And should builders be supported?
Developers claim that the main reason for the significant rise in housing prices is the increase in construction costs due to the rising cost of materials and labor. Following monitoring, the Agency for the Protection and Development of Competition found numerous instances of unjustified price increases by developers. At the request of the antimonopoly authority, developers in several regions have reduced housing prices by 4-30%. However, developers believe that neither government-backed mortgages nor pension funds have exerted significant pressure on real estate prices. There is also a conflict of interest between developers and the local government – the issue of constructing social facilities, which are not very profitable for developers, is acute.
Lower the wall – higher the prices
In addition to rising material prices, builders blame the government for the sharp rise in the cost of housing per square meter, which is restricting dense high-rise development in the center of major cities.
"The authorities are literally forcing residential complex designs to be redesigned on the fly, reducing the number of floors." "However, the price per square meter in these residential complexes, designed for a larger number of apartments, will increase, as the developer will have to compensate for the costs by adding the price for the removed floors and apartments to their base price," explains Irina Manzhanova.
This concerns 19 residential complexes in Almaty at various stages of development, for which the developers received notifications from the Department of Urban Planning and Urban Studies (DUPiU) to revise previously approved and agreed-upon documents regarding a reduction in the number of floors to nine.
DUPiU told Kursiv that the developers were not sent demands, but only recommendations in connection with the upcoming regulatory changes (the draft of the new "Plan for the Implementation of Urban Planning Regulations for the Development of Functional Zones in Almaty" was posted in March on the portal of open regulatory legal acts).
"The debate over building height limits in Almaty arose as a result of urban planning mistakes made over several years," says Nurlan Kamitov, director and lead architect of INK Architects. "Now everything is moving toward the nine-story limit becoming the new approved norm."
But just last year, the city administration introduced new building density regulations on these same streets (between Abay and Al-Farabi). And then, many developers also had to revise their projects.
"No sooner had one amendment been introduced than another came along. Developing a project is a labor-intensive and lengthy process. When it changes, not only the architectural sketches but also the structural design and working documentation are altered. Preparing new documentation takes seven to eight months. This turbulence does not inspire optimism. Any changes and innovations have a very painful impact on the developer," Kamitov emphasizes.
