**3. Literature Review**

Local land use plans have different scope and consequences in different countries. Therefore, they should be compared with grea<sup>t</sup> caution. Despite even similar legal regulations, the planning practice may differ [20–23]. However, common features and consequences can be distinguished. They mainly concern


The article focuses primarily on the last two issues. However, their interdependence should be emphasized. The limited ability to control spatial development in a given system entails several negative consequences associated with governance failure [26–30]. It also significantly influences the real possibilities of limitations in land development [31,32] and the relationship between local plans and real estate value. In the latter context, many studies can be distinguished, concerning, among other things, the impact of planning acts on the supply and prices of housing [14,15,33,34] and the impact of protection of urban greenery in the spatial plans on the residential real estate value [35–37]. There are publications that broaden the discussion about the role of local plans in shaping the value of real estate. Nestico et al. [13] draw attention to the link between the process of housing development, and planned environmental and socio-economic conditions. Rebelo [9], considering possible institutional changes, emphasizes the importance of social determinants when considering the economic consequences of spatial planning. Cho et al. [12] show that the impact of spatial planning on the value of real estate also depends on the level of development of civil society in a given area.

In the literature on the subject, various classifications of spatial managemen<sup>t</sup> systems have been made. By limiting ourselves to European countries' comparisons, one can cite classifications distinguishing regional economy planning, integrated planning, land use planning, and urban planning [38]. This gave rise to further classifications, in which the criteria considered included, among others, linking the development with real opportunities existing in the given area (i.e., access to technical infrastructure), the arbitrariness of local authorities in terms of shaping space, as well as the degree of linking planning processes with legal regulations [39–42]. Applying individual regulations is influenced by planning practice that varies in individual countries, resulting from social, cultural, or economic conditions. From the perspective analyzed in this article, the key seems to be the classification of spatial managemen<sup>t</sup> systems into systems based on local plans (e.g., Spain, partly Italy, France, and Belgium) and systems based on development planning (Great Britain) [43]. Thus, it can be assumed that both the overall concept of the spatial managemen<sup>t</sup> system and individual solutions are important. From the perspective of this article, important is the classification made by R. Alterman [31]. It distinguishes groups of countries from the perspective of understanding of the property rights in the spatial managemen<sup>t</sup> system and the scope of compensation rights. The group with minimum compensation rights includes the United Kingdom and France, and the group with extensive compensation rights includes Germany and Poland. As indicated above, individual countries differ in many respects (legal regulations, planning practice, and degree of integration of development planning with spatial policy).

However, the functions of local development plans can be compared. In the United Kingdom, planning acts define the spatial development strategy, which the public administration interprets when issuing building permits. Thus, British local plans are a combination of Polish "studies of land use conditions and directions" (which will be introduced further on) and local zoning plans. In addition to the basic strategy, they specify land use and the areas whose development is crucial. They also contain guidelines for assessment when issuing building permits [44,45]. In France, local urbanistic plans are acts defining in detail the local development principles. They define the general directions of local policies related to spatial policy and define specific actions (important from an environmental perspective). They also define the detailed conditions for the development of individual areas [46,47]. In Germany, there is a land use plan and a development plan on the local level. The former, which is drawn up for the entire municipality, is a preparatory building plan that defines

the general use of land. The development plans are directly binding on the property owners in terms of development parameters and land development [45,48]. Thus, the local plans' functions are understood in different ways, and, in the selected countries, the individual plans contain a "strategic" part and a part with direct guidelines. Therefore, the scope of limitations of property owners' rights and the financial (compensation) consequences of adopting plans can be considered in different variants. Moreover, for this reason, solutions of individual countries related to the economic consequences of spatial planning should be of particular interest for the researchers, as well as (irrespective of the above) cases of countries shall be investigated where extensive compensation rights are provided for.

