BAKU, July 21 — In areas targeted for renovation and redevelopment across the Azerbaijani capital, residents are increasingly divided. Some demand cash compensation for their homes, while others prefer to receive new apartments in the same location once their old buildings are demolished.
Real estate expert Firdovsi Khalilov warns that although Baku is implementing a large-scale plan to gradually demolish and replace outdated housing stock, the absence of standardized compensation tariffs for private construction companies is fueling instability in the housing market.
“Developers are forced to negotiate with each resident individually, offering either financial compensation or replacement housing. This creates chaotic pricing and, ultimately, leads to a sharp rise in overall property values,” Khalilov explained.
He notes that this situation places a double financial burden on developers. They must often pay substantial sums to some residents while also covering rental costs for those who agree to relocate temporarily until their new homes are built.
“All these expenses are eventually passed on to the price of newly constructed apartments,” said the expert.
A Proposal to Restore Order
Khalilov proposes a clear solution: the introduction of a unified compensation tariff for private construction firms. This, he argues, would bring transparency and predictability to the redevelopment process.
“Once construction costs are properly regulated, we will likely see a gradual drop in housing prices,” he emphasized.
What was meant to be a policy of urban improvement has, due to inconsistent pricing practices, become a source of uncertainty and price inflation. Experts agree it’s time for a more structured and fair approach.
