The Greek government is making a bold move to overhaul its urban planning system, stripping municipalities of key responsibilities and centralizing building permit approvals under the Ministry of Environment and Energy. This dramatic shift aims to protect both sensitive areas and large-scale investment projects, following mounting concerns over unchecked development in popular tourist destinations. However, the Central Union of Municipalities of Greece (KEDE) is pushing back, threatening to challenge the changes in the Council of State.
Cracking Down on “House-of-Cards” Permits
In the wake of scandals surrounding controversial construction projects—such as the now-infamous hotel on Milos, and the rampant overdevelopment, both legal and illegal, across the Cyclades, particularly on Mykonos and Santorini—the government is taking decisive action. Its goal? To break free from municipal control over urban planning, a system long plagued by inefficiencies and local political entanglements.
According to government sources speaking to TO BHMA, the new strategy focuses on two key objectives: establishing a protective “umbrella” for Greece’s natural and built environments while ensuring investment security. The ultimate aim is to bring legal clarity to urban planning while dismantling the deeply entrenched culture of unauthorized construction.
Reviving the Central Urban Planning Authority
At the heart of this transformation is the revival of the Central Urban Planning Department (KYDOM), a government body created in 2020 but never staffed or activated. Now, the government is determined to breathe life into it, assigning it responsibility for issuing permits related to major infrastructure projects, developments exceeding 3,000 square meters, and construction in environmentally sensitive areas.
Discussions are underway about whether KYDOM. should also take over responsibilities from other ministries, such as the Ministry of Development (which currently oversees strategic investment plans), the Ministry of Tourism (which handles permits for tourism-related projects), and the Ministry of Culture (which regulates construction near protected historical sites). However, it remains uncertain whether these ministries will agree to relinquish control.
A Political Battle with Municipalities
The second major initiative involves the gradual transfer of all municipal urban planning offices to the Ministry of Environment and Energy, consolidating them under a single national framework. While this is intended to streamline processes and increase efficiency, it has sparked fierce opposition from municipal leaders.
“The ministry doesn’t want any local authority interfering with its plans,” says Grigoris Konstantellos, vice president of KEDE. “If they try to push this through, we will challenge it before the Council of State, with the full backing of municipalities overseeing the country’s 150 urban planning offices.” KEDE has already assembled a team of legal experts to fight the move.
Government officials, however, remain firm. “Just as Greece’s forestry services were returned to the Ministry of Environment, so too will urban planning,” says a high-ranking ministry official.
Balancing Growth and Environmental Protection
The government’s plan is driven by two competing priorities: accelerating major investment projects and curbing reckless construction in already overdeveloped tourist hotspots.
The Sarakiniko hotel case is just one of many contentious projects. In the coming months, Greece’s Council of State is expected to rule on a high-profile tourism development overlooking the iconic Vlychada Beach on Santorini. In a previous decision, the Piraeus Administrative Court of Appeal sided with the Society for the Environment and Cultural Heritage (ELLET), nullifying the project’s building permit.
Meanwhile, in Sikinos, local residents are up in arms over a government-backed master plan to convert abandoned mines into a tourism complex. The case has drawn international attention, with the World Monuments Fund recently adding the site to its “World Monuments Watch” list, recognizing it as a cultural heritage site at risk.
Loopholes and the Construction Boom
Despite the government’s stated commitment to controlling development, building activity on islands like Santorini and Mykonos has not slowed down. A temporary freeze on new tourism-related building permits in non-urban areas has been in place for three years, yet legal loopholes have allowed construction to continue.
According to Nikos Delendas of ELLET’s committee of Santorini, these regulatory gaps have been exploited to approve significant new developments.
“For example, between August 7 and August 31, 2021, permits for 18,297 square meters of new five-star hotel space were approved. Similarly, between August 8 and September 15, 2023, another 4,184 square meters were authorized,” he explains. “Essentially, developers had their applications ready and submitted them during these short windows, resulting in the pre-approval of nearly 26,000 square meters of new construction—some of which is already being built.”
Additionally, the permit freeze applies only to tourism-related projects, allowing residential construction to continue unchecked. Many of these new homes are quickly converted into short-term rentals, such as Airbnb properties.
“We needed a complete freeze on all new construction in Santorini and Mykonos,” argues Betty Hatzinikolaou, a legal expert on tourism regulations and former head of the Greek National Tourism Organization (EOT). “In the past, we’ve seen projects labeled as ‘office buildings’ with swimming pools to bypass restrictions. Eventually, we had to impose an outright ban to stop such tactics.”
Strategic investments, however, remain exempt from these restrictions, further fueling concerns about unchecked expansion.
A System Plagued by Gaps and Delays
At its core, the government’s attempt to centralize urban planning highlights the failure of Greece’s decentralization experiment in public administration. But beyond shifting bureaucratic control, fundamental weaknesses in the planning system remain.
For instance, Greece has lacked a Special Spatial Planning Framework for Tourism for the past eight years. The previous framework was annulled by the Council of State, leaving tourism investments reliant on outdated regional plans and fragmented local regulations. While studies for 227 Local Urban Plans and 18 Special Urban Plans are currently underway, they won’t be finalized until at least 2026—and even then, it will take years for them to be reviewed and approved as Presidential Decrees.
Similarly, the Special Environmental Studies (EPMs)—which were meant to define land-use rules for Greece’s Natura 2000 protected areas—have been stalled since 2019. Out of 23 studies commissioned, only three have been completed, with none yet formally approved.
Meanwhile, enforcement remains weak. Illegal construction and unauthorized expansions continue largely unchecked, as demolition orders are rarely carried out. The Ministry of Environment is developing new oversight tools, but whether these will be effective remains to be seen.