It is worth to introduce a few individual solutions concerning spatial planning's economic consequences in different countries. In some European countries, model solutions relating to the discussed sphere have been developed. First, the concept of Value Capturing can be invoked. According to it, public entities' planning decisions transfer the costs of public infrastructure and social housing to private entities, whose property value has increased [49]. The above solutions are justified, among others, by the reasons related to the need to reimburse costs incurred by public entities, taking over some negative costs by private entities creating them, as well as the need to mitigate the impact of new investments on the environment [50–53]. The effectiveness of this process depends on several variables. From the investors' perspective, the key is the certainty of specific solutions and public authorities' flexibility to adapt to their concepts (in this case, the authorities' flexibility should not be confused with opportunism). In this perspective, there may be greater investor uncertainty in Great Britain than, for example, in Spain. This uncertainty may determine the failure of specific investments [43]. From the perspective of considering the consequences of reducing real estate value, the literature indicates nonfinancial compensation options [54]. One of them may be the TDR principle adopted in the United States and disseminated in Europe (e.g., in Italy), including the "transfer of development rights", i.e., a specific "transfer" of the possibility of a certain development to another area [55,56]. One can also cite the concept of spatial concentration of development rights related to TDR (Klaus 2020). In individual European countries, the scope of financial compensation depends on understanding property rights and the degree of possibility of limiting it. For example, in Great Britain, local plans may introduce restrictions without any compensation [44,55]. However, in some countries, there are large irregularities, the most famous of which are mismanagement and simple fraud in setting up the so-called land banks [57], i.e., in the land banking system developed in the last half-century and provided for in the planning and investment procedure [58]. It is worth pointing out that these institutions, essentially intended to counteract the fragmentation of agricultural land, were gradually also directed, e.g., in the Netherlands and Germany, towards implementing public goals [59].

It has been indicated above that apart from individual solutions concerning the economic consequences of spatial planning in European countries, it is worth noting the case of a country classified in the literature as providing for extensive compensation rights in the spatial managemen<sup>t</sup> system. This country is Poland. It should be pointed out that in post-socialist countries undergoing political transformation after 1989, a common problem is a too liberal approach to the role of property owners in the spatial managemen<sup>t</sup> system. It results, to a significant extent, from a kind of rebound after the period of centrally controlled economy, which included excessive control of the private property (including numerous cases of takeovers by the state). As early as at the beginning of the first decade of the transformation (1990s), there were still voices that the flawed real estate market system inherited from communism, including the disordered ownership structure, will be a serious burden for a smooth transition to a free market system [60], including society's understanding of the rational principles governing the relationship between private property and the common good. As a result, many countries in this bloc are still, after three decades of transformation, diagnosed with problems of uncontrolled development, misunderstanding what the public interest is, and spatial chaos [61–63].

The spatial managemen<sup>t</sup> system of Poland is the subject of numerous critical analyses [64–67]. In the opinion of the vast majority of the representatives of the literature on the subject, it does not fulfill its role by not ensuring sufficient protection of the spatial order, nor by stopping the negative spatial trends (including urban sprawl, uncontrolled development, increasing costs of spatial chaos in the settlement, environmental, or transport dimensions [16]). The key tools of spatial policy exist at the commune (local) level. "Studies of land use conditions and directions" (pol. Studium) are documents of directional and strategic nature which are mandatory in every commune; however, they do not directly bind property owners and investors. They may be described as specific equivalents of the former "structure plans" in Great Britain. On the contrary, local spatial development plans (pol. Plan miejscowy), which are equivalent to zoning plans, constitute local law acts but are not obligatory—the commune authorities may adopt them at their discretion (consequently, most of the country is not covered by these plans—the coverage of the territory of Poland with binding local plans in Poland at the end of 2019, which was only 31.2%). Development in areas without adopted local plans is carried out based on administrative proceedings related to the issuance of an individual decision on development conditions [68]. A huge number of decisions issued leads to the aggravation of negative phenomena related to uncontrolled development.

