The brick crisis at the beginning of the century may be left far behind in time; But the truth is that, almost 20 years after the bubble burst, the sector has not yet recovered from its hangover. And that has dragged it into a paradox: although the country drags a serious deficit residential (some 700,000 homes) and prices they don’t stop going upin Spain there is a huge amount of immobilized buildable land, plots that after the crisis have ended up in the hands of municipalities incapable of promoting housing on them or of groups, funds and companies that have not been able to develop them or have not considered it viable.
It might seem like a minor issue if it weren’t for the fact that there are calculations who estimate that that ‘big traffic jam’ of land is costing the cities of Spain 2.9 million potential apartments. That is, houses that could be built on developed lots, but for one reason or another they still do not go beyond paper. Just over half (1.5 million) are also concentrated in the 15 main metropolises.
One figure: 1.5 million. The data comes from a study published in the last notebook of the Civic Circle of Opinion by Ignacio Ezquiagaeconomist and expert in the real estate sector. In it he basically dedicates himself to reviewing the “pending planned housing” in the main urban areas of the country. These are apartments and houses that should be built on plots of land in an “advanced state of urban development” or sectorialized (endorsed by a plan and the corresponding city council), but that still do not go from paper to work.
Why is it important? Because as Ezquiaga’s study recalls, that bag of land could accommodate millions and millions of new homes. To be precise, it speaks of about seven million properties, although a good part is located in rural areas where the gap between supply and demand is not as serious as in the capitals.
If we focus on the 86 urban areas of Spain, we find vacant land with the potential to host 2.93 million of housing. If we refine the shot even further and limit ourselves to the 15 main metropolitan areas of Spain, the figure remains at around 1.51 million homes. Of these, half a million would be located in areas with already urbanized land.
Madrid, in the lead. In your studioEzquiaga includes a table prepared with data from the Ministry of Housing that shows that the largest housing stock planned and pending execution is located in the Madrid area, at least if we talk about raw figures. There the potential is 351,000 properties, almost 15% of the total existing housing stock in 2021. The potential is equally high in Murcia (226,600 units), Seville (142,900) and Barcelona (142,900), although in general terms it adds up to thousands of homes in all areas of the country. The smallest is Palma, with almost 12,000.
In “dead hands”. To understand part of this large pool of stuck housing we have to go back almost two decades ago, to the bursting of the real estate bubble and its subsequent hangover. When brick ceased to be the business of the century and many developers were forced to close, the plots that had recently hosted residential projects began to become an asset with an uncertain future. A part ended up in private hands. Another, from the town councils.
Their casuistries are different, but in the end the result is the same: what Ezquiaga calls properties in “dead hands”parked plots, stuck despite having the potential to inject millions of homes into a market that, 20 years later, is once again tense. “Judging by its urban status, blocked for more than two decades in which many have remained vacant, these are not temporary but structural situations; that is why they remind us, overcoming the distance, of those owners who went down in history as dead hands,” reflect.
Who controls that land? As remember The Country There are two major fronts. 30% has remained in the hands of municipal administrations that once received them from the developers as part of the land that they had to give up to carry out their real estate projects. The problem is that not all town councils have the capacity, will or simply the resources to take advantage of that land and convert it into public housing (VPO). The result is that it ends up blocked, up for sale or redirected towards other uses, such as endowment services.
The remaining 70% of the land depends on private entities, but that does not guarantee that it will be exploited and converted into housing. The key is whether or not its development is profitable. And if they can finance it. This also explains that when city councils opt for public-private collaborations to take advantage of the land they control, they do not always find partners willing to embark on the projects. One of the keys is provided by Ezquiaga in your studio: The 15 main metropolitan areas in Spain have land with potential for a million and a half homes, but only a third are located in environments with already developed land.
“Vacant land”. Last year, in another study published by the think tank Funcas on the Sareb, Ezquiaga I already warned of the complexity of the scenario: “With a development industry with lower capacities compared to previous decades, the original projects were discontinued. Thus, many of the still viable lands would not adapt to the regulatory changes or the new territorial needs, paralyzing them and contributing to a surplus of vacant lands with negative consequences on the valuation of Sareb’s portfolio and, above all, for the long-term generation of new residential supply.”
He is not the only one who has drawn attention to the land with still pending potential in the cities of Spain. The Ministry of Housing itself has analyzed the main pockets of land available in Spain for new apartments, focusing above all on those areas in which at least 1,000 homes are planned and the degree of construction is less than 70%. He concluded that there is 1,069 sectors with the capacity to accommodate 2.4 million homes in 400 municipalities.
The other figure: 700,000. That in the cities there is land with advanced urban development but that has not yet been unclogged is important for a very simple reason: Spain needs more housing. Much more. The Bank of Spain calculate that the gap between the pace at which new homes are created and new homes built (the former advance much faster than the latter) has caused a serious deficit of 700,000 units.
This hole explains in part (in part) the imbalance between supply and demand, the rise in prices or that there are already cities that, precisely due to the lack of urban land, are already thinking about gain high-rise building.
Images | Danist Soh (Unsplash) and Parth Savani (Unsplash)
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