Maps 2015 (2) The blackout of the bubble

As I have already said some years ago, the central issue for the blog this year will be the grain of the city; i.e., how the detail that you see on the urban space is formed by aggregation of circumstances. The bylaws applied two centuries ago are the fodder of today’s tourism guides, and the old crisis often explain how a neighborhood took its shape (try to explain the XVth district of Paris and its architectural mix without the brutal economic discontinuity of the inter-world-wars period…).

The issue today is the way in which the real estate crisis spread over Spain in the recent years. The real estate sector, central for economic growth since the second half of the 1990s, based its expansion on the construction of new homes, mainly in peripheral zones. In terms of landscape, this means that large sectors of urban outskirts (often still without building, and probably with many years ahead in that situation) were prepared for development by building streets and infrastructure, by contrast to urban cores where existing streets received sometimes a face- lifting, but buildings got not that much of an upgrade in general terms.

The end of what has been called the real-estate bubble has not been homogeneous on the land. This can be analysed in many ways, and this is how I did it. The Ministerio de Fomento, the Spanish Government’s body more related to housing (an attribution of the regions) publishes each quarter data on the evolution of the selling price of the sq m of housing, for a set of 283 municipalities over 25.000 residents, recording differences between homes completed less than 2 years before and the older stock. I did not focus on price itself, but rather on when there has been a “blackout” in data due to a lack of statistic representatively of available data. I’m fully aware that there are other resources, authored by private agents, that have different data, but I chose this one as it is public and everyone can use it, and it also has chances to stay active for some time. A remark for those willing to use the source: for the analyzed period (first quarter 2005- third of 2014) a municipality was added to the list; I used an homogeneous series excluding that one.

This is what I did:

Data "blackouts" in new homes price statistics in Spain. To see again the animated image, uptdate the page.

Data “blackouts” in new homes price statistics in Spain. To see again the animated image, uptdate the page.

  • A map of the data “blackouts” (upper animated image, you can see green turn red): It identifies the last available data for each municipality concerning homes under 2 years. Just two municipalities (Madrid and Barcelona) have had a record of no data blackout in any quarter, and as of the third quarter of 2014 there were only eight municipalities with data: Almeria, Barcelona, Caceres, Madrid, Merida, Las Rozas de Madrid, Madrid, Teruel and Zaragoza. In some cases, as Madrid and Barcelona, metropolitan areas with many points can somehow mask the visibility of still “on the radar” municipalities.


  • A chart of the evolution by quarter of the number of cities without statistically representative values for the price of homes overall (no age class distinction), and for those under 2 years old (new homes). It is clear that in 2009 things became complex, and that the first quarter of 2011 became a clear threshold. By comparing the chart to the evolution of free homes (homes sold in a free market without public subvention to purchase) completed and the average price of a sq m of urban land in municipalities over 50.000, there are many parallels. Homes under 2 years old reduce, as there are no longer produced in large amounts.


  • A comparison between the charts of the home prices, in national average, in Spain, Colombia, France and the United States, by quarter, from the first 2007 to the second 2014, taking the valuest of 1st quarter 2007 as 100%. It is clear that France has not seen a drop in home values (a reduced residential output), in the US the 10% correction seems over (even if the difference in country size probably would deserve a more detailed analysis, and Colombia has a chart clearly reminding that of Spain five years earlier, something that doesn’t seem good.


  • A cross tab vision of the demographic size of municipalities and the number of quarters (regardless of their order) in which they have been “under the radar” for new homes prices. It is clear that size matters, and more populous municipalities (that in Spain are often those with the larger physical areas and have large developments) are those that seem to have best survived the crisis, with wider markets and, against all odds, a better stock of price- stabilizing elements for the housing demand (transportation, distance to jobs, facilities)

All this doesn’t imply automatic answers to questions regarding the future of these municipalities; any plan must face a future that, by definition, is uncertain, and so needs a certain degree of flexibility. But the lesson would rather be (as will be seen in future posts) that long term plans have a sense in urban planning if you grasp the idea that buildings will also be built long term. And therein lied the rump here, as development was drawn without a clear demand for the buildings that had to pay for the streets and pipes and electric lines that were built (leave alone the land itself, often bought at astronomic prices…).

