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Will the Tbilisi Mayor’s Decision End the Khrushchovka Era?

Tbilisi Mayor Kakha Kaladze has announced plans to replace so-called “Khrushchovka” residential buildings. Kaladze made a statement during a government meeting several days ago.

The current plan calls for the full replacement of failing buildings in Quarters 6 and 8 of Verketili Third Massif, as well as moving residents from less damaged buildings in Verketili Massif and its Upper Plateau.

City Hall will announce the contracts for developing a residential complex on the 30,205 square meter site in Verketili Third Massif, Kaladze said.

The winning company will implement its project under the regulatory plan approved by the Tbilisi Council, on the condition of transferring certain residential spaces to the municipality, he added.

“I would like to talk about one of our most important projects. I have frequently mentioned it in my pre-election campaign: many people were skeptical and did not believe in the feasibility of this project. I refer to the replacement of Khrushchokva residential buildings. Having assumed duty and started work at City Hall, we launched the program and began implementing the project.”

“Our offices have worked hard, and I would like to thank you, because today we present the first project—City Hall is announcing interest in developing a residential complex on the 30,205 square meter site in Varketili Third Massif, and we invite proposals from the private sector,” the mayor said.

At the first stage, 170 families will receive new apartments. Along with this information, the Tbilisi Mayor urged the private sector to join in project development planning and stressed the importance of the business sector’s involvement. Without the private sector, the Khrushchovka issue will not be resolved, he said.

What is the private sector’s position? What preferences will authorities offer to the private sector in exchange for engagement in project implementation? Does the project fit into the new masterplan? In general, is it true that the Khrushchovka Era will be over in Tbilisi?

Irakli Rostomashvili, head of the Developers Association, focused on several important factors. Currently, about 23,000 apartments are built in Tbilisi every year, and about a half part of them are located in new residential buildings (12,000 apartments).

As for Khrushchovkas, there are 512 Khrushchovka residential buildings in Tbilisi and 30 families live in each of them. This signifies a total of 15,360 families live in Khrushchovka apartments in Tbilisi. Therefore, Irakli Rostomashvili supposes that the Tbilisi economy should be improved to thoroughly implement the Khrushchovka replacement project.

“If we decide to launch this project and jointly implement it, in the current economy of Tbilisi, in the next four years, we will have to build 60,000 apartments a year, four times higher than the norm. The problem will remain unresolved, even if the project implementation deadlines are extended. Conditionally, where new buildings replace the Khrushchovkas, we will need more public schools, police stations, recreational zones and so on. Who will tackle these issues? The business sector? The project cannot be addressed using only residential buildings. I think at this stage, many aspects are unclear, and this factor does not enable the private sector to be widely represented in the project,” Rostomashvili said.

Previously, only M2 had expressed interest in the Khrushchovkas project, and there are certain reasons for that, he said.

“The only company which showed interest in the project was M2. However, there are not many similar major companies on the market. M2 has many resources, including lots of money and a major commercial bank backing it. At this stage, our company cannot join the project implementation process, because many aspects are unclear and I suppose a major section of the private sector companies have the same problem,” Rostomashvili said.

As for the Tbilisi land use masterplan and its compliance with the Khrushchovkas project, City Institute Director Mamuka Salukvadze had the following position:

“In the case of the Khrushchovkas, it is possible to prepare a development regulation plan by the order of Tbilisi City Hall. In general, our position is that the masterplan cannot thwart project implementation. On the contrary, an individual approach is required. We should neither remove buildings nor build new ones chaotically. In reality, an inventory is required. That is, on a specific site a residential building may be dismantled, and the building may be rebuilt in other place,” Salukvadze said.

Andria Basilaia, head of the economic development service of Tbilisi City Hall, said that to raise the business sector’s interest, City Hall will transmit land plots to the private sector free of charge in exchange for engagement in the project implementation process. All other variants are under discussion. As for project implementation, Andria Basilaia assures that the Khrushchovka Era will end, but he could not give specific deadlines.

Basilaia said: “We believe this project will be implemented, but it cannot be launched and finished immediately. This is a long-term process. Therefore, I cannot name specific deadlines. As for the private sector’s involvement, for Varketili we will transmit a site to the competition winning company free of charge. The Samkharauli Forensics Bureau has valued this site at 6.9 million GEL. In exchange, the company must build adequate apartments in two years. Naturally, all Khrushchovka apartments cannot be replaced in the same manner. We will consider alternative plans. We plan to apply similar mechanisms at other locations, including in Saburtalo and Samgori in the near future, where there are unfit buildings.”

Besides free transmission of land to the private sector, Tbilisi City Hall has not prepared any alternative offer. The head of the municipal economic development service noted that the Varketili project results will inform future plans for similar projects.

“For example, in the eastern part of Berlin, Khrushchovkas were not removed, but renewed. There are many proposals for applying this method in Tbilisi too, but here the buildings are nearly destroyed and cannot be repaired. Therefore, we have limited options in the decision-making process and have to find new mechanisms. We expect the Varketili pilot project to bring certain results. Naturally, we cannot transmit lands in exchange for all Khrushchovkas. It is important that in this case an exception will be made for K2 coefficient, too. The coefficient is tightened and a stricter process will be continued in the future too, but in the case of social projects, we plan to set certain preferences for the private sector. All these efforts are to raise the business sector’s interest and we hope our efforts will bring real results,” Basilaia said.

As noted, there are 512 Khrushchovka residential buildings in Tbilisi. Many of them are located in the Vazha-Pshavela area, Third Massif and Dighomi, especially four to five floor low-ceiling apartments built in Tbilisi in the 1960s.

After the announcement of independence, almost all local governments in Georgia expressed interest in replacing the Khrushchovkas, but no real steps were taken. In 2014, the Tbilisi Council signed a cooperation memorandum with an investment holding in Saudi Arabia. The investor planned to build 15-floor residential buildings to replace Khrushchovkas. The project also called for office spaces and green zones. Initially, the project called for dismantling 800 buildings and investing 600 million USD from the USA, however, no real steps were taken.