The scarcity of final-use land (consolidated urban land) for building affordable housing is usually attributed to planning (to the technical complexity of urban planning), but Ignacio Ezquiaga, in a study for the Funcas Foundation, has another explanation, which seems convincing to me in light of what I know about Sareb.
I've visited numerous Sareb properties, most of them very run-down and unusable apartments, some so vandalized they haven't even been occupied. And while visiting several coastal towns, I've discovered fenced-off lots and unfinished structures that, after a little investigation (because they're never marked with signs), I've learned also belong to Sareb. One of these lots is a large swimming pool on the outskirts of Lloret, the ruin of a half-built parking garage that was supposed to be part of a future shopping center. Water, mosquitoes, and filth accumulate year after year amidst perfectly constructed retaining walls, with no one knowing what to do with this cursed lot. There's also a large lot near my house, with paved streets and enough space for about sixty homes, which is owned by Sareb, and no one knows when they'll bring in a crane.
Ezquiaga explains that the available land is in the hands of organizations that received it as payment for debts incurred during the bursting of the financial bubble. These are mostly banks and investment funds that lack the expertise and probably the interest to modify planning regulations, manage urban development, and construct the resulting housing. All of this has undoubtedly contributed to the withholding of land and the consequent housing affordability crisis. The land is not in the hands of operators who want to use it as a resource for building affordable housing.
There is little housing available, but plenty of developable land. Most of it was mortgaged land before the bubble burst, which became collateral for loans to developers. What remains of the development sector is right to say that they cannot find land at reasonable prices that would allow them to build at affordable rates. This is partly due to the expectations of current property owners, who are unwilling to accept the loss in value. It is the urban manifestation of the debt generated by the bursting of the housing bubble.
The vast diversity of developers (large and small, local and national) has shrunk since 2008, and ownership has become concentrated in the hands of a few large landlords and international funds, who are only interested in recovering their debt and are, quite literally, holding onto the land that was planned to accommodate them. They've been doing nothing for 15 years.
There are also many uncertain plots of land held by Sareb, which accumulated so-called "toxic assets" to improve banks' balance sheets. Most of these are scattered throughout the country and would be beneficial for rebalancing the economy. The problem is that Sareb has taken no steps to improve the value of this land. It has done little maintenance on existing buildings and has not processed any urban planning modifications or made any progress in developing streets to make building plots available to the market. Ezquiaga estimates that there are between 200,000 and 400,000 homes in Spain—both built and potential—that Sareb could immediately put on the market for the production of affordable housing. Will the new company Sepes, named Casa 47, dare to undertake this task?
In Catalonia, these lands cannot remain unused during the current crisis. If Sareb or large landowners are withholding them, the Catalan government must establish a mechanism for mandatory purchase at affordable prices and make them available to non-profit organizations and cooperatives. It cannot be more profitable to wait than to address the current housing demand. Social actors (foundations and cooperatives) lack the knowledge and capacity to enter into complex negotiations with large landowners or banks, but they could put these lands to good use and quickly build affordable housing, as has been done throughout the years in Catalonia. For example, between 1983 and 2001, cooperatives developed 8,180 new homes on land ceded by the Catalan Land Institute (Institut Català del Sòl).
Finally, I'd like to point out a second consequence: financiers may know how to buy and sell assets, but the value of these vacant lots is determined by planning—that is, the vision of the city that urban planners project onto each neighborhood. A plot of land doesn't become a place until someone assigns it urban value (a project, an idea). For the financial sector, which accumulates vast land reserves, urban planning is now, more than ever, absolutely essential.
