Abstract
Land ownership determines fundamental interests, prescribing a framework of alliances and oppositions around its development and use. The public sector constitutes one of the main categories of large landowners, although this type of ownership takes more than one form, due to the wide variety of public sector bodies holding property. Public land management became one of the focuses of austerity policies in many European countries after the burst of economic crisis in 2008–2009, externally imposed in those countries that went through bailout programmes. In Greece, the history of land policy shows that a fundamental objective of state policy was the distribution and liquidation of public land, a policy that contributed to the formation of an extensive system of small land ownership. From 2010 onwards, a plethora of formal legislation sought to accelerate development procedures for the remaining large-scale public property, as a background resource to attract large-scale, so-called “strategic”, investments. This paper explores the critical characteristics and outcomes of the reforms to transform public land policy, identifying the interactions with urban planning, before and during the economic crisis. Taking a longer temporal view, the paper highlights the entrenched relationships existing between public land policy, urban planning and property development processes and their significance in the diachronic continuities often concealed in major policy reversals and reforms. It argues that ultimately there is a lack of a coherent and sustainable public property valorisation policy, being deprived of any institutional innovation for new forms of urban development, as well as of social acceptance.
Introduction
Land ownership is a critical parameter for understanding urban development processes, and a key factor affecting the specific longer term characteristics of urban change. This is because it determines the basic interests of those involved in this process, and also the framework of collaborations and contradictions that structure the wider society and are included in these same procedures and processes of both urban development and urban planning (Elliot and McCrone, 1982; Kivell, 1993). Differing conceptions of property and property rights often exist simultaneously, and some of these represent something more than just a physical possession, a fact that has various implications for urban development and planning processes. Property rights “are relationships of power, obligation, kinship, custom or convention” (Harrison, 1987: 34). In the past, a number of studies highlighted the interaction between the structure of landed property, urban form, development processes and planning, while others explored the diverse and complex economic, political and institutional factors that affect the development of land and real estate, with particular emphasis on the role of the different stakeholders and actors (Dyos, 1968; Healey and Barrett, 1990; Massey and Catalano, 1978; Panerai et al., 1977; Topalov, 1973; Ward, 1962). The role of land ownership, both in the development process and in public policy, within different socio-political contexts, is a crucial aspect that needs further study. Most studies on land ownership focus on the private ownership of land and the relevant strategies developed by individuals. Indeed, as Chen and Cui (2014) note, the theoretical concept of public property remains a field that has not been extensively studied.
The term “public property” is used here in a general way and not in its strictly legal sense. It therefore refers to any property belonging to or being managed by a public or semi-public entity, regardless of their legal status (i.e. public law legal entity, S.A. public corporation, etc.). The public sector is one of the main entities within large landownership, representing a large variety of agents that own different forms of property. These properties cannot be regarded as being strictly public, especially if we consider the post-1990s changes in the legal status of many former public legal entities, and their subordination to management rules that applied to the private sector. In the case of Greece, though, we could include them in the “public property” discourse for two reasons: firstly, in most cases, the properties of these bodies have been acquired after expropriations at public expense and, secondly, as far as public consciousness is concerned they constitute public properties. The public sector plays a role in land development either through the direct management of the different agents’ property, namely policies for public land, or through the redistribution of public land’s value by means of urban planning and regulation of spatial development in general. In the field of urban planning, the interest in public property and the public property institutional owners or managers emerged from the 1980s onwards through the discussion that gradually developed around the “reuse” or the “regeneration” of derelict urban land, such as old ports, railways, military and brownfield areas. The relevant literature has revealed the challenges and opportunities these, usually publicly owned, properties have created. Furthermore, it offers interesting information about the management strategies adopted by their institutional owners or managers and the subsequent transformation of these properties (ADEF, 1987; Chaline, 1999; Kivell and McKay, 1988).
