‘Ziemia jeść nie woła!’ – behavioural and institutional factors affecting delays in land development. The GZM Metropolis in Poland

Underutilised land produces negative externalities in cities. The literature suggests several reasons why land remains vacant. The real option literature explains this phenomenon by the value of the option to wait with development. As this stream of literature has already examined market and general institutional factors affecting the timing of land development, the behavioural reasons have not yet been fully uncovered. Especially in the institutional
framework of post-transition countries, with the peculiar remnants of formal and informal institutions from the previous system, this topic gains additional interest.
I use a mixed methods approach, building on the quantitative results of Reyman and Maier (2023), which show that investors typically delay land development in The Metropolitan Union of Silesia (GZM MA) by an average of 3.4 years. Land with a perpetual usufruct title is developed more slowly (relative to ownership), as are land with zoning (relative to those without), and land bought or sold by a government agency (relative to individuals and commercial investors).
In this research, I report on a grounded theory research methodology to elicit the values, attitudes, and behaviours of investors and city officials that guide their
decisions about the timing of land development. In-depth, semi-structured interviews with 12 investors and city officials allowed respondents to explore their values and learn about the informal rules that frame their environment.
The analysis of the coded transcripts suggests that the institutional background of the GZM MA terrain (dozens of competing municipalities, post-industrial land) influences the behaviour of market participants, and remnants of institutions from the previous system add uncertainty to the land development process. Fierce competition between cities affects the pro-investor attitude of city officials. Many institutional causes of delays in land development, such as poorly
written procedures, lack of procedures and bureaucracy, mean that much is discretionary and land development is less predictable. In addition, officials act conservatively for fear of being accused of negligence, which could be a feedback loop of too much legislation and too few proper procedures. As a consequence of the institutional reasons, there is a tacit acceptance of delays in land development, with investors exploiting the legal loopholes. This creates a
feedback loop with an established system (lock-in).
As many of the reasons for delays in land development stem from 'fuzzy' institutions, the results of this research should be applicable in the other post-transition countries.