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ZONING AND URBAN PLANNING 55 barriers to new construction are one of the 2 main factors (the other being rent control policies) that have led to a housing shortage in Sweden over the past decade. 11 WHAT ARE SOME GOOD PRACTICES IN ZONING? Recognizing the importance of zoning and urban planning, many economies require builders to obtain some form of zoning or urban planning approval before building or even before obtaining a construction permit. This is done to ensure that the intended building will be located in the appropriate zone (industrial, commercial or residential) according to the city’s zoning requirements. But economies go about this process in different ways. Some economies complete the process efficiently and effectively by making zoning maps of cities accessible to builders (in some cases online). In these cases builders access the maps to verify that their project’s intended location is in compliance with zoning regulations, and they can include this information with the building permit application. In Swaziland, for example, builders are responsible for checking the zoning maps and including the zoning information when submitting their permit application to the municipality. In the United States builders in New York City must complete a zoning diagram form available online and submit it along with other required forms to the Department of Buildings. The Department of Buildings will still review the form to check that the project complies with the city’s zoning policies. In other economies the permit-issuing authority checks the zoning compliance itself after receiving the building permit application. In The Bahamas, for example, a builder is required only to submit a permit application to the Building Control Unit. This unit then automatically forwards the application to the Town Planning Department for zoning approval, with no involvement from the builder. In Belize the Building Plan Committee of the Central Building Authority checks the permit application to ensure compliance with zoning, environmental and fire safety requirements. Neither of these processes requires the builder to take the extra step of actually obtaining a zoning approval before applying for a building permit— a good-practice scenario if completed efficiently without significant delays. But efficiency is not all that is important. Around the world, good zoning systems also need to be broadly inclusive, incorporating all groups in society to bring about positive social outcomes. They also need to be regularly updated to reflect changing needs and developments. Sixty-five of the 189 economies covered by Doing Business do require that builders go through the additional step of getting urban planning approval before obtaining a construction permit. Of those 65, the largest shares are in Europe and Central Asia (26%) and Latin America and the Caribbean (22%) (figure 6.2). This is a second-best scenario: a zoning system is still in place and zoning compliance is still verified, though not in the most efficient way. Nevertheless, requiring verification of zoning compliance is better than having no zoning system at all—with builders able to construct any type of project in any part of the city. Thirty-six of the 65 economies require builders to obtain approval to build in their intended location before they can receive a construction permit (table 6.1). Twenty-two of these 36 economies require a zoning permit as this form of approval. A zoning permit or zoning clearance signifies that the land use for the planned development is consistent with the zoning regulations. In Canada the building code requires a builder to obtain a zoning permit before even applying for a site plan approval and the technical review of a development application. Among the 22 economies requiring a zoning permit, some issue it more expeditiously than others. In the Philippines it takes 5 days on average to obtain the site clearance from the City Planning and Development Office that a builder must have to apply for a construction permit. In Bangladesh obtaining a zoning clearance from the Capital Development Authority (Rajuk) in Dhaka takes 45 days on FIGURE 6.2 Half the economies that require the additional step of obtaining a zoning or urban planning approval are in Europe and Central Asia or Latin America South Asia (2 of 8 economies) Middle East & North Africa (7 of 20 economies) 3% East Asia & Pacific (8 of 25 economies) Sub-Saharan Africa (8 of 47 economies) 12% 12% 11% 14% OECD high income (9 of 31 economies) 26% 22% Europe & Central Asia (17 of 26 economies) Latin America & Caribbean (14 of 32 economies) Note: The numbers in parentheses are the number of economies out of the total in each region that require the additional step of obtaining a zoning or urban planning approval. Source: Doing Business database.
56 DOING BUSINESS 2015 TABLE 6.1 What type of clearance is needed in economies with zoning requirements? Zoning permit is mandatory average, while obtaining one from the Chittagong Development Authority takes 40 days on average. In other economies the process is entirely different. In Belgium, for example, an urban planning certificate is required only for large-scale projects. This certificate not only verifies that Urban planning clearance or certificate is mandatory Urban planning clearance or certificate is generally obtained but not mandatory Afghanistan Albania Algeria Argentina Bosnia and Herzegovina Antigua and Barbuda Australia Côte d’Ivoire Bahamas, The Bangladesh Ecuador Bahrain Bolivia Iran, Islamic Rep. Cameroon Canada Kosovo Cyprus Comoros Lebanon Finland Costa Rica Macedonia, FYR France Czech Republic Madagascar Kazakhstan Dominican Republic Moldova Latvia El Salvador Nicaragua Lithuania Fiji Serbia Montenegro Indonesia South Africa Morocco Kuwait Spain Netherlands Mexico New Zealand Namibia Palau Philippines Papua New Guinea Puerto Rico (U.S.) Qatar Solomon Islands Romania United States Russian Federation Uruguay Senegal Venezuela, RB Singapore Sudan Tajikistan Trinidad and Tobago Turkey Ukraine Uzbekistan Vanuatu Note: A zoning permit signifies that the land use for the planned development is consistent with the zoning regulations. An urban planning clearance or certificate generally outlines conditions relating to the plot of land where the builder intends to build, including where construction is permitted on the plot (that is, the specific coordinates). Source: Doing Business database. the project can be built in the specified zone but also guarantees that the construction permit will be issued without problems—because much of the verification for the permit is done as part of the process for issuing the certificate. For smaller-scale projects all planning regulations are available online. These regulations are set at several levels—regional, municipal or special zoning—providing several options for verifying the regulatory compliance of the project. In 29 of the 65 economies there is no legal requirement to obtain an urban planning clearance or certificate. But architects normally request a certificate because it provides all the information needed to ensure that architectural plans are in compliance with building regulations. In some economies the information is available online, but in most the information can be obtained upon request. IS PERMITTING MORE EFFICIENT WITH ZONING? While obtaining a zoning or urban planning clearance represents an additional step in the construction permitting process, this does not necessarily mean that economies that require this step have inefficient permitting systems. Consider OECD high-income economies. As measured by Doing Business, the process for obtaining approval of a building permit takes 43 days on average in those where it includes zoning procedures, 62 days in those where it does not. Obtaining a zoning or urban planning clearance actually speeds up the process—by 19 days on average in these OECD high-income economies—especially where the builder can obtain the clearance directly online. The reason is that this step avoids back-and-forth interactions between the permit-issuing agency and the architect or even outright rejection of the project because of noncompliance. On average across all 65 economies that require the additional step, obtaining the zoning or urban planning clearance takes 26 days (of a total of 177 days on average to comply with all formalities to build a warehouse) and costs $402 (of a total of $15,709). These economies generally require only
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DATA NOTES 115 METHODOLOGY The Doin
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ACKNOWLEDGMENTS 253 of Aart C. Kraa
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ACKNOWLEDGMENTS 255 ALGERIA DELOITT
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ACKNOWLEDGMENTS 257 Gerald Mittereg
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ACKNOWLEDGMENTS 259 Siarhei Khvasto
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ACKNOWLEDGMENTS 261 Muhidin Karši
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ACKNOWLEDGMENTS 265 Laurence Idelet
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ACKNOWLEDGMENTS 269 Marius Doh CIE
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ACKNOWLEDGMENTS 317 Bruno Paredes L
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