The distribution of property rights and generally the structure of ownership has been, and remains, a key factor not only in the development of land, but also in the forms the development process takes in a variety of contexts. Public ownership has played an important and distinctive role in this distribution. This role has varied over time, and across different national frameworks – especially in relation to major interventions, such as urban regeneration schemes (Couch et al., 2003, 2011; Karadimitriou et al., 2013). Leveraging public land to attract investment has been a common practice within the implementation of major urban regeneration projects throughout the last 30 years (Clark et al., 2010; Kafkalas et al., 2015), a period during which urban regeneration was the dominant urban policy “paradigm” for addressing the problems of “regions in crisis”. In the context of the rise of financial capitalism, the search for new markets created a new profile for cities – one that allowed both cities and investment in them to become “engines” for the creation of wealth (Hall, 1988). Indeed, as Swyngedouw et al. (2002: 547) highlight, investments based on “large-scale urban development projects have increasingly been used as a vehicle to establish exceptionality measures in planning and policy procedures”. As a result, one of the prevailing trends in the wider domain of urban regeneration policy was large property development, in the form of investments made by public–private partnerships (PPPs), through the cooperation of large private investors, often investment groups and public authorities (Carmon, 1999). From the 1990s onwards, whereby mobilising land as an accumulation strategy became dominant (Kaika and Ruggiero, 2015), a critical element of urban policy was the decline of the central interventionist state and a shift towards forms of development based on public and private sector partnerships, which have been seen by Swyngedouw et al. (2002: 547) as an element of the “new urban policy” approach, “poorly integrated at best into the wider urban process and planning system”. Furthermore, during the last 15 years, in the context of neomanagerial policies of state reforms, the task for efficient public real estate management has gradually emerged in many European countries –such as France and Italy– as a public policy in its own right. Giving emphasis to private sector principles for managerial practices and introducing new actors and tools, the main goals of this policy are financial returns and/or cost decreases for the administration as well as debt management obtained mainly through the reduction of state ownership (Artioli, 2016a, 2016b). In the wake of the global financial crisis of 2008, in particular, attracting private investment to public property was urgently promoted, both in order to tackle the effects of the economic recession and even, as was the case in Greece, as a basic tool to address the financial and debt crisis. The tendency of public land and assets “fire sales” has been discussed in the literature as part of austerity urban policies focusing on public deficit reduction and debt management (Edwards and Imrie, 2015; Peck, 2012; Streeck, 2014b). More recent studies have argued that public land financialisaton is a form of entrepreneurialism of the local state that assumes commercialised interventionist practices as property speculator (Beswick and Penny, 2018). Stressing the importance, however, of more middle-range and context-related analysis of institutions and policies, other studies have highlighted how public properties embody specific processes of urban restructuring in European cities and therefore deserve to be analytically distinguished from other structures of properties in the study of urban development projects (Adisson, 2018).
In Greece, regarding the role of land ownership in shaping urban space, a number of studies have focused on urban land rent and the development processes or on the characteristics of land and urban planning policies (Delladetsimas, 2006; Economou, 1999; Economou and Petrakos, 1999; Getimis, 1989; Mantouvalou, 1996), thus highlighting the particularities of the urban space production framework in Greece, such as the extensive small-scale land ownership structure and development patterns or the widespread phenomenon of urban expansion by means of unauthorised settlements, etc. In Greece, academic and policy interest in public property was renewed during the economic crisis, as a result of the relevant privatisation policy, essentially of a neoliberal nature, adopted due to the commitments stemming from the country’s bailout programmes (Vitopoulou, 2010). Both in the public debate and in the discussion among experts, the different, even contradictory, views and perceptions around this issue have been brought to the fore, concerning mainly the character and the economic, social and political impacts of the particular policy, the role that the public property could play in the development process and the formulation of recovery strategies, the managing of public goods and resources, etc. Some scholars (Hadjimichalis, 2014; Makriyanni and Tsavdaroglou, 2015) have placed the case of Greece in the discussion on contemporary land grabbing processes and the generalised privatisation of the commons worldwide (Borras et al., 2011; Harvey, 2005; Sassen, 2013; Swyngedouw, 2004). At the same time, there have been significant protests and reactions from grass-roots movements and citizens’ or other organisations for many public land development schemes, some of which date back to the pre-crisis period.
The core interest of this paper is not to analyse the specific institutions and characteristics of public land policy per se. It rather attempts to bring into the forefront of the discussion the entrenchment of relations between public land policy, urban planning and the property development processes. In the case of Greece, the nature of such interactions has become very apparent, highlighted by the fact that they have been extremely important in the historical formation and persistence of the prevailing small-scale land ownership structure, small-scale development patterns and a planning system that is based on and reinforces this structure. The ultimate aim of the paper is to contribute to the understanding of current public land and planning policies, mostly related to the 2008 financial crisis in Europe. However, the issues should be viewed across a much longer temporal span to show the significance of the origins and diachronic continuities that are often concealed in major policy reversals and reforms. This approach highlights the main arguments of the paper: firstly, that the recent public land privatisation policy is not a contingent response to the crisis, but rather originates in previous attempts at instigating more neoliberal policies, stemming from the late 1980s and 1990s. Secondly, focusing on the Greek case, that the liquidation of public land constitutes a diachronic position adopted by the state, not only in order to increase public revenue, but also and more importantly, as a means to serve social needs (such as housing and public amenities), which were otherwise served by the welfare state. It is within this context that the attempts of the Greek state to shift from the small-scale urban development patterns towards larger and more capital intensive development should be considered. Therefore, the paper is divided into three main periods: a brief historical analysis is provided for the period from the 1920s to the 1970s, highlighting the origins of public land policy and its influences on urban development. Then, the paper analyses the period from the 1980s until the outbreak of the financial crisis in the country in 2009, with reference to those policy reforms that attempted to introduce the issue of large-scale public land valorisation. Finally, the crisis period is examined, focusing on the main reforms regarding public land and spatial planning aimed at facilitating large-scale property development. The paper is based on long-term research in the field, as well as on the personal involvement in planning practice of the authors.
