Who has the right and how to stop the apartmentization of the coast

This summer season, more than ever, there is talk about excessive construction and apartmentization of the Croatian coast. This topic has even surpassed the counting of tourists in terms of its popularity in the media. Tourism experts are publicly appealing for the urgent and decree-based halt of property construction for short-term rental before it becomes too late. However, no one is asking whether anyone has the mandate to make and enforce such a decision. Is that power in the hands of the state or local communities? Therefore, we contacted experts from various fields, mainly legislation, to explain the roles and legal possibilities for making and enforcing such a decree. Their opinions are divided.

Branko Bogunović, a partner at HD Consulting and a professor at the Faculty of Tourism and Economics in Pula, who recently participated in a HUP round table on key tourism challenges, later commented that the central state can theoretically prohibit further construction, but that would actually be legal violence.

– The solution should be sought in the spatial plans of local communities, municipalities, and cities that have the authority to say where and how much to build. On the Greek island of Santorini, all houses are white with blue roofs, and similarly in parts of Canada, where investors are detailed about what they can build, how, and from what materials if they want to obtain a permit. This means that local communities can decide whether construction can take place at all, how, and how much. Another tool for reducing the pace of new construction is changing the tax burden – says Bogunović.

He also pointed out that we had more restrictive construction conditions in former Yugoslavia than today and that we have harmed ourselves through liberalization. A major problem he warns about is that there is not a single central place in Croatia that keeps records of issued building permits while simultaneously monitoring what is happening with infrastructure systems. Insights and statistics from local communities are very poor.

– We worked for two counties and three destinations assessing sustainability and realized that there is chaos everywhere – says Bogunović.

Lawyer Stjepan Lović from the law firm says that it is not possible to prohibit the construction of apartments on the coast, except possibly by changing urban planning regulations. However, even if they are changed, warns the commercial law expert from Lider, the construction of new accommodation will not stop.

– People will build houses for themselves instead of apartments and adapt them for tourist rentals, and there is simply nothing you can do about it. It is private property, and everyone has the right to rent their house or part of their house to someone. So, that is not a solution; rather, the tax policy that currently favors apartment renters needs to be changed – says Lović.

In other words, it is very difficult to prohibit someone from building a house in a construction area if they meet all legal requirements, even if the political will were such that further construction of apartments is prohibited. If we look a little ‘deeper’, a complete ban on residential units would already infringe on constitutional provisions because it violates people’s right to choose their place of residence or vacation home (weekend house). The fact that something is not a neck (apartment) but a head (house) cannot change anything.

According to Lović, renters would have to register a business, pay all obligations as entrepreneurs, and pay profit tax, and then everyone would know whether it is worth engaging in that business or not.

That it is not possible to prohibit the construction of buildings that would formally be houses or buildings, but in reality apartments, is confirmed by the president of the Croatian Chamber of Civil Engineers Nina Dražin Lovrec, who says that the Law on Spatial Planning (Article 3, paragraph 1, subparagraph 8) defines the concept of a construction area. It is an area defined by a spatial plan where a settlement has been built and an area planned for the arrangement, development, and expansion of the settlement, consisting of the construction area of the settlement, a separate part of the construction area of the settlement, and a separate construction area outside the settlement.

– In the construction area of the settlement, residential buildings with residential units are built, which can be rented according to tourism regulations, so changing the spatial plan would not prevent apartmentization – says Dražin Lovrec.

She reminds that the mentioned law also defines a separate construction area outside the settlement (subparagraph 11), which is an area defined by a spatial plan as a spatial unit outside the construction area of the settlement planned for all purposes except residential.

– Therefore, tourist purposes can also be planned outside the construction area of the settlement. By changing the spatial plan, only the construction of hotel complexes, restaurants, and similar facilities could be anticipated in those areas designated for tourist purposes, without the possibility of building apartment buildings – says Dražin Lovrec.

Lawyer Tomislav Strniščak from Čakovec says that the legislator, as well as local government, has a whole range of instruments at their disposal to slow down or prevent the apartmentization of the coast. However, it is not limited only to apartmentization but speaks about preventing construction in the coastal area in general. He refers to Article 52 of the Constitution of the Republic of Croatia, which gives authorities broad powers to determine which natural resources are of interest to our country.

– These resources can be protected by special law, so the coastal strip can also be protected within a width of, say, 2000 meters along the sea. In that sense, it is possible to adopt a law that limits construction on the coast or islands. It is less important whether it will be apartments, houses, or apartments; construction is construction – says Strniščak.

But he also emphasizes what Lović talks about, namely, it is necessary to first determine what is meant when talking about ‘apartmentization of the coast’. It is important to distinguish whether it is about building buildings for permanent residence or building buildings for occasional stay. He points to the Regulation on the classification and categorization of hospitality facilities from the group of other hospitality facilities for accommodation, in which both apartments and vacation homes are defined, which means that it would not be enough to adopt a regulation that prevents apartmentization because vacation homes or some other residential buildings that would actually be used as apartments could still be built.

– I am not convinced that urban planning can precisely regulate where it would be allowed to build residential buildings for permanent residence, and where apartments or vacation homes, and how this would be controlled except by strictly punishing a person who has registered residence where they do not live, which is regulated by other regulations. This would again interfere with other laws, especially the Law on Residence. The simplest way is to regulate by law and regulations as well as urban planning where construction is allowed and where it is not (regardless of the type of building being constructed), while I believe that the provision on where apartments can be built, and where vacation homes or properties for long-term residence – living, would be without real effect, as long as other regulations, especially those regulating residence, are not harmonized for that purpose. Because one thing is how someone names a certain object, another is how it is actually used – says Strniščak.

But he warns of the problem that would follow if everything were harmonized. The question is, namely, enforcement, or who will control it, punish, and force property owners to have their ‘vacation home’ also be their place of residence. Therefore, our interlocutor believes that ‘property owners would be burdened with disproportionate obligations, moreover, a limitation in the disposal of property’.

Lawyer Veljko Miljević says that the problem is not in prohibiting further apartmentization, but in the permit for constructing buildings in places where such buildings should not be located.

– An apartment is just part of a building, although the entire building can also represent an apartment, and the responsibility for approving the use of an apartment in tourism is on the one who grants such approval. The approval for the use of an apartment should not be granted if the apartment as part of a building or the apartment as a separate building is constructed in a space where it should not be located – believes Miljević.

He further notes that the General Urban Plan for a specific area cannot be adopted without holding a public discussion, so citizens have the opportunity to express their views on which objects can be located in a specific area.

But given the number of properties built in the last year, which is close to 60,000, the opinion of citizens (who are often renters in local communities themselves) is not a mystery. Meanwhile, the number of issued permits is rapidly increasing; we have 1.4 million beds in private accommodation for rent for four million inhabitants, and perhaps it has already gone too far.