Franco also expropriated

Elif Eralp and Zohran Mamdani have won the elections in two global cities, with indisputable historical and global reach, and with an agenda for intervention in the housing market. In the case of Berlin, everyone is talking about the expropriations that Eralp wants to carry out, which are the result of a deliberate process backed by a referendum. The citizens of Berlin were asked if they would approve the expropriation of the property of the 12 large landlords with more than 3,000 apartments in the city, with a potential impact on 243,000 rental apartments out of 1.5 million apartments in the city. The detractors of the measure argue that the expropriations will create legal uncertainty and that a harmful message is being sent to investors. They do not speak of the residents who live there, of the economic need to provide stability to city workers so that there is dynamism, and of the duty of the property to carry out proper maintenance of all these apartments. In a 2018 presentation by the Housing Agency of Catalonia, the case of a portfolio of 16,000 apartments that BBVA had sold to the investment fund Cerberus was analyzed: the portfolio consisted of 4,995 empty apartments, 2,351 occupied, 4,000 rented, 1,306 ceded, and about 3,306 without possession. These are mostly apartments accumulated through mortgage foreclosures (families who could not meet their mortgage payments). The concentration of property is a very recent phenomenon in cities, and it is a very important morphological change, because the development structure we have in mind (what we learned at architecture school) is no longer in style: there are no longer small commercial companies building simultaneously next to each other, with ten-year real estate cycles, like at the genesis of the Eixample. It has reached a point where the properties of a single holder are spread across different cities and countries and portfolios of thousands of apartments are traded in transactions where often the condition of the apartment and the building is deplorable. But they don't even visit them. Also in Madrid, as I read in Infobae, the data from the AVS deposits indicate that there is a concentration of property in the hands of a few operators: more than 80% of rental apartments are in the hands of some funds and companies that own 5 or more apartments.

The mechanism of expropriation comes from the French Revolution, and it has a bad reputation for the property sector, but it provides for fair and impartial compensation. Franco also expropriated a lot, for example to deal with the migratory crises of people who were emigrating from the countryside, in conditions of extreme poverty, and to build large housing estates. It is not possible to build a train line or a greenway near the river without the mechanism of expropriation, which is provided for in all Constitutions and gives guarantees to the administration that expropriates and also to the affected owners.The urban agenda has changed: all urban debates in large cities now revolve around the “politique foncière”, as they call it in France, or the “land use agenda”, in Anglo-Saxon environments: the management and uses of land. In other words: in an era where there will no longer be large growth by extension, the projects that mayors put on the table are about the structure of property and the transformation of the city upon itself. In Catalonia, instead of using expropriations, the right of first refusal and retraction has been used a lot, which means that when one of these apartments coming from mortgage foreclosures is transferred, the administration or the third sector has preferential right of purchase. The purpose is the same: to detect apartments that can pass to the public housing stock immediately, guaranteeing affordable rental prices. It is a good mechanism, but one that in practice is rarely used because medium-sized municipalities are underfunded and cannot assume more than 10 or 20 acquisitions per year through this route. Would it be possible to apply the mechanism of expropriation here to address the housing crisis? In Catalonia, one of the structural problems is that there are many property owners and investment funds that accumulate land and do not develop it. In the current situation of housing emergency, this is a serious problem. The urban planning law already provides, in article 175 and the following ones, that owners have the obligation to build within the deadlines set by the planning, and municipalities can create a municipal registry of undeveloped plots, in order to initiate forced alienation proceedings, through expropriation or sale, also setting a fair price. On a practical level, however, between what the law provides and what the municipalities do there is a chasm, for many reasons. Surely it will not be necessary to reach generalized expropriation if cities have a registry of empty plots and actively monitor them, officially reminding the owners of their obligations and the aid they can receive if they develop. Just as in matters of public health you cannot control an epidemic without vaccines, in housing matters you cannot lower the real estate fever without exercising effective control over the land in urban environments. But putting it on the agenda, as Berlin and New York have done, is very necessary.