Public land policy from the 1920s to 1970s: Historical origins and influences on urban development
Following the rehabilitation of Greek Orthodox refugees arriving from Asia Minor in the wake of the 1923 compulsory exchange of populations between Greece and Turkey, a drastic urban transformation took place in Greek cities. During this period, public land policy included the distribution of small landed property to urban refugee families as well as to refugee peasant families, and it also firmly established small land ownership as the dominant – if not the only – land ownership system, both in urban and rural areas. During the period from the 1920s up until the first two decades after 1950, public land policy was practically dominated by the implementation of the 1920s Refugee Rehabilitation Programmes. Thus, on the one hand, the rehabilitation programme of urban refugees, despite being a programme of public housing, established a pattern of highly fragmented land ownership in what forms today the inner urban areas, especially of the two large cities, Athens and Thessaloniki. This in turn facilitated the expansion of the system of “antiparochi”, a unique housing provision system by which the owner of a plot provides this plot for the developer and gets in return a percentage of the developed property. On the other hand, the implementation of the rural refugee rehabilitation programme established similar patterns in the outer rural periphery, with the predominance of the allocation of very small-sized parcels. This structure, along with the potential for illegal subdivisions of these small parcels of rural land on the urban fringe, allowed easy access to landownership by the internal migrants who, in the first two decades after 1950, a period of fast urbanisation in the country, settled in the cities by building small illegal houses on their own small properties. As argued by Yiannakou (1993), one of the main features of this policy was the continuous transfer of public land reserves to the small household economy, both in urban and rural areas. Furthermore, the specific characteristics of the implementation of the programmes highlight the fact that not only were these programmes the cornerstone of land policy, but they were also the main basis upon which the interdependencies between the state and the urban development sector were developed (Yiannakou, 1993). Given that the state had historically been the dominant actor in the distribution of land resources since the 19th century, several key features of the then contemporary structure of landed property in the country – such as ambiguities in the ownership status, incidents of trespassing on public land and the bureaucratic nature of the implementation of land distribution programmes – ultimately became intrinsic characteristics of post-war urban development and urban land allocation. It has been further argued that, at least with respect to housing, this was an informal planning policy (Economou, 1987). In this context, the management of public property left under state control led to huge deficits in public land reserves and constituted a significant and persistent obstacle to effective urban planning.
In regard to the nature of public policy featured in the aforementioned programmes, it should also be noted that the land was managed by actors whose policy was shaped by criteria other than those of urban planning. Thus, land policy was controlled by three major bodies: The Ministry of Social Welfare, the Ministry of Agriculture and the Ministry of Finance – Agency of Exchangeable Property (i.e. properties resulting from the 1923 compulsory exchange of populations) along with the regional offices of the Management of Exchangeable Property (later named Sections of Public Estate Services). The Ministry responsible for urban planning was not involved in any of these policies, while the three bodies mentioned above were hardly involved at all in the various programmes for urban planning, even though the then contemporary structure of landed property in urban areas was formed either shortly before or during their rapid urbanisation.
The implementation of land distribution to landless households was a particularly slow process that lasted for many decades and actually took place during periods when there was pressure for development. This policy had an extremely pronounced long-term effect on the control of the land market, resulting in a largely unrestricted supply of land, initially in expanding urban areas, and later in suburban and second home areas. From an institutional stand point, the well-established “polynomy” (multiple and complex laws and modifications) over the use and development of land dominated any attempt to establish an integrated urban development policy and land use planning. Thus, formal planning was restricted merely to the implementation of “regulatory” policy, which emphasised, firstly, the gradual release of very small areas for development and, secondly, the possibility of developing each individual property separately. As a consequence, and in conjunction with the system of “antiparochi”, land could be acquired and developed without requiring any financial investment. The established interests in land, and the impact of the ad hoc state intervention in land distribution, were not essentially affected by attempted reforms in the post-1974 period. Instead, the reforms were effectively adjusted to those interests, and essentially extended the power of “regulatory” or “plot by plot” development (Yiannakou, 2015). Thus, planning practice fostered interdependence between state and small land ownership.
Based on Vitopoulou (2010), the public property management policies of the modern Greek state can be summarised as follows.
a) Policies of public property distribution and liquidation, emphasising two main directions: firstly, the use of public property for the implementation of sectoral policies (agricultural and economic policy, settlement and urban policy, social policy) through land distributions and, secondly, the transformation of landed public property into a more liquid form of capital, in order to increase public revenues (Yiannakou, 1993).
b) Policies for the legitimisation and purchase of trespassed public land. As illegal possession of any kind of public land is one of the most frequent practices in the public property domain, one usually associated with clientelistic practices, purchasing policies, although not always successful, basically formed the only strategy adopted by the Greek state to manage this problem.
c) Policies for the protection and valorisation of public property, which mainly constitute institutional attempts to record public lands, to reclaim the trespassed ones and, more recently, to enhance public property for development purposes.
