The economic dangers stemming from skyscrapers

Thousands of apartments are in stock, thousands more in construction

In Tirana, land is already expensive and those who buy to build are turning to the skies. High-rise buildings up to 40 floors are being erected, and work did not stop even during the quarantine days imposed by the coronavirus outbreak. The biggest investments are being made in skyscrapers. But does the capital city need so much new space?

The mayor, Erion Veliaj, in an interview said that Tirana needs 7,000 new apartments a year, because 25-30 thousand new residents settle in Tirana every year. Most of the multi-story buildings are close to the center and are mainly for commercial, office or business purposes. New residents are mainly looking for low-rent apartments in the suburbs of Tirana. Multi-story buildings near the center do not provide this opportunity.

In December 2019, 2,500 flats were vacant and the government considered them to be used to house families affected by the November 26 earthquake.

During the first quarter of 2019, in Tirana, permits were issued for the construction of residential buildings, with an area of more than 479 thousand m2. The value of this area is estimated at around 141 million Euros. A large area for the construction of these buildings is located near the center of Tirana. The Book Building project, next to the Clock Tower, with an area of 40 thousand square meters; The Tirana’s Rock project, next to the Tirana Hotel, an 85-meter-high tower that will have 25 floors; Downtown Albania, at the former children’s recreational park “Shtatë Xhuxhat”, a tower with 40 multifunctional floors; The Eyes of Tirana project, which forms a triangle with the Bank of Albania and the National Historical Museum, with an area of 63,500 m², 26 floors high.

The concern raised by many market operators is that these constructions are being carried out without being based on concrete empirical studies and field observations, and most importantly, without relying on the needs and requirements of citizens seeking a residential apartment in Tirana. From what we understand from these new constructions, we have a city that is being pushed even more towards the center, when from the increase of population in Tirana we could very well have a city that expands more in the peripheral areas, and creates facilities in the circulation of people and motor vehicles.

Tirana has long lost the challenge with aesthetics, or rather destroyed the characteristic aesthetics of the city, to create a new one. This aesthetics that is being created is apparently not so much in the service of the citizens as compared to the first one. Now, Tirana is losing the challenge to meet the market needs. While the building of these skyscrapers does not affect the fulfillment of the need for housing for the mass population, what will this move bring in terms of urban and real estate evolution for Tirana.

We asked the well-known urban planner Besnik Aliaj:

“The tower is a typology and construction model like all the others. But it is usually used either to show development potential, or to maximize construction efficiency because it requires less land and accommodates more people, families, offices and services. Hence, financially it is more profitable for the public or private investor. The cost is that due to the density of residents and offices, it requires more infrastructure, services and public space, green space, parking space, sports facilities, etc.

Does the real estate market need so many constructions?

There are about 30,000 empty, uninhabited, unsold or unfinished apartments in Tirana. While more and more are being built and even more permits are being issued. Normally, when you have more apartments the market is saturated. The fact that we have empty apartments and at the same time we have a high number of homeless people is ironic.

Many market operators predict that there will be a collapse/halt to the real estate market in the last two or three years, driven by both falling demand and rising inflation in relation to purchasing power in the country. The demand for houses will be mainly supplied by the new residents who come to Tirana from the districts, who do not have the power to afford the new constructions with the prices of the market at present.

Regarding the risk ratio of construction stock growth and large amounts of money being poured into hardened concrete, and how that can affect the economic crisis, urban planner Aliaj says:

Although the rental market has recently developed, new construction prices are rising when 2/3 of the population is poor or unable to afford an apartment. Mortgages are expensive and difficult to access for this special category. Other categories with a certain economic status have been able to solve the housing problem privately. When our economy doesn’t produce, where does the money come from?! And for whom are these new apartments being built? This is unclear and testifies to the informal and pyramidal nature of the construction market!

What are the new constructions in process?

Book Building Tirana Project

Multifunctional building 4, 5, 11 and 21 floors, with 3 underground floors. Book Building between “28 Nëntori” street and “Abdi Toptani” street, with developing subject Techno-Alb sh.p.k.
The project envisages the construction of three buildings with heights of 3, 4, 10 and 20 floors, with an area of over 40 thousand square meters.

Tirana’s Rock

Next to the Tirana Hotel, the construction of the Tirana’s Rock Tower, 85 meters high, has been presented and will have 25 floors. The tower will serve as a shopping, business and residential center and will be built by Ana sh.p.k.

Forest Tower

On Kavaja Street, in Tirana, where the Natural Sciences Museum building was previously located, a 24-story tower, in the shape of a vertical forest will be built. The tower is being built under the new trend of the Italian architect Stefano Boeri, where the building from bottom to top will be dominated by a green exterior.

Downtown Albania

Downtown Albania, at the former children’s playground “Shtatë Xhuxhat”, a 40-story tower, with various functions divided by floors, where 2,912 m² of the first floors will serve as commercial spaces.
The subsequent floors will have an office space with an area of 21,840 m². On the upper floors, to provide the best views from the height of the tower, the flats are positioned with an area of about 26,208 m². The works are being carried out by one of the largest companies in the country, Kastrati, while just some time ago, Balfin, the largest group in the country, withdrew from the construction of the tower “Down Town Albania”.

Tirana Forever Green

After a period of time of suspension, the construction has started for the 20-story building near the center in front of the Orthodox Church, named Tirana Forever Green. The building, now an empty structure, occupies an area of more than 12,400 square meters and has 20 floors, of which four underground floors. The tower will have 4 levels of underground parking, commercial space, shops, 7 office levels, 8 residential levels and a super luxury hotel, with an investment of 25 million euros.

MET Building Tirana

MET Building Tirana is the project for a new commercial building with 12 floors, in the heart of Tirana. The MET Building Tirana project will fill the free spaces of the central area of Tirana, completing the process of urban redevelopment that is currently in progress. Within a complete block with prestigious buildings and functions, the design of the new building pays special attention to outdoor homes and exterior furnishing.

Lakeview Residences

The project includes a housing construction with an area of 129,000 square meters at Kosovars Street near the Zoo of Tirana. The project is being developed by Gener 2.

According to Monitor.al:

Only in the first quarter of 2019, the Municipality of Tirana has issued building permits for the construction of residential facilities with an area that exceeds 479 thousand square meters, with an approximate value of about 141 million euros.

*Featured photo in this article by Startnews

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