Rules for Urban Development: Approach That Has Taken Hold
The development of Czech cities long relied on unwritten agreements that gave no certainty. Frank Bold helped introduce new rules that are predictable.
From unwritten agreements to public rules
New construction brings cities costs for infrastructure, schools and public space. Without a clear framework, every project was negotiated from scratch. Cities had no basis for their expectations, and investors had no certainty about what lay ahead.
The answer is the Principles of Investor Cooperation. A city adopts and publishes them in advance, so every investor knows the conditions for contribution from the moment they consider an acquisition. Contributions take two forms: a financial payment, or an in-kind contribution – such as building a pavement, a park or a children’s playground.
Frank Bold has been involved in this approach from its very beginnings in the Czech Republic. We help cities develop the Principles and help investors navigate them, because rules that work must hold up on both sides of the table.
A win-win that can be quantified
The Principles are now used by over a hundred Czech municipalities – among those with more than 5,000 inhabitants, that is one in four. The total value of contributions contracted on their basis runs into billions of Czech crowns, equivalent to hundreds of millions of euros across the country. The average time from adopting the Principles to concluding the first planning agreement is 6 months.
Investor contributions account for just 1 to 2 % of the total costs of a construction project. For an investor, it is a line item that can be built into a financial model. For a city, it is a real source of funding for public space. And for residents, it means that a new district comes with pavements, a playground and a nursery school.
Clear conditions also reduce the risk of disputes and shorten the time a project spends waiting for a decision. Predictability is a value in itself.
Cities that have put the approach to the test
- Prague – the Investor Contribution Methodology produced 25 planning agreements worth EUR 256 million over four years, including EUR 56 million for the Žižkov Freight Yard site.
- Jihlava – the first statutory city in the Czech Republic to adopt the Principles; 21 agreements concluded to date.
- Liberec – the Principles apply across the entire city and reflect the costs generated by construction projects; 30 agreements concluded and 90 investment projects in progress.
- Mnichovo Hradiště – the Principles have been in place since 2020; 7 agreements concluded, with ongoing updates to the rules based on practical experience.
- Rokytnice nad Jizerou – 11 agreements concluded, with an emphasis on sustainable development and housing for permanent residents.
The system also holds up for the largest-scale projects. Rožnov pod Radhoštěm is using planning agreements to prepare for onsemi’s EUR 1.76 billion investment in the expansion of its local plant.
Expertise at the intersection of law, development and the public interest
At Frank Bold, we specialise in structuring the relationship between investors and local governments – from developing Principles of Cooperation and negotiating specific planning agreements to putting them into practice. Our goal is an environment where the same rules, known in advance, apply to everyone. Cities gain partners for development, investors gain a clear brief and residents gain a place where life is good.