In fact, the management of public property in Greece was diachronically characterised by a number of problems, which not only did not favour its effective protection and the development of a coherent valorisation policy in the public interest, but rather facilitated its systematic and illegal appropriation (Vitopoulou, 2010).
a) The complex, often contradictory and rather ambiguous institutional framework of protection and management as formed since the 19th century, and especially during the interwar and the first post-war period.
b) The long lasting failure to locate and record public property due to the vague and complex land tenure structure and the confusion between public and private property, as well as the authorities’ systematic lack of interest towards this matter.
c) The “polynomy”, the extensive bureaucracy and the incapacity of the central state to ensure any control, due to the large number of entities managing different categories of public land (ministries, public organisations, public law legal entities, etc.), with different and overlapping responsibilities and often contradictory management strategies.
d) The fragmented valorisation choices, mainly driven by micropolitics and clientelistic criteria.
In the above context, what we call “public property” in Greece concerns mainly those public lands that, for a variety of reasons, were not included in the land distribution and redistribution policies. Thus, nowadays, the public property available for potential development constitutes a major land reserve, characterised mainly by large estates, a feature that only applies to a rather limited extent in relation to private property. Comparing the 2003 and 2007 data of the Hellenic Public Real Estate Corporation (KED), published in 2010, when the recording of public property had been completed (see Table 1), it is clear that there is a large number of mainly small-sized, trespassed properties, and a smaller number of larger size free properties, which could potentially be developed.
Categories of public properties managed by the Hellenic Public Real Estate Corporation (KED).
Source: Data of KED, 2003 (Demou, 2003) and KED, 2010 (Daily Newspaper Kathimerini, 24.1.2010), published in Vitopoulou (2010).
Due to the greater availability of larger public properties, when compared to the usual medium and small-sized private properties, often policies regarding the development of large property ultimately refer to the development of public property, and vice versa. For this reason, the following analysis provides an overall examination of policies concerning the development of large real estate property, with specific references to public property.
Public land policy and urban planning reforms from the 1980s to 2000s: The rise of the large-scale public land valorisation question
The period 1980–1990
Records of the first contemporary attempts to modernise land policy, with a focus on the development and enhancement of large property, including public property, can be found in the “modernisation” policies of urban planning in the first period of “metapolitefsi”, that is, after the fall of the dictatorship and the restoration of democracy in 1974 (Economou and Petrakos, 1999; Yiannakou, 2015). One of the most interesting provisions of the Planning Law 947/1979 – the first planning legislation introduced by the then conservative New Democracy government, with the aim of reforming the long-established system of regulatory planning – was the proposal for an alternative development or redevelopment system, using the “Zone of Active Planning” tool. The development of these zones would be managed by a development corporation, either private or private–public partnership, called a “mixed economy corporation”. The potential participants would include a publicly owned development corporation, the Public Corporation of Urban Planning and Housing, local authority agencies and other public bodies and private agents. All land within such a zone, public or private, would be under the jurisdiction of the proposed development corporation. Obviously, the “Zone of Active Planning” tool aimed at enlarging the size of the real estate development sector, but it also aimed at integrating into it the larger, and mainly publicly owned, property. It is interesting that, at that time, the government estimated that, over the following 10 years, about 10% of housing development would be facilitated through this new system (Yiannakou, 2015). Law 1337/1983, which followed and replaced the suspended Law 947/1979, in line with the then socialist PASOK government policy of strengthening the role of the public sector, redefined the nature of the “mixed economy corporation” through the “Zone of Active Planning”, laying down the pre-condition that the shares of the corporation should be at least 50% publicly owned.
The very few projects that attempted to implement the “Zone of Active Planning” tool under Law 1337/1983 concerned only the development of publicly owned land. A typical example was the case of the “Zone of Active Planning” in the Municipality of Polichni, Thessaloniki, which was an attempt to develop an area to a large extent consisting of municipal land and occupied by squatters, along with an, abandoned at that time, army barrack, and other privately owned land. The project remained on the urban planning agenda of the city of Thessaloniki for more than a decade, without the stakeholders getting beyond the project elaboration and the initial discussion stage. At the end of the 1990s this attempt was officially abandoned, and the area, except for the abandoned camp, was planned according to the standard regulatory planning system (Vitopoulou, 2010; Yiannakou, 2008). Presumably, the only planning project implemented in accordance with the “Zone of Active Planning”, as proposed by Law 1337/1983, was the “Zone of Active Planning” in the town of Kozani. This last is a project basically of entirely public character (98% of the development corporation’s share capital belonged to the Municipality of Kozani and the remaining 2% to a local development company), which concerned publicly owned land and a public housing programme for the rehabilitation of families who had been evicted from their homes in surrounding villages to cater for the needs of the Public Power Corporation (DEI).
In regard to public property management during this period, the foundation of KED by Law 973/1979 was designed to be the first systematic attempt to create a coherent public property protection and valorisation policy, with particularly ambitious goals: firstly, it included the completion of the recording of public property (i.e. by the Ministry of Finance – Agency of Exchangeable Property, the Ministry of Agriculture and the Ministry of National Defense). Secondly, it allowed for public property valorisation and the implementation of a dynamic land policy (i.e. financing public works and public building construction by management incomes, the creation of a land bank to implement urban development projects, property purchases to influence the real estate market, etc.). Thus, a new body was created with significant responsibilities for both land and planning policy, the necessary tools (e.g. possibility of extensive expropriations) and financing. However, KED has not proved able to develop a long-term and comprehensive land policy or an effective strategy for public property management and valorisation, throughout the national territory, nor has it ever managed to play a substantial leading and coordinating role, a role that, in fact, was not even foreseen by its founding law. On the contrary, KED essentially pursued the well-known practice of fragmentary, short-term and local range management, using what had been, up until then, established means: sales and leasing through auctions and land exchanges, as well as concessions (usually in use) to various public bodies and organisations to meet their needs. Attempts to activate public lands for urban development returned to the forefront from time to time, along with the arguments of preserving public property, increasing public revenues and controlling land prices, but with limited results (Vitopoulou, 2010; Yiannakou, 1993).
