Developers Express Discontent: Deputy Mayor's Response

The situation is escalating. According to cadastre data, there has been a decline of more than 25% in apartment sales during the last quarter. This was stated today, February 20, at the ongoing hearings of the Economic Affairs Standing Committee of the National Assembly by Tigran Harutyunyan, a member of the Board of the Armenian Association of Developers.

The developer first drew attention to the conditions proposed by public service companies (gas, electricity, water). “If you start a new urban development project in Yerevan and, for example, your project is a bit large, and you apply for water technical conditions, today you are sent to fetch water from Hrazdan. This means bringing water approximately 60-70 km along a national significance road, through thousands of plots of land. In reality, this is not a manageable problem for any developer. Next, the tariff for connection to the electricity network is being increased fivefold. The next issue is the gas connection. We have a problem that the capacities of the gas pipeline, as stated by Gazprom, are insufficient, and new gas pipelines need to be constructed, which are being built from the outskirts of Yerevan. If you have development projects in the city center or Arabkir, the gas needs to be brought from approximately Abovyan or from the area adjacent to Jrvej,” said Harutyunyan.

According to him, in the current situation, apartment prices have increased; he noted for comparison that in the neighboring capital of Georgia, apartments are approximately 60% cheaper than in Yerevan.

It is worth noting that the Yerevan Municipality adopted decisions regarding the rates of local taxes and fees at the meeting on December 26, 2023. Now, developers are forced to pay several times more money to obtain construction permits instead of the previous 700,000 drams.

Additionally, Yerevan's Deputy Mayor Levon Hovhannisyan assures that they have no intention of obstructing the construction business. Hovhannisyan informed that several types of fees will not be applied based on discussions with developers. In March, discussions will continue with developers at the Yerevan city hall.

“We have conducted very serious analysis. We no longer agree that a developer operating under the urban planning regulations in any part of the city can come and pay 700,000 drams to the city of Yerevan, without building a kindergarten, without upgrading the sewage system, thereby creating an additional burden on the environment, simply to gain excessive profit, sell apartments, and move on to the next project. This is not how it works. We were spending much more than those 700,000 drams following every developer,” said Hovhannisyan.