Real estate

Starters of urban change (9) Municipalities

Municipalities can be a powerful starter of urban change… or of inertia, depending on their ability to create positive dynamics on their territory. This is related to their accounts, and that is interesting in this year in which we will go vote for municipal councils in Spain and France. In the US the local administration system differs from state to state, so the only rational way to compare would be to take any given state in the US and compare to a given European country.

What follows is a (primary) analysis of data from the Virtual Office for the financial coordination with local entities (, which aggregates data from over 8.000 Spanish municipalities and Diputaciones and other organs classified as Local Entities. These are data from closed fiscal years with real accounting results, in a series running between 2003 and 2013 (last available year). Data are in thousands of euros for each year (inflation is not accounted for). For those out of Spain, most of urbanism and housing expenditure has been private for decades. Local administrations get resources in that field through taxation and a compulsory free cession that builders must deliver when they execute an operation, consisting in a percentage of building rights and the lots where it sits (the sale of these lots is often most of the “land lots sold” item).

As a result of that analysis, three charts show matters that are somehow linked to urban planning and related matters.

Income in Spanish local entities, selected items

Income in Spanish local entities, selected items

Income: local governments got to an all-time high for income in 2009; as of 2013 they were slightly under the 2006 level. The tax on urban real estate (data before 2009 make no difference between urban and non-urban) changes from 15% of total income in 2003 to 25% in 2013, while lot sales were reduced from 3,4% to 0,34% (in 2006 they reached 6%). The privative use of public domains went from 1,5% to 3,1%, as it is clearly apparent in the public space with sidewalk café and restaurant terraces, at least in part as a response to tobacco laws. The tax on urban land value increases has only grown from 2,9% to 3,6%, with quite reduced oscillations.

Investment in Spanish local entities, selected items

Investment in Spanish local entities, selected items

Investment: the investment on new infrastructure and general use goods was almost 7% in 2003, and it has gone down to 2,2% in 2013. When it comes to maintain these infrastructure and goods we have gone from 3,4 to 1,6% over the same period, and new/maintenance costs for operational services have followed a similar pattern.

Investment in Spanish local entities, selected items

Investment in Spanish local entities, selected items

Detailed investment: the real investment (not taking into account personnel costs and other elements) of the Spanish municipalities has followed a more complex curve. Up to 2010 this real investment was over 25% of the total expenditure, but since then they have lost weight (9,4% in 2013). Urbanism and housing were around a third of real investment up to 2010, and since they have increased to reach 44% in 2013, even if the absolute figure is half that of 2003. To give an order of magnitude, education (in which local administrations have a limited role) went down from 4% to 3% over that period, and its absolute value was reduced to a third of the 2003 figure.

Overall, the evolution of income and expenditure has been somewhat balanced (added figures for the whole period show more income than expenditure), but there have been relevant changes in relative weights. Land lots sold, whose expansion was related to the real estate bubble, have reduced substantially, while real estate taxes have increased. Investment in new infrastructure have reduced nearing those concerning infrastructure maintenance. Real investment in housing and urbanism has increased its weight in the overall real investment. But as in absolute terms this investment has been strongly reduced, today it is limited to solve previous deficits

Biblio (121) Long series for real estate prices in France

biblio121-series longues prix immo- Paris depuis 1200

Here is a set of interesting references on long-term real estate prices in France, for the 1936-2015 period in the whole country and 1200-2015 for Paris. This vision in long-term series reminds me the long series on revenue on which Pikety supports his ideas.

Series from 1200 in Paris are evidently based on various methodologies, with a lesser statistic representatively. They show an erratic journey, but reality can sometimes be so.

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…).

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

Map by

Map by

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 ( 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 ( 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 (

In the US the fact that there is a continental size nation with 50 legal systems has led to nationwide portals as, 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, and 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

Map by

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

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

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, 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, 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

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

Housing price evolution in the last two years, according to

Housing price evolution in the last two years, according to

Where to live with 200.000 €? (4) Lisbon


According to, the offer of homes under 200.000 € in Lisbon is rather large. According to the location and age of the building (few new buildings in this price range), you can reach up to 100 sq m for that price.

71 sq m in central Lisbon (second level, no lift)

71 sq m in central Lisbon (second level, no lift)

Where to live with 200.000 €? (3) Paris


In Paris city (not considering suburbs), according to, 200.000 € would let you pay usually less than 15 sq m. In some cases you can even reach 25, even 30 sq m, in less central districts, but it seems uncommon. This is the cost of a very liked city, not just for tourism.

Where to live with 200.000 €? (2) Amsterdam


According to, the Dutch realtors association portal, there is a large offer of homes for sale in Amsterdam under 200.000 €. The Dutch market is not at its highest moment, with prices falling during 2013. In the most central areas the offer is made up of flats under the 50 sq m. Out of the inner ring surfaces are often over 80 or 90 sq m, a surface that is also reached north of the Ij river, already with individual homes.

40 sq m in central Amsterdam

40 sq m in central Amsterdam

80 sq m north of the Ij

80 sq m north of the Ij

Where to live with 200.000 €? (1) Madrid


What is the euro for? Among other things, you can compare the cost of items across cities in Europe. As housing goes, 200.000 € can buy a home, but where and at which surface?

55 sq m of recently built housing, close to the M30 inner ring

55 sq m of recently built housing, close to the M30 inner ring

In Madrid, according to, there is a relevant offer at such price. In the most central areas there are homes of different areas, usually under 75 sq m; the construction year of the building and the conservation state are relevant. In peripheral areas you can reach larger surfaces, especially among the recently built housing stock still in the market.

Maps 2014 (9) Renewable energy in the UK

Renewable energy production systems installed in Europe during recent years mean that often areas that for most of the XXth century have just been energy consumers have become producers. This has meant revenues, but also negative externalities of many kinds.

As one more element in an increasingly growing trend all over Europe, the UK, up until now among the forefront states in terms of climate policy and mitigation, shows signs of a shift. And economic reasons are there, which requires at least a thought as in a democracy a government is elected to choose between opposed options. A recent report (November 2013) by Stephen Gibbons, from the London School of Economics, studied the impact of wind turbines on real estate values in neighbouring areas, with reductions averaging 11%. In June 2013 there were news about the study by the UK government of a compensation scheme for neighbouring communities. has published an interactive map showing the extent of the renewable energy systems across the UK, each with a potential impact; and the Highland Council map reveals the degree to which northern Scotland is receiving wind farms. On the other side, the opposition to wind farms in Europe is organizing initiatives as EPAW; its real capacity to push for alternatives  depends on how they will reconcile potentially contradictory demands of their members. Those willing to defend the real estate value of their land, often to build more, can disagree with those opposing wind farms just for the sake of environmental and landscape conservation.

Highland Council map

This can lead, in a context as the European one, with an aging population and a severe depopulation of the countryside, to a division between “franchised areas” in which almost everything is allowed, and “protected areas” in which these impacts are prevented. These protected areas would be rather different from what nowadays we know as such, as these (low or zero human presence, but environmental values) could eventually be “franchised”. After all, the European Landscape Convention says that a landscape exists by virtue of the presence of an observer…

But there may also be here a cultural issue. A 2009 report by the Massachusetts Clean Energy Center, based on US cases, showed just a minimal impact on real estate values. This would not mean Americans love their windmills, but rather that they have a different relative perception of their impact (and a different method in the reports).