The period 1990–2009
Introduced in the early 1990s by the New Democracy government, so-called “private urban planning” provided the potential for a type of private sector-led planning, which could also have been considered as a development tool for larger estates (Zamani et al., 2016). This planning tool was part of a wider venture for a more extensive liberalisation of state policies, and an attempt to promote privatisation in various sectors. Adopted by Law 1947/1991, the tool allowed for estates of public or private ownership, of 10 hectares or more, to be developed based on a plan prepared by a private developer. Law 1947/1991 attempted to divorce this system of development from statutory urban planning, and it did not require the integration of such projects into the General Urban Plan (GUP) of the municipality concerned. The implementation of this planning and development tool was not feasible, due to constitutional obstacles. The High Court stipulated that the areas planned with this specific tool should be proposed by the statutory plan. This failure was also associated with a general failure to liberalise and privatise crucial economic sectors, which had, up until then, been under state control (Trantidis, 2014). The reintroduction of this tool through a similar one called PERPO (“Special Regulation Planning Areas”) by the later Law 2508/1997 of the PASOK government, and the provision for its designation by a GUP, did not made the tool more successful. Some relevant planning projects based on this tool were enacted much later, and shortly before or even after the official beginning of the economic crisis in 2009, in a period of collapse of the real estate sector (Yiannakou, 2015). Other similarly motivated regulations of the early 1990s, such as the “Zones of Controlled Development (ZEA)” (Law 1892/1990), intended to create favourable conditions for attracting investments in areas where large-scale urban interventions or transport infrastructure were planned (Giannakourou and Economou, 1993), faced a similar fate, remaining essentially inactive.
In fact, the period that could be considered a critical one for the reorientation of public policy towards large, primarily public, property development is from the end of the 1990s until the mid-2000s. The changes in the structural characteristics of both land management and development systems, and of the construction industry, were related to the following: the significant increase in public investment in transport infrastructures with European Union (EU) funding; the orientation of the major interventions towards the improvement of public spaces and the increase of cultural facilities, particularly in large cities (see Thessaloniki European Cultural Capital 1997 and Athens 2004); the then emerging reorganisation of the construction enterprise sector, with a trend towards greater capital formation; the creation by large financial institutions and construction groups of new business groups in the real estate sector; the entrance of real estate companies into the stock market; and, finally, the attempted restructuring of public–private sector relationships in the production and management of the urban space in general, and in traditional public works in particular (Economou and Petrakos, 1999; Mantouvalou and Balla, 2004; Serraos et al., 2009).
In a wider economic context, all real estate sectors, including housing, commerce, leisure and tourism, etc., were characterised by a new and rapid rise. It would seem that the main objective was to create the appropriate conditions to attract larger scale investment in real estate, by creating new business and management groups of private or mixed character, and by developing the largest available areas of land. Within this general context, and in line with similar trends in other European countries, one could argue that a more specific and coherent public property management strategy began to evolve, gradually setting its focus on private sector development.
An important step in this direction was the creation, from the mid-1990s, of new real estate agencies by the majority of the public bodies that owned or managed public property and the transformation of existing ones into S.A. companies in order to develop their properties. This concerned the tourist, railway and telecommunications organisations, the port authorities, the army, universities, etc. Even the Greek Orthodox Church, one of the largest property owners in Greece, founded two S.A. companies to undertake funded projects and manage its property for profit. At the same time, a number of laws introducing financial tools and methods, new to Greece, for a flexible framework of real estate management and development, and aiming at the creation of a new real estate market, were passed: Law 2778/1999 on the establishment of Real Estate Investment Companies, Law 3389/2005 on PPPs and Law 3581/2007 on the sale and leaseback, leasing and the private finance initiative (PFI). KED adopted these instruments as key tools of its new public property development policy, initiated at the beginning of the 2000s. Regarding PPPs, a tool that was seen as a pillar of the new development model, KED encouraged their use both for sheltering central and regional public services, thus easing Public Investment Programme, and for developing large public properties. These last could accommodate a wide range of development projects, including commercial centres, hotels, recreational areas, residential development, theme parks, golf facilities and wind farms, which, according to KED, if implemented exclusively by the state, would have been an unfeasible operation, mainly due to its lack of capital and know-how (Vitopoulou, 2010).
