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Lengthening administrative procedures and Poland’s planning reform are increasingly weighing on the volume and profitability of multifamily residential developments across the country

Poland’s investment land market continues to be dominated by residential projects. Outside Warsaw, developers are primarily targeting Cracow, Wroclaw and Gdansk, followed by Poznan and Lodz. The highest land prices are seen in central, well-connected locations in Cracow and Gdansk. However, land value is now determined not only by location and development potential, but increasingly by how efficiently the entire development process can be carried out.

Lengthening administrative procedures and the spatial planning reform mean that the time required to prepare a project has become one of the key factors determining both risk and profitability. In Poland’s largest regional cities, developers currently have to wait an average of eight to fourteen months for a building permit for a multifamily residential project. In Warsaw, the process takes around a year and a half.

Analysis by Walter Herz, based on data from the General Office of Building Control, highlights the scale of the issue. Investors face the longest wait for building permits in Poznan - over 14 months. In Gdynia, the process takes over 10 months. The average waiting time for administrative decisions is 267 days in Cracow, 256 days in Wroclaw, 280 days in Lodz and 231 days in Gdansk.

A steady lengthening of the process over the last decade

As recently as 2016, the average time required to obtain a building permit for multifamily residential projects in the analyzed cities ranged from two to three and a half months. In the years that followed, the administrative process steadily grew longer, with a particularly marked deterioration in 2025.

This was not driven by an increase in the number of proceedings. In most of the analyzed cities, the number of building permits issued actually fell between 2024 and 2025. In Gdansk, for example, the number dropped from 70 to 44 decisions, while in Cracow it fell from 107 to 91. Poznan and Gdynia were the only cities to record an increase.

Formally, regulations provide for one month to issue a building permit in standard cases and two months for particularly complex applications. For large-scale residential developments, however, the actual process is significantly longer. Before a decision can be issued, developers may need to provide

additional documentation and obtain environmental, road and infrastructure approvals, involve neighboring parties and, in some cases, deal with suspended proceedings and appeals.

For investors, every additional month means capital tied up for longer, higher financing costs and greater market risk. Assumptions about demand, prices or construction costs made when acquiring the land may look entirely different by the time the project is ready to launch sales.

The market is rewarding planning certainty

The second source of uncertainty is Poland’s spatial planning reform. More than 60 per cent of municipalities in Poland have yet to adopt general plans. Existing local zoning plans (MPZPs) partly mitigate the problem, but they cover only around one-third of the country’s territory.

In cities such as Cracow, Gdansk and Lodz, the absence of general plans is adding to investment uncertainty. Existing local zoning plans, building permits and previously issued planning decisions (WZ) remain valid. However, without general plans in place, new projects cannot be initiated on land that is not covered by a local zoning plan. From September 1st, municipalities without an adopted general plan will no longer be able to issue WZ decisions for new applications, amend existing local zoning plans or process new Integrated Investment Plans (ZIPs).

As a result, the market is increasingly rewarding planning certainty. The most sought-after plots are those that allow developers to move quickly to the next stages of the investment process — land with a clear planning status, a straightforward path to obtaining a building permit and, ideally, an existing building permit already in place.

This is changing the way land is valued. Alongside location, price and development potential, the ability to bring a project to fruition quickly is becoming equally important — and, in the current environment, potentially even more significant. Land valuation is no longer based solely on the property itself, but increasingly on the investment scenario that comes with it.

Administrative delays are constraining housing supply

Developers acknowledge that the time between acquiring a plot of land and starting construction has increased significantly, while the construction phase itself has remained largely unchanged for many years. The increasingly challenging part of the process is the project preparation phase before the contractor can enter the site, involving administrative decisions, documentation, approvals and adapting the project to planning and infrastructure requirements.

Developers therefore have to make business decisions several years in advance and anticipate demand that may not materialize until much later. At the same time, capital remains tied up in land for longer, financing costs continue to rise, and with them comes greater exposure to changes in material prices, construction costs, regulations and overall market conditions.

As a result, developers are becoming more selective when acquiring land. Projects with less predictable timelines are being postponed or abandoned altogether. This, in turn, is limiting the future supply of housing.

A shortage of development-ready land, planning uncertainty, lengthy administrative procedures and a declining number of building permits are creating an increasingly significant barrier to expanding housing supply. Growing constraints are also generating additional costs. The greater the administrative risk, the higher the cost of both land and, ultimately, housing.

Integrated Investment Plans offer an opportunity, but at a cost

Under the new planning system, Integrated Investment Plans (ZIPs) are expected to play a greater role, replacing the Special Housing Act, commonly known as the lex developer. The previous framework failed to deliver the expected breakthrough and, for many investors, involved lengthy procedures, numerous consultations and significant commitments.

ZIPs could prove to be a more effective tool for large and complex projects, particularly on land not covered by an up-to-date local zoning plan. Their advantages include a more collaborative approach to working with municipalities, the ability to define an investor’s obligations at an earlier stage and greater predictability of costs. The procedure should also be shorter.

At present, however, the use of ZIPs remains limited. The effective application of this tool is only possible once general plans have been adopted, and most municipalities in Poland have yet to do so. The complexity of the procedure and the need to fulfil obligations arising from the urban planning agreement are additional barriers. Under these agreements, investors are required to contribute to the cost of public infrastructure.

The ZIP procedure could nevertheless unlock some of the development potential of land in Poland’s largest cities. Its effectiveness will depend on local authorities’ willingness to cooperate and engage in urban planning dialogue with investors. For large, strategic projects, however, ZIPs could become an attractive alternative to the traditional planning route.

Investors are primarily looking for predictability

As investors point out, the barrier to bringing new projects to market is not simply the number of documents required to obtain building permits, but the unpredictability of the administrative process as a whole. Developers are calling for greater digitalization of procedures, fewer required consultations and greater consistency in administrative practice.

Standardizing the documentation required to obtain a building permit is particularly important. At present, the scope of required documents and additional approvals varies depending on the city and, in some cases, even the district. Beyond the requirements set out in building regulations, investors may also need to obtain conservation opinions, approvals concerning site development, location decisions and additional technical studies.

There is also a need to reduce the number of institutions involved in reviewing development projects and establish a more consistent approach to interpreting regulations. Nationwide guidelines prepared by the General Office of Building Control (GUNB) or other relevant authorities could help reduce differences in administrative practice between individual offices. Environmental procedures also require streamlining.

Deregulation, digitalization and a ‘one-stop shop’ model could significantly shorten the time required to prepare projects. Equally important is ensuring predictable timelines, clear rules for cooperation and limiting administrative discretion.

The stakes are high for the residential market. Poland remains one of the largest residential markets in the region, but limited land availability, combined with the lengthy process of preparing projects, is reducing its attractiveness to global investors.

Plots in good locations with a clear planning status will continue to attract buyers. However, this scarcity comes at a price. If the development process remains lengthy and unpredictable, the market will increasingly favor land that is ready for development, driving up its value. As a result, the cost of administrative risk will feed through into both land and housing prices.