Town Planning Paralysis In Madrid: 60,000 New Homes On Hold

2 February 2017 – El Economista

Paralysis is the word that best defines town planning in Madrid at the moment. And, the people who are ultimately paying the price for these stoppages in the capital are its citizens. The shortage of supply is pushing up land prices, which is, in turn, driving up house prices, forcing many families out of the city centre.

That is the scenario that Madrid is currently facing.  Construction of more than 60,000 homes has been suspended, in the north and south of the city alike, projects as iconic as Operación Chamartín with 17,000 homes, Valdebebas with 1,000 homes, Residencial Metropolitan with 400 homes, Berrocales with 22,000 homes and Operación Campamento with 11,000 homes, are being affected. And these are just a few of the most high profile examples that are still waiting to receive the green light from the Town Hall of Madrid.

The paralysis of these projects has created a lack of supply in terms of housing, which is forcing people to move to towns on the outskirts of Madrid. For example, in the north of the capital, buyers are moving towards Alcobendas and San Sebastián, and in the south they are moving towards Rivas. “These towns are aware of the significant demand that they are generating and in the end, that is causing prices there to rise. In fact, the supply has almost run out in Rivas”, explains Ignacio Ortiz de Andrés, analyst at Foro Consultores.

According to the politician Bosco Labrado, spokesman for the Ciudadanos Party and President of the Committee for Town Planning at the Town Hall of Madrid, “in order to resolve town planning in Madrid, we at Ciudadanos propose obtaining consensus between all of the political forces and agents that participate in town planning – we demand greater legal certainty, updates and modifications to the General Town Plan – which is the tool that we use nowadays, but which is out of date – and finally, support for more public-private collaborations, which have already worked well, such as the renovation of the Beurko neighbourhood in Vizcaya, and efforts to try and strengthen them”.

Affordable (subsidised) housing is particularly scarce. If we look at the south of Madrid, demand has been forced out to towns on the outskirts due to the lack of supply. “If someone is looking for a subsidised homes for between €160,000 and €200,000 with three bedrooms, there is currently nothing available in Madrid. In the south, all construction work at Los Berrocales, where most of the land is owned by the Town Hall, has been suspended and demand has moved to Rivas”, said Juan José Perucho, CEO at the Ibosa Group.

And Los Berrocales is not the only area where work has been suspended. The situation is the same with Operación Campamento, owned by the Ministry of Defence (…). In short, in both the north and south of Madrid, the Town Hall has put the brakes on and Madrid’s housing supply is becoming increasingly limited.

Original story: El Economista (by Luzmelia Torres)

Translation: Carmel Drake

82