GATED IN OR BLOCKED OUT

by Stanislava Ciurinskiene

Looking plain, apartment blocks still beat American-style gated communities as Bulgarians' first choice for housing

According to a saying very popular among Bulgarians in the past, "In his life, a man must do three things: raise a child, plant a tree and build a house for his family." Nowadays this way of thinking no longer reflects the urban lifestyle – the current ratio of houses to apartments in most cities is approximately 20:80. In Sofia it has reached 10:90.

Prefab concrete apartment blocks appeared in the 1950s and 1960s as a cheap and efficient way to accommodate the large number of people who flocked to cities during Bulgaria's rapid urbanisation. The process peaked in the 1980s, when houses had become a luxury, a forgotten symbol of the "bourgeois past." In these years this type of housing development provided an unattractive but inexpensive way to accommodate hundreds or even thousands of people under one roof. They had two advantages that trumped factors like comfort and aesthetics – they were cheap to build and didn't take up much space.

Blocks of flats of prefab concrete are typical not only for Bulgaria but for most of Eastern Europe. Yet many former Communist countries-turned-EU-members have "rediscovered" houses. For a number of reasons, in Bulgaria apartment blocks are still the main form of residential investment – as a whole, developers choose to build flats rather than houses. Urban buyers, especially those under 60, also prefer apartments. Quality single-family homes are often in short supply or suffer from severe infrastructure limitations. The lack of building space in cities means most houses are way out in the suburban fringe – which translates into long commutes, bad roads and power outages due to overloaded electrical substations.

Is the shortage of houses due to lack of demand or are buyers uninterested in houses because developers are reluctant to risk investing in, promoting and selling them? The answer may be that houses are expensive for both developers and buyers. If developers are faced with the choice of investing in a house development or in blocks of flats, they normally go for the second option, as it promises higher profits. A 2,000 sq m, or 21,528 sq ft, plot can hold four small houses or a block of flats with at least 15 apartments. Simple calculation shows that if they are sold at the same price, the houses bring far smaller profits.

Developers are forced to either choose another residential subsegment or build luxury gated community houses for exclusive buyers. However, Bulgarian buyers who can afford to spend 300,000 or 400,000 euros or more on a home would rather have a dream house tailored to their wishes than a cookie-cutter house in a gated community.

Nevertheless, the media has spotted a new trend – Bulgaria's urban middle class appears to have developed a taste for single-family homes in gated communities. According to real estate publications, more than 400,000 young professionals are queuing up to purchase such houses. In Sofia's southern areas, such as Boyana, Bankya, Dragalevtsi and Simeonovo, more than 20 small gated villages and another 20 similar communities are in the pipeline. The usual format for a suburban residential development includes 10 to 50 individual homes ranging from 150 to 500 sq m, or 1,615 to 5,382 sq ft, on plots sized from 300 to 800 sq m, or 3,229 to 8,611 sq ft. The houses are either identical or come in a few different layouts. Off-plan prices range from 150,000 to 500,000 euros or more for exclusive properties.

The advantages of living in a gated community are seen in controlled access and security, various services, sufficient parking space, kindergartens, shops, spa centres and neighbours who share the same lifestyle. Competition pushes developers to be inventive, and mini golf courses and artificial lakes are just some of the perks they add to lure buyers.

Prices for houses outside a residential community are similar to or lower than those for apartments in the city, while a house in a gated community is about 15 to 30 percent more expensive per sq m than an apartment in a good
neighbourhood. Prices vary from 600 to 1,000 euros per sq m in smaller cities and from 1,500 to 2,500 euros per sq m in Sofia – not including the additional price for the yard. Brokers and developers admit that not many Bulgarians can afford such homes and until recently the clients were chiefly foreigners. Almost without exception all such developments are located in distant suburbs, while economic and social life in Bulgarian cities is concentrated in the central areas. This means a commute can take up to an hour and a half. Also, the houses in a complex are not usually built simultaneously but a few at a time, and the first buyers are forced to live on a construction site instead of the peaceful haven they were promised.

Developers do not find it easy, either. Housing communities are normally built on plots outside the general city infrastructure, so before starting actual construction companies must supply electricity and water and ensure that roads and communications are in place. The problem is less with infrastructure investments than with bureaucracy – it may take a whole year to obtain all the necessary permits. Within this period, building costs may, and often do, jump by up to 40 percent. The buyers end up paying the additional expenses that result from project delays, but the growing building costs inevitably bring in smaller profits.

The main reason behind the sudden media popularity of gated community houses is that the shortage of in-town building space has made construction companies redirect their attention to more distant suburban areas that used to be "villa zones." However, rules are strict outside city limits – building height cannot exceed 7.5 to 11 m, or 25 to 36 ft, so developers' only option is to build houses.

As most Bulgarians already know, living in a block of flats has its disadvantages, too. Whether old or new, construction quality may be a problem, to say nothing of the noise neighbours make or the smell of their lunch. However, for most Bulgarians price is still the most important factor when choosing the roof over their heads. So like it or not, blocks of flats are here to stay.

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