On June 9 2016 the government concluded a new legislative package on planning with the Social Democrats, the Danish People's Party and the Conservative Party, entitled "A Denmark in better balance – Improved framework for municipalities, citizens and businesses across the country".
The agreement includes:
- new planning opportunities in coastal areas, together with continued conservation and increased flexibility in coastline protection;
- new planning opportunities in rural areas;
- improved planning opportunities for retail outlets;
- a more flexible framework for investment;
- housing and urban development projects; and
- other initiatives regarding aviation biofuel, villages, tourism and manufacturing.
The agreement will be converted into a bill to be put before Parliament in October 2016 with the aim of entering into force on January 1 2017. The main points that have attracted attention from the general public and private business are the rules on:
- planning opportunities in coastal areas; and
- improved planning opportunities for retailers.
The rules on planning in coastal areas address natural protection concerns and aim to keep the Danish coastline free from building development. However, the agreement has been criticised for its failure to relax Denmark's rigid planning rules for retail outlets.
The new legislative package aims to provide:
- improved development opportunities;
- continued protection of coastal areas; and
- an improved framework for ensuring the development of natural areas.
Coastal proximity zones
Under the new legislative package, coastal proximity zones stretch approximately three kilometres inland. They incorporate rural areas and rural housing, but not urban areas. Special rules for local planning apply in coastal proximity zones and residential housing zones are forbidden. Public access to the seashore will be safeguarded and extended.
Further, holiday and leisure facilities should be located in existing communities or in major holiday and leisure developments. Planning permission for new urban areas can be approved only if there is a special planning or functional justification.
Under the legislative package on planning, municipalities will be able to:
- identify parts of coastal areas with potential for urban development; and
- grant permission to establish businesses in those areas.
Planning permission for development areas will be available from 2017 and the process will be carried out through a national directive issued by the business and development minister on the basis of proposals from each municipality. A municipality's application must be based on a concrete and systematic assessment of coastal landscapes.
Development areas will be located inland rather than on the coast, but the development of land close to the coast (eg, in cities) may also be allowed.
As in other rural areas, empty buildings in development areas may be used for:
- craft and industrial businesses;
- small shops;
- liberal corporate, association and leisure purposes; or
- housing without a rural zone permit.
Relocation of coastal housing
To foster tourism, the agreement provides for new rural housing zones of up to 6,000 cottages if municipalities reverse planning permission of rural housing zones with at least 5,000 cottages in coastal areas.
New rural housing zones in coastal areas will need approval from the business and development minister following a national directive based on applications from municipalities. The first round of applications will be carried out in 2017. Municipalities can also apply to convert rural housing zones into urban housing zones.
The parties to the new legislative package want to give municipalities greater flexibility regarding planning permission for retail outlets based on local needs and conditions. The agreement constitutes a slight adjustment of the existing rules rather than a major change in that regard.
All cities, regardless of size, will have the opportunity to provide planning permission for retail outlets without size restrictions if they are desired locally. Under the Planning Act, new retail outlets over 2,000 square metres in size can be built only in towns with more than 40,000 inhabitants. This restriction can mean that Danish consumers pay unnecessarily high prices and have access to a more limited range of products. Under the planning agreement, new relief areas may be built (ie, shopping areas outside city centres).
Guidance on the establishment of e-commerce showrooms located outside retail areas will also be introduced. The trade in books, electronic goods, clothing and furniture is rapidly evolving and increasingly takes place through e-commerce, with approximately 14% to 16% of these goods being sold online. E-commerce stores are not subject to the same restrictions as physical stores regarding size and location. This gives e-commerce stores a competitive advantage over physical stores, which are also under pressure from foreign e-commerce stores.
The Planning Act limits the size of grocery stores, which can be detrimental in terms of:
- the product range they offer;
- their operation;
- their ability to compete with cheaper goods; and
- other benefits to consumers.
The planning rules have been made more flexible in this regard, so that municipalities can approve planning permission for larger grocery stores if desired locally.
Under the revised Planning Act, the size limit for grocery stores and community centres will now be 1,200 square metres compared to 1,000 square metres previously.
The size limit for grocery stores in city centres and town centres will now be 5,000 square metres compared to 3,500 square metres under the existing Planning Act. In relief areas, the limit will be 3,900 square metres compared to the previous limit of 3,500 square metres. There will also be scope for planning permission to be granted for new relief areas.
Supermarkets are typically between 10,000 and 25,000 square metres in size, but the agreement does not provide for changes to planning rules for supermarkets.
Municipalities will be able to plan the development of the grocery trade within this framework, taking into account the size of the customer base and other local conditions.
The new legislative package on planning is considered to be a victory for the small and cooperative grocery sector at the cost of supermarket chains. The principle that retail outlets should be located in city centres – which has guided Danish planning law for decades – remains unchanged and the planning restrictions on supermarkets will not be lifted.
For further information on this topic please contact Søren Stenderup Jensen at Plesner by telephone (+45 33 12 11 33) or email (email@example.com). The Plesner website can be accessed at www.plesner.com.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.