Despite the keen interest expressed in the PPPs and public properties by large technical groups, hotel businesses and real estate companies, as well as Greek and foreign banks, throughout the 2000s and right up until the beginning of the economic crisis, no large public property development project had been implemented on the basis of this tool. On the contrary, the use of PPPs was limited exclusively to the construction of public buildings and the provision of public services (schools, nurseries, sports multiplexes, police premises, administrative and university buildings, fire stations, health facilities, etc.) (Vitopoulou, 2013).
The period after the 2009 crisis: Valorisation versus liquation of public land
During 2010–2015 the discussion over, and the dominant policies to address, the economic crisis brought to the fore the issue of large public and private properties as a background resource to attract major, private so-called “strategic” investments. At the same time, the so-called acceleration and simplification of large property development, for investment purposes, were pursued by a plethora of laws within the context of a different urban and entrepreneurial development model, which diverged from the traditional model of Greek “SME capitalism” (Giannakourou and Kafkalas, 2014). The main changes during this period, promoted as part of the bailout agreements of the country, known as Memoranda, are summarised in two axes: (a) the establishment of institutions for the sale of the public property and (b) the provision of a framework for spatial planning that facilitates the opening up of large public property development to private investment.
Regarding the first axis, Law 3986/2011, “Urgent measures for the implementation of the Medium-term Fiscal Strategy Framework 2012-2015”, established an independent non-governmental privatisation fund, the Hellenic Republic Asset Development Fund (TAIPED). According to law, all movable and immovable private property of the Greek state was to be ceded to TAIPED, without exchange, as well as assets of public corporations whose share capital is wholly owned, directly or indirectly, by the state or public law legal entities. The same law established a specific spatial planning tool for public properties under development, as well as specific procedures for the necessary licensing, and the setting of environmental terms, land uses, special building conditions, restrictions, etc., of private investment projects, which would be selected through the relevant tender procedures. Hence, a planning tool called Special Spatial Development Plans for Public Property (ESCHADA) was introduced, to enable the valorisation of public property and allow its flexible development, thus making it more attractive to investors. Another tool introduced to this end by the same law (modified by Law 4092/2012) was the right of superficies (or surface right) on public property. In line with other foreign laws, a time limitation of the right is set up for a period of 5–99 years with the possibility of unlimited extension at the end of the period. This tool was considered to reconcile the political will not to sell public land, as the State remains the owner of the land, and the need to provide the necessary investment flexibility and security (Lymperopoulou, 2015). In any case, according to Law 3985/2011, “Medium-term Fiscal Strategy 2011-2015”, revenue from public property development was to be used exclusively to repay the public debt.
The assets ceded to TAIPED fall into three categories: land development, infrastructures and corporate portfolio. Thus, TAIPED was assigned two distinct categories of venture, with different theoretical objectives and perspectives that required a different strategy and know-how: on the one hand, relating to real estate management and the development of mainly urban and touristic properties (first category of assets), and on the other, relating to the privatisation of public enterprises, organisations and infrastructures (second and third categories of assets). The first category included the largest number of entries, as the portfolio already compiled by KED was directly transferred to TAIPED (Vitopoulou, 2013). Hadjimichalis (2014) provides a detailed recording and mapping of these public properties.
It is worth noting, however, that the strategy that had been developed by KED before the crisis period was taking full advantage of almost all the financial tools and modes of real estate management and development, with special reference to the PPP process. Thus, KED tried to promote a culture of large property development, which was new within the Greek context, and that, depending on the development mode, could theoretically ensure public interest in the process to some extent. In contrast, up until now, because of its statutory purpose, and possibly under the pressure of the present conditions, the practice adopted by TAIPED seems to be mainly the transfer of property rights (ownership, surface) and/or the adoption of long-term leases and concessions to the private sector (sale and leaseback, leasing, PFI), either avoiding or being unwilling or unable to use the PPP tool and participate in the development process, and therefore in the distribution of a public investment surplus.
As for the second axis, which concerns the wider field of spatial planning, critical legislation, namely Law 3894/2010, “Acceleration and Transparency of Implementation of Strategic Investments”, also known as the Fast Track Law, and its supplementary Law 4146/2013, “Creation of a Development Friendly Environment for Strategic and Private Investments”, were introduced after 2010. This law allowed for the Special Spatial Development Plans of Strategic Investments (ESCHASE) to be introduced, which specify the requirements for the implementation of so-called strategic investments in private property. Based on the model of ESCHADA, both ESCHADAand ESCHASE use special investment targeting as an urban planning tool: both are oriented to public and private property development, combining spatial, environmental, developmental and commercial considerations, with the apparent aim of making the development of public and private property more flexible and, thus, a more attractive investment proposition. Within this context, we should also add the legislation related to investments in the tourism sector, and in particular Laws 4179/2013, “Simplifying Procedures for Strengthening Entrepreneurship in Tourism”, and 4279/2013, “Simplifying Operating Procedures of Tourism Enterprises and Infrastructures, Special Forms of Tourism”.
