Tag: Compensation Boards

Madrid’s Town Hall Ratifies its Development Plan for SE

26 July 2018 – Observatorio Inmobiliario

The Plenary Session of the Town Hall of Madrid has approved alterations to the urban planning order in force for the Developments in the Southeast of the Spanish capital, thanks to the votes of Ahora Madrid and the PSOE. At the beginning of July, Madrid’s High Court of Justice (TSJM) provisionally suspended the Town Hall’s plan for this area.

The votes of Ahora Madrid and the PSOE were enough to approve a motion in the Plenary Session of the Town Hall of Madrid that seeks to adjust the growth of the Developments in the Southeast to the amenities, services and infrastructure demanded for the adequate development of urban life, whereby rationalising the Plan that has been provisionally suspended by the High Court.

“With this motion, we want to ratify the commitment with the criteria reflected in the document that should govern the construction of these developments”, explained the delegate for Sustainable Urban Development, José Manuel Calvo.

Meanwhile, the Compensation Boards that succeeded in getting the TSJM to stop the Plan confirm that if an amendment to the General Urban Plan is approved, then they will study the possibility of appealing and they will request the corresponding compensation.

In a statement, the same sources explain that “they lament” the path that the Town Hall is seeking to initiate. “If the modification is approved in the end, we will study the possibility of appealing the agreement and, at the same time, we will interpose the procedures of state liability to request the corresponding compensation”, they warn.

Nevertheless, they added that it is going to be “very difficult” for the Town Hall to justify the need to modify the plans, which is “a necessary requirement for its approval”.

Original story: Observatorio Inmobiliario

Translation: Carmel Drake

Madrid’s