Biblio (94) Vacant capacities

edificabilidadremanente-biblio 94

The Municipality of Madrid publishes every year a report on the building rights defined in the current General Plan that are still to be used (edificabilidad remanente). As a result of the current economic crisis (which at least in part is due to an excess housing offer as related to demand), their numbers as of january 1, 2014, are (for a city slightly over 3 million residents):

– Housing: 19.867.607 sq m (some 195.600 homes, that could house about half a million people)

– Industrial: 11.383.048 sq m

– Tertiary (what for most of our American friends would be commercial): 7.874.561 sq m

So there is still a large amount of potential job for everyone involved in city building; but where are the people that will populate that, work in new factories or office cubicles, or buy in new retail spaces? therein lies the rub… This capacity can be seen as an asset for the future, which is unpredictable in itself. But it seems a long term future.

Biblio (90) Pathfinders


UK’s National Audits Office published in 2007 a report on the Housing Market Renewal programme. This programme appeared in 2002 trying to cope with the problem of areas with a low housing demand combined with a sizeable vacant homes stock, in the previous industrial heartland of the North and Midlands. The Governement helped create nine sub-regional alliances, dubbed “pathfinders”, grouping all administrative levels implied and stakeholders. Each alliance was given a wide liberty to adapt to the specific problems of its constituency.

The rationale for the programme is in part an idea also used in Detroit: demolition as a regeneration vector. A housing stock unfit to demand makes urban regeneration more difficult; demolishing and building a smaller number of better units, in coordination with refurbishment of existing homes, was the intended engine for renewed cities.

Overall the grand total of the budget was to be 1,2 billion pounds for the 2002-2008 period, with an additional billion for 2008-2011. As of march 2007 the programme had used 870 million to refurbish 40.000 units, demolish 10.000 and build some 1.000 new units. The initial prevision was 90.000 demolitions between 2002 and 2018, a figure incrementally reduced over time.

According to the report, in 2007 there were positive signs of improvements in the real estate market and the urban quality of the concerned areas. However, impacts on social cohesion were also apparent, as well as doubts about the ability of such a kind of programme to tackle the real underlying causes for urban decay.

The programme was discontinued in 2011. According to a recent article on The Guardian, it seems it was far from a success.

European Choices (3) Urban planning, Danes and paella


In February 2009 the Auken report, by a Danish member of the European Parliament, became news in Spain. The reasons are the complains of citizens of other EU member states that had bought homes in Spain to find out they were affected by the urban planning laws of the Valencia region, with fast management procedures that they understood as opposed to their property rights.

The report analyses the fast urban growth of the country, its effects on the environment and other issues. Urban planning is central, but not as such (it is a matter of the States), rather as something that impacts the rights of the citizens.

An interesting reading on the limits that the Union sets to the power of the States. Since this report, there have been legal changes in Valencia, and there are already blueprints of a new law that would group what now is a too extensive legal corpus.

The report was seen as a good thing by many in Spain: those same problems also concerned Spanish citizens. Here the Union gave a broader view to adopt a decision on the effects of a temporary and state-specific issue (the real estate bubble). Only a minority (or at least this is what I have perceived) saw that as an encroachment on the sovereignty of the State.

Biblio (89) Rental housing in Latin America

biblio 88-vivienda alquiler

The Interamerican Development Bank has just published a work by Andrés G. Blanco, Vicente Fretes Cibils and Andrés F. Muñoz on the relevance of rental housing for Latin America. The document includes a description of the problems of housing in the region and the potential benefits of rental units; the current state of rental housing in the area; and policy recommendations regarding offer, demand and juridical framework.

Biblio (84) Sectorial Program for Agrarian, Territorial and Urban Development 2013-2018, Mexico

Mexico is a giant country: a straight line from Cancun to Tijuana measures about 3.200 km, about the distance from Lisbon to Helsinki or Mumbai to Bangkok. And there can be an impressive distance between neighbouring streets when it comes to quality of life. The Sectorial Programme for Agrarian, Territorial and Urban Development, published in December 2013, lays out the policies that the 2013-2018 administration pledges to apply in these domains.