The spatial and urban planning reform Law 4269/2014, “Spatial and Urban Reform – Sustainable Development”, as revised by Law 4447/2016, “Spatial Planning-Sustainable Development”, refers to the overall restructuring and simplification of the spatial planning system and the hierarchy of spatial plans. It also attempts to introduce the private sector into the official spatial planning system. The law introduces a new “regulatory” planning tool, the Special Spatial Plan (ECHS), which essentially seeks to extend the models of ESCHADA and ESCHASE to other cases of public and private or mixed-type properties, while operating as special land use plans, intended for the implementation of large-scale or strategic projects and interventions. At the institutional level, the SSPs have a similar status to that of the Local Spatial Plans (TCHSs, relevant to the old GUP), and they are approved in a similar manner to the TCHS procedures, by presidential decree (making this planning tool more regulatory than the old GUP). According to Giannakourou (2015: 4), with the introduction of ECHSs, the systematic classification and integration of special land use planning policy tools into the spatial planning system was attempted for the first time, thus filling an important gap in the previous legislation, as the special land use planning operations are now subject to regional spatial planning.
Finally, in order to determine areas of private urban development, Law 4280/2014, “Environmental Upgrade and Private Urban Development – Sustainable Development of Settlements – Forestry Legislation Regulations”, poses a rather complex framework of pre-conditions and tools, such as the “environmental balance” tool, for the hitherto urban planning practice. This tool was used to cope with issues of the constitutional legitimacy within this type of development.
The above-mentioned policies clearly aimed to simplify and speed up the planning decision process in order to attract investments in large public real estate. Yet, by the end of 2017, only a total of eight ESCHADA and one ESCHASE were approved, all in tourism areas for which many earlier development schemes, from the pre-crisis period, had been encouraged. It could be argued that, since 2010, the public property policy adopted within the framework of the country’s bailout programmes in fact constitutes the culmination of the policy launched in the late 1990s. The latter had introduced a series of measures and tools that aimed to establish a coherent management and development of public assets under the promotion of the cooperation between the public and private sector, an effort that in practice had no significant results. During that period, privatisation was not the apparent target, since public land remained under the state-controlled S.A. corporations. Yet, it could be considered as a clear step to facilitate public land valorisation, although with more capital intensive development, as indeed has happened in the case of the recent reforms. However, the development policy during the crisis period shows certain significant differences from that of the 1990s: it is a policy marked by the emergency situation of the financial crisis in the country and with an exclusive objective, at least until 2015, that of the redemption of the public debt. These features differentiate considerably the Greek example from other experiences of both public property activation and valorisation policies developed in recent decades.
After 2015 and despite the initial opposition to nearly all privatisations, the left-wing SYRIZA government that came to power attempted to improve the conditions and framework of public property valorisation as well as that of the on-going major privatisation schemes. This tentative introduction of a development perspective was to a certain degree expressed within the August 2015 European Stability Mechanism (ESM) bailout agreement (the 3rd Memorandum endorsed by Law 4336/2015). According to this, (a) a new independent privatisation fund (the “Fund” or “Super-fund” as it turned out to be called in Greek) would be established, managed by the Greek authorities under the supervision of the relevant European Institutions, with the objective “to manage valuable Greek assets, and to protect, create and ultimately maximize their value which it will monetize through privatisations and other means”. (b) A further provision anticipated that part of the targeted income that would be generated from the liquidation of public assets – a total of 50bn euros over the life of the new loan – was to be used for investments. More precisely, 25bn euros will be used for the repayment of the banks’ recapitalisation, and from every remaining euro 50% will be used for decreasing the “debt to GDP ratio” and 50% will be used for investments, a clause that is not, though, explicitly mentioned in the Supplemental Memoranda of Understanding of June 2016 and May 2017. In fact, as it is judged highly unlikely that the new “Fund” will ever generate this amount, there has been a strong criticism that, at the end of the day, the public assets privatisation income will be all used up to repay the new state debt. Also, in order to tackle the major criticisms of the way TAIPED had operated until then, it was declared that a legislative framework would be adopted “to ensure transparent procedures and adequate asset sale pricing, according to OECD principles and standards on the management of State Owned Enterprises (SOEs) and best international practices”, while “particular attention will be paid to maximising the value generation of the Fund’s assets and to avoid circumstances of asset sales below their fair value” (https://ec.europa.eu/info/files/memorandum-understanding-greece-august-2015_en, accessed 22 December 2017). However, at the same time, the government was committed to proceed with the on-going privatisation programme according to TAIPED’s Asset Development Plan.
The new “Fund” was actually founded in May 2016 (Law 4389/2016), with the name Hellenic Corporation of Assets and Participations S.A. (EESYP), under which four direct subsidiaries were put: the Hellenic Financial Stability Fund; the TAIPED; the Public Properties Company (ETAD), that is the ex-Hellenic Tourist Properties S.A., which in 2011 absorbed the Olympic Properties S.A. and merged by absorption with KED; and the Public Holdings Company, which is in the process of being established to manage SOEs. Each of these subsidiaries manages its own assets, independently from the others. To some extent, the EESYP founding law reflects an attempt to ensure resources from the public assets management for development and the implementation of the Corporation’s investment policy. Law 4389/2016 defines as “investment policy directions” those investments that contribute to strengthening national economy, including important PPPs as well as investments that could contribute to public property assets valorisation and the increase of the relevant revenues. In other words, a policy similar to this one attempted but having failed to be implemented in the 1990s and 2000s is being adopted. Within this new public property management framework, the role of ETAD is redefined and strengthened: the ownership of an important number of state properties, most of which were just managed by ETAD until then, was transferred to the latter, including a list of properties from TAIPED, increasing the number of property titles included in ETAD’s portfolio to 71,500 (http://www.hcap.gr/?q=en, accessed 15 January 2018). Certainly, the efficiency and the socioeconomic impact of the recent changes in the public property management framework and policy remain to be judged in practice.