The financial consequences of adopting a local spatial development plan (increasing and decreasing real estate value) have been included in the Act on spatial planning and development from the 27 March 2003. According to Art. 36–37 of the Polish Act, if the local plan restricts the existing possibilities of developing the property in a way that the current development cannot be continued, the commune, by adopting this plan, is obliged to pay the owner of the property compensation equal to the damage suffered. As soon as the property's value decreases and the owner disposes of it within five years of the plan's entry into force or its amendment and has not previously benefited from compensation, he/she has the right to demand compensation equal to the loss value. On the other hand, in a situation where the local plan extends the possibilities of real estate development relating to the previous possibilities and causes an increase in its value, there are no adequate consequences [69]. If the owner of such real estate sells it equivalently within five years from the local plan's effective date, he/she will pay a special fee, the so-called planning rent (a zoning-change fee). Depending on the communal authorities' discretion, it may amount up to 30% of the increase in the property's value (the rate should be included in the plan). It is a specific value capturing mechanism.

#### **4. Financial Effects of Local Plans in Poland**

### *4.1. Forecasted Revenues*

According to the data obtained from 1757 communes (75% of those having valid local plans), the state shown according to the forecasts prepared in the years 2003–2019 was as follows. The projected revenues resulting from local plans' adoption were shown for PLN 69.4 billion (PLN 1 billion ≈ EUR 240 million in 2019). The most important share were the proceeds from "other" category (PLN 26.2 billion) and from the increase in property tax (PLN 24.7 billion), followed by the planning fee (PLN 16.3 billion) (Table 2; Figure 1). It should be emphasized that the vast majority of forecasts do not have a specific time horizon: neither minimum nor maximum.

The highest revenues were forecasted in large urban centers, including voivodeship capitals (type A)—PLN 22.3 billion, and in neighboring communes belonging to Functional Urban Areas of voivodeship cities—PLN 14.7 billion. In cities with poviat (county) capital status and generally sub-regional cities (type C), total revenues were expected to amount to PLN 9.1 billion. For the remaining types of communes, a significantly lower sum of incomes was forecasted, including the lowest one in the group of extensively developed communes, which have a high share of forests and protected areas (type J)—PLN 1.5 billion, in intensively agricultural communes (type H)—2.0 billion PLN, and in communes related to the function of communication nodes (type F)—PLN 2.4 billion.


**Table 2.** Basic quantitative information on the forecasted and realized incomes and expenditures related to adopting local spatial development plans in 10 types of communes, for the year 2019.

\* abbreviations of types of communes explained in Table 1. Source: based on unpublished data of the Ministry of Development and Statistical Office of Poland.

**Figure 1.** Structure of forecasted and realized revenues and expenditures of communes as a result of local plans enacted, for the year 2019. Source: based on unpublished data of the Ministry of Development and Statistical Office of Poland.

The highest projected revenues were found in Warsaw (PLN 4.9 billion). It was about 7% of the total for the whole country, which is more or less similar to the population potential of the 1757 communes studied. Due to land prices in the capital, this value seems relatively low. Moreover, high income was expected in Szczecin (PLN 3.9 billion), and over PLN 1 billion in Sosnowiec, Cracow, Gdynia, Rzeszów, Gliwice, and Pozna ´n. The high concentration of quotas in a relatively small number of communes draws attention. Half of the local binding plans' forecasted revenues were concentrated in only 3.6% of the communes that reported any amounts (64 out of 1757 local governmen<sup>t</sup> units).

Despite the obvious differentiation of forecast impacts between large urban centers and peripheral communes, such drastic disproportionality may prove inconsistency and different methodological approaches in forecasting. It is possible both to overestimate the expected revenues and to lower them. Another probable cause of the observed disproportions is inconsistently conducted, ineffective financial managemen<sup>t</sup> in some communes. In any case, it can be stated that there is some irrationality in the spatial management.
