grounds conditions on the market, the following starting-points and 
guidance for forming the needed building-grounds stock may be suggested. 
The needed building-grounds stock is the extent of building-grounds. A local comrnunity will need to construct objects and devices inevitably for the execution 
of public affairs of local meaning. On these grounds a local communii.y has to be 
registered as the owner prior to the beginning of an individual plan period in which a 
construction of stated objects and devices is planned. Such an extent of parccls form 
the minimum of the stock needed. As to concrete conditions on the market of 
building-grounds and taking into consideration the index of increase of prices a local 
community, may form a stock that is greater than minimally needed. In this case the 
tirne component for which it is still reasonable to form parcels stock, is defined 
among other things, for example by the relation between the index of 
building-grounds increase of prices and the current rate of interesL 
According to the Municipal Economics Institut <lata, the increase of prices on building-grounds on sale (in the sense of executing the right of pre-emption) for 
the period 1988-1992 grew twice as fast as the real interest of rate for fixed deposits 
in this tirne. Supposing the index of increase of prices for fixed dcposits is even 
higher in future than the rate of interest for fixed deposits in a bank. A hypothesis 
may be made that it is needed to be payed to a local community to make a stock of 
at least those parcels on which according to the agreed PIN a construction of objects 
in public interest is planned. Naturally, the precondition is that FIN was prepared 
and adopted on the basis of actually well foundcd needs. On the assumption, the 
index increase of prices of building-grounds is getting higher than the real rate of 
interest for deposits in a bank, a local community may profit by buying free 
agricultural parcels. These are parccls which (for the time being) are not yet planned 
to be built up. At a later date these parcels may be either exchanged for 
Geodetski vestnik 38 ( 1994) 4 
building-grounds or simply changed into building-grounds. Such meaning and role of 
building-grounds stock is understood in Germany (Guettler 1983). 
2.2 Regrouping of building-grounds 
The regrouping of building-grounds is in Germany considered as one of the instruments of physical planning and providing parcels needed for construction 
(Bundesbaugesctz, A.rticles 45-79). Opinions about its successfulness and above all its 
effectiveness are various. Some authors consider building-grounds regrouping a 
having great meaning and cite as reference examples the cities Bonn (Sandmann 
1983), Nuernberg (Hildebrandt 1983), and Frankfurt (Joekel 1994). In 
building-grounds regrouping we reshape and rearrange built-up and not built-up 
building-grounds in such a way that individual parcels correspond to construction and 
city planning demands as to their position, shape, and size. Regrouping as an 
instrument of physical planning is above all suitable for a transformation of the 
existing agricultural parcels into building ones or even for a reconstrudion and 
revitalization of already built-up complexes of buildings (In Germany in this sense a 
reference cxample is the post-war reconstruction of the old city kernel in Bonn. The 
regrouping area comprised altogether 852 parcels measuring 40,7 ha. The procedure 
officially began on Sept. 8, 1946, its conclusion beeing as late as 1969. For more 
details: Sandmann, cited source ). 
o carry out regrouping especially by larger complexes an adopted and valid 
development plan is needed whereas the elaboration of a development plan may 
be carried out parallel to a regrouping plan preparation. The building-grounds 
regrouping procedure is roughly divided into three phases (Joekel 1994): 
o Parcels from the whole regrouping area form (in an accounting sense) the 
regrouping mass. 
o From the regrouping mass the needed extent of parccls for public e.g. joint 
purposes (traffic, green and recreational grounds) is excepted. 
o The remainder of the parcels (redistributing mass) may be formed into new 
building parcels and divided by one to the redistributing keys among previous 
owners. The basis for the redistribution may be the value of surface or the 
turnover value of previous parcels. 
The ones in favor of building-grounds regrouping sta te especially its following advantagcs (Joekel 1994): 
o Regrouping of building-grounds is an instrument of a development plan 
realization with the minimal possible intervention into private property and 
at the same tirne at a high level of readiness for cooperation of all involved 
parties. 
o As a rule, the execution of the regrouping of parcels serves alike to satisfy 
interests of both an individual and a community. 
• Regrouping means adjusting and balancing interests whereas in the ideal and 
the greatest possible way advantages and shortcomings comprised in town 
planning are adjusted. 
• The regrouping procedure is executed in a legal way and according to law it 
is compulsory to take into consideration the turnover value of parcels as one 
Geodetski vestnik 38 (1994) 4 
of the starting-points for a redistribution. In this way an equal position is 
guaranteed to each individual participant and therefore parcel owners could 
not demand additional e.g. spccial advantages. · 
o Building-grounds regrouping enables faster objects construction beginning, 
parcel owners are not obliged to pay sales tax and some other taxes. 
• At the same tirne the regrouping procedure enables the commune to gain in 
a ven; elegant way parcels for puhlic traffic, green, and recreational grounds. 
3.0 CONCLUSION 
A t the end the first sentence of this article should be recalled again, namely that 
.L-\..housing policy is land policy and the construction of cities is the execution of 
land policy in practice. For the current state of affairs in Slovenia, the thought shoulcl 
also be read from right to left something like: since there is no housing policy neither 
land policy nor its execution in practice are needed. Amen to that! 
In doing this we tend to forget that in future owners of parcels will not only build but also plan spatial use. The strongest among them will also deeide where ancl 
what is to be build. The times when above all the architect was the one to clecide on 
the city's spacial expansion and when the quality of development plans depended on 
their graphical equipment are simply over for good. Jnterventions into space will be 
above all interventions into private property and in democratic societies, the latter 
must be subtle. If in the past the architects' ruling-pen dominatecl the propcrty, from 
now on it is the property which dominates not only the ruling-pen but also capital 
looking for its location. In this triangle, surveyors should look for their opportunity. 
It is ment for now ancl here and not in ten years' tirne, than they will be left with the 
role of "contracted executors". Unfortunately, the present clirection of the education 
and the disposition of the profession do not raise any hope for an essentially 
different and more promising scenario. 
Literature: 
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Berlin, Berlin, 7 sir. 
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okolja in stavbno-zemljiški politiki, Ljubljana, 12. maj 1994, 5 str. 
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Geodetski vestnik 38 (1994) 4 
Rakar, A., 1986, Nekateri vidiki gospoda1jenja s stavbnimi zemljišči v ZR Nemčiji, Geodetski 
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kontroliranega trga stavbnih zemljišč na območju mesta Ljubljane, FAGG-Institut za 
komunalno gospodarstvo, 102 str. 
Review: Prof Dr. Tone Klemenčič 
ProfDr. Milan Naprudnik 
Geodetski vestnik 38 (1994) 4