Brussels, 05/10/2012 (Agence Europe) - European Court of Justice Advocate-General Jan Mazak published an opinion on Thursday 4 October in combined cases C-197/11 and C-203/11 in which he states his view that in Belgium, the 27 March 2009 'Wonen in eigen streek' decree of the Flemish Region on land and buildings policy that links the transfer of property in certain Flemish municipalities to the condition that there exists a sufficient tie between the prospective buyer or tenant and the relevant municipality is an unjustified restriction of fundamental rights that contravenes EU law.
The 'Wonen in eigen streek - Habiter dans sa propre region' law allows 69 municipalities in Flanders where land prices are high and many people move into the municipality, to give first choice for the purchase or hire of land or property to people who can demonstrate close links with the municipality. The Belgian constitutional court has received many requests for the law to be annulled and asked the European Court of Justice whether the Flemish law was compatible with EU rules on state aid and public procurement.
The Advocate-General looked at the condition that there must exist a sufficient connection between the prospective buyer or tenant and the target municipality. The decree lays down three alternative criteria for fulfilling the condition as to the existence of a sufficient tie with the target municipality (being officially resident in the target municipality for at least six years before the transfer; doing business or other activities in the municipality concerned; and having a professional, family, social or economic connection as a result of a major and long-standing circumstance). It is for the provincial evaluation committee to assess whether the prospective buyer or tenant of the immovable property satisfies one or more of those criteria. He takes the view that that these conditions restrict fundamental freedoms because the criteria go beyond what is necessary to achieve the public interest argument made by the municipalities in question. The judge says that the objective could be reached using less binding measures, such as purchase incentives, price restrictions and other forms of aid.
On the question of compatibility with EU state aid rules of the decree's tax incentives and investment subsidies for lenders and builders, the Advocate General takes the view that it is for the referring court to determine whether those measures are liable to affect trade between member states and whether they satisfy the conditions set out in the case-law of the Court of Justice.
Another series of questions of the Constitutional Court relates to a social obligation which, within the meaning of the land and buildings decree, requires subdividers and developers to ensure a supply of social housing units. In that context, the Advocate General considers that it is necessary to determine the objective of the rules at issue and to determine whether that objective can be regarded as an overriding reason in the public interest. According to the Flemish Government, the rules address a real problem, the critical shortage of affordable housing. Mazak says that this makes it appear that the social obligation is related to the public housing policy in a member state and to the financing of that policy, which the Court has already recognised as an overriding reason in the public interest, but it is for the referring court to determine the precise aim of the rules at issue and whether that social obligation satisfies the principle of proportionality, in other words whether it is suitable for securing an increase in the supply of social housing and whether or not the established objective could be pursued by less restrictive measures with regard to the free movement of capital.
The judge says that the concept of “public works contract” contained in Directive 2004/181 applies in this case, namely to rules which make the granting of a building or land subdivision authorisation subject to a social obligation entailing the development of social housing units which should subsequently be sold at capped prices to, or, with substitution, by, a public institution. The Advocate General considers that the directive applies to such rules, provided that, firstly, they provide for the existence of a contract concluded between a contracting authority and that, secondly, an economic operator has a real opportunity to negotiate with the contracting authority the content of that contract and the price to be applied to the works carried out. (FG/transl.fl)