More socialism for post-socialist urbanisations?

By Irina Paraschivoiu (LSE) & Fabian Wenner (LSE)
After the demise of socialism in the 1990s, many Eastern European and Asian states saw a wave of privatisation of formerly public services and assets, from social housing to land itself. Planning, as part of the socialist heritage, has a difficult stand and needs to be re-strengthened to balance efficiency and equity.
Between 8 and 11 May 2014 the Faculty of Architecture of the Estonian Academy of Arts hosted the conference “Socialist and post-socialist urbanizations: architecture, land and property rights”. Drawing on the experience of Eastern European and Asian countries, the conference challenged the notion of post-socialist city itself and its definition in relation to socialism and capitalism. We both had the opportunity to present our work in Estonia and found ourselves discussing still much later over the ideas we had exchanged. Is there indeed a common urban post-socialist experience and, if so, what are its main features? What aspects of socialism still exist today and what can we retain for our work as planners? We found that most of our thoughts related to two broad themes: property (and its influence on post-socialist urban development) and (re)defining the role of planners in a post-socialist context.
The swing from socialism to market economies in today’s post-socialist countries in the 1990s involved the (re)introduction of private property rights in land. This altered the scope of planning, which has to take into account these rights and balance them against the public good – a societal renegotiation process that is still ongoing in many post-socialist settings.
In doing so, different countries chose varying approaches to the privatisation of land: In China – arguably post-socialist today – urban land is generally publicly owned but use rights can be traded, while rural land can be privately owned. In times of unprecedented urban growth this led to arbitrary ‘enclaves’ of highly valuable privately owned land if rural communities are incorporated in growing urban municipalities
Russia chose to allow land privatisation in steps after 1990 except for Moscow, but still only 8% of the country’s surface is now in private hands. Citizens hesitate to apply for land titles to save taxes, since in many cases this does not alter their housing situation. The immediate post-privatisation phase sometimes gave rise to chaotic intensive development, e.g. in holiday resorts, that planning now seeks to remediate. But planning powers over private land are weak and still need to be fostered.
Estonia took a separate path, trying to use the tax system as arbiter between efficiency of the market mechanism and social obligations entailed in private land ownership. It has introduced a Land Value Tax, based on the regularly estimated market value of plots without buildings, which incentivises owners to use their property efficiently according to the zoning plans. It also recovers land value gains induced by community investments (e.g. in local infrastructure) that otherwise come as windfall profits to the owners.
Challenges for planning in post-socialist environments are often aggravated by issues of land restitution and uncertain ownership, e.g. in Poland, causing problems of public service provision in cases where publicly used land is reclaimed by private individuals.
Väike-Õismäe, one of the biggest housing estates in Tallinn. The law on privatization of housing space was passed in Estonia in 1993. Housing ownership in Estonia is 82.3% (Eurostat, 2012)
A strong link between all the case studies presented in the conference clearly detaches itself: in post-socialist countries, there is a need to rethink between public and private interests. What most CEE countries seem to have learned, the hard way, is that they need to place themselves on a more middle ground, ensuring rights to private property while also the necessary land for public goods. Most countries, however, are still on their way in building up a stronger acceptance of planning as mediator and of its key role in driving (and guiding) urban development.
There can be many arguments for planning, but discussions from the conference pointed out clearly to two of them: strategic planning and the provision of public goods.
At its best, planning can have a strategic and coordinating role. It anticipates urban growth and sets out key areas for land development and provision of infrastructure. Complete privatisation has hindered this role for planning in many post-socialist cities, where municipalities which had privatized land had to lease or re-purchase it, at costs much higher than the selling price. In Bucharest, Romania, the plans for a North-South axis (Buzesti – Berzei) involved a number of repurchases of land and property by the Local Authority.
Provision of public goods has remained underprovided in many post-socialist cities. Social housing and green spaces rank among the areas where planning can bring much improvement. For example, almost all Central and Eastern European (CEE) countries divested their social housing stock, often below market value, leading to an unbalanced and fragmented housing market with poor quality dwellings in the hands of private landlords. Housing deprivation percentages are still as high as 17% to 22% in Hungary, Latvia and Romania while ownership rates range from 81.5% to 96.6% in the same countries. To tackle deterioration in these cases, legal incentives to cooperation and government subsidies are necessary.
So what are the lessons learned from the post-socialist experience?
While the ‘pendulum’ between public and private interests was maybe too far on the public side during communist times in many CEE and Asian countries, it can now be said that post-socialist cities need more consideration for the public good again. This idea has even more justification in our present post-financial crisis times. We can also ask if the notion of post-socialism is also applicable to Western European cities – years of deregulation and neoliberalism arguably had similar effects on the welfare state as the demise of socialism had on Eastern Europe. But even if we consider that urban developments in countries that can be classified as ‘post-socialist’, from China to Latin America, are so diverse that the notion of the post-socialist city can become blurred itself, a stronger role for (strategic) planning and public service provision in the face of private property rights could be identified as key components in a toolkit for post-socialist urban development.
Our participation in the conference was kindly supported by the LSE SU Travel Fund.
Irina Paraschivoiu
MSc Regional and Urban Planning Studies at the London School of Economics and Political Science. President / co-founder of Creative Room (Bucharest, Romania). Interest areas: regional planning and policy, participatory planning, urban regeneration.
 Fabian Wenner
MSc Regional and Urban Planning Studies at the London School of Economics and Political Science. BSc in Planning from TU Dortmund University, work experience in Urban Design (Albert Speer & Partner, Germany). Interest areas: land economy, transport, public policy, comparative urbanism.