Table 2 briefly summarises the key policies examined in the preceding analysis for all three periods.
Major public land and urban planning policies in Greece.
Source: Yiannakou (1993, 2015); Vitopoulou (2010, 2013); authors’ research.
Conclusions
The study of the long-term interactions between public land policy and urban planning features both the continuities and reversals related eventually to the interaction between the state and the market. Public property comes to the forefront of state policies during situations of crises and/or restructuring with its privatisation discourse at the core of major reforms, and so was the apparent target of the bailout programmes adopted in Greece after the economic crisis. Important aspects of the market-oriented trends embedded in these policies are globally driven. However, the long-term entrenched relationships between public land policy, urban planning and the development process formed in specific contexts equally determine major changes in institutions and practices occurring under particular circumstances. The case of Greece offers plenty of material to emphasise the need for comparisons of the role played by the modifications of public land policies and the resultant ownership structures, at European and global scales, in urban studies (Adisson, 2018).
Historically, in Greece, the state does not seem to assume a more interventionist planning role to guide and shape urban development, but rather that of configuring those conditions that facilitate the broad access to land ownership and its easy exploitation, through a framework of simple planning rules and regulations. The changes pursued in the recent decades, although significant in terms of their institutional narrative, have not, in the end, transformed the role of the public sector within the dominant model of urban development. The study of policies regarding public property shows that, in this period, the remaining public land was not treated as a reserve through which the state sought to pursue its own planning policy, but as a land residue, split between a wide range of public bodies, yet very important because of the size of these public real estate properties. Both before and during the economic crisis, all relevant policies were mainly attempts to revise the public property management framework and the urban planning system, rather than an attempt to form an explicit urban regeneration policy and an urban transformation strategy involving the distinct public, private or even third sectors. While these sectors have their differences in views, interests and expectations, they also cooperate and share the costs, risks and the uncertainties of large-scale real estate development projects (Karadimitriou et al., 2013).
Within a context of consecutive political change and continuous economic recession, it is difficult to evaluate the characteristics and the real weight of the institutional reforms undertaken after 2010, both in the context of the crisis and in response to it. The plethora of laws, their multiple modifications and the complex tools that frame them raise the question of the real nature of the intended regulation “loosening” or “deregulation”, even within the context of a real estate sector in collapse. Provocatively speaking, one might expect that, given the history of public land policy, a policy oriented to public property liquidation could be potentially “successful”, as it constitutes a favourite for the Greek state procedure, while at the same time reproducing, of course, all its historically consolidated negative impacts.
However, the mass entry of a significant public property stock into a collapsed real estate market potentially leaves room for the occurrence of excessive land exploitation phenomena, and also poses the risk of reactivating problems that have led to this form of economic crisis in the first place, in many cases worldwide. In any case, it does not favour the development of a coherent and sustainable public property valorisation policy, with clear strategic objectives concerning the urban and tourism development of the country and seeking wide social acceptance. Moreover, while elaborating the on-going public property development schemes and setting up their objectives, there was no substantial public debate or any kind of co-formulating or participatory planning process whereby a significant “feedback” could be gained from local communities. This crucial dimension for the sustainability of the development schemes is part of the general lack of governance and dialogue culture in the field of planning in Greece, beyond the formal consultation procedures provided by the institutional framework; that is, the lack of an extrovert planning system that could, to a certain degree, favour democratic participation mechanisms, citizen-driven priorities and bottom-up initiatives.
Hence, the whole operation of the so-called reforms is deprived of any institutional innovation, which would facilitate the multi-levelled and multi-agency relations to enable the implementation of projects, both for the valorisation of the available real estate stock and for attracting investment in a mutually beneficial way for the public and private sectors. Such a situation would necessitate the joint assumption that the roles of the public and the private sphere are not purposely obscure, enmeshed in statist and rent-seeking structures, but clearly complementary (Kamaras and Yiannakou, 2017). Moreover, within a general framework of the public sector’s vulnerable position vis-à-vis potential investors as shaped by global economic forces, the even more unfavourable position of the Greek state, due to the budgetary situation and debt, remains a crucial factor. Undoubtedly, the conjuncture is not particularly conducive to equal negotiations and fair agreements so as to ensure the general interest and the setting up of well-defined limits for private sector action and strategies.
Footnotes
Acknowledgements
We would like to thank the two anonymous referrees for their constructive criticism and valuable comments on an earlier version of this article.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