The text describes the current condition of the country as far as urban development and housing are concerned, with substantial deficits. It is difficult to know what the future will bring in such a complex country; besides, there is no financial perspective in the document. But it give an overall vision of the problems. It can be downloaded at:

http://www.dof.gob.mx/copias.php?acc=ajaxPaginas&paginas=todas&seccion=SEGUNDA&edicion=255381&ed=MATUTINO&fecha=16/12/2013   (beware, the text itselfs begins at the page 65 of the PDF)

Rules and variations (2)

Each appartment has its own conditions...

Each appartment has its own conditions…

Rules are not just established by planning, but also by building codes or the demands of the market and the technology of the everyday products. Nearly every car is created with similar dimensions, but each home has particular conditions.

... but car slots are about all the same in the underground garage

… but car slots are about all the same in the underground garage

Maps 2014 (10) Home price mapping in France and America

Map by trulia.com

Map by trulia.com

There are three main ways to get data on real estate prices: conducting a study based on standard assumptions (usually comparing with neighbouring properties is factored), using listing prices or using the amount that the legal professional authorised by the Government to record the deed. This legal professional is a Civil Law Notary in civil law countries as Spain or France, or their former colonies. The third way is, assuming there is no tax cheat, the most precise, but it is not universally available, or its geographical detail is not of use; for instance, in Spain the General Notaries Council (www.notariado.org) publishes data by province. The geographical scope is relevant, as the real estate values depend a lot on location, and mixing in the same bag high price neighbourhoods with low price exurbs results in meaningless averages.

In France notaries (www.immobilier.notaires.fr) do publish data with a detailed geographical scope (census blocks). This  is good to understand recent activity. But a substantial part of the land has such a reduced amount of sales that data is not representative (or simply does not exist, just think of depressed rural areas with no sales for years). This does not prevent the fact that there is a demand for some kind of data, so it is estimated by a multifactor system, in which listing prices and realtors opinions are factored (www.meilleursagents.com).

In the US the fact that there is a continental size nation with 50 legal systems has led to nationwide portals as www.trulia.com, which estimate prices for a substantial part of the country, even if a large part of the central states, as Texas or Louisiana, are not rendered.

Taking as a reference data from www.meilleursagents.com, www.trulia.com and www.idealista.com for Paris, New York and Madrid, with an exchange rate of 0,72 € by $, and considering that 1 sq m is equal to 10,7 sq ft, you can see that the more expensive areas of Paris (rue du Bac, for instance) are over 14.200 €/sq m, those of Madrid (Recoletos) are around 11.000 €/sq m, and those of New York (Flatiron District) are in the region of the 16.000 €/sq m. Any need for more reasons to understand why the urban fabric of the core areas of successful cities has such an inertia?.

Map by meilleursagents.com

Map by meilleursagents.com

Where to live with 200.000 €? (5) Spain

Average price of a sq m of housing in the Spanish provincial capitals as of January 2014, data from idealista.com

Average price of a sq m of second-hand housing in the Spanish provincial capitals as of January 2014, data from idealista.com

Recent posts have been a vision on what you can buy with a given amount of money in different European cities, with a plan to show what you get for that money, are a reminder of how relative money’s value is. Using the same method for the 48 coterminous and Balearic Spanish provincial capitals, and using data about second-hand housing from idealista.com, you can see that the crisis context, which really has touched the whole country, has different impacts.

Sure, average real estate prices for a sq m of housing have fallen in all the capitals, but there is a difference between Barcelona (-7%) or Madrid (-10%) and Guadalajara (-27,4%) or Tarragona (-22,2%). Despite these corrections, the hierarchical order of cities largely remains: San Sebastian is still the most expensive capital (high per capita revenue, small territory, attractive city), while areas with lower revenues or activity are usually in lower price ranges.

According to January 2014 data from idealista.com, in Madrid and Barcelona 200.000 € would buy you about 60 sq m, while in Lleida you could get some 200 sq m, and in Caceres some 160. It is worth reminding that per capita revenue in Caceres is almost half that of Madrid.

It is also worth reminding that these are average prices for the whole area of each municipality, hiding strong variations among neighbourhoods. And keep also in mind that prices reflect a balance between offer and demand, as real estate bubbles have shown so well.

Surface (in sq m) 200k € can buy in january 2014, according to idealista.com

Surface (in sq m) 200k € can buy in january 2014, according to idealista.com

Housing price evolution in the last two years, according to idealista.com

Housing price evolution in the last two years, according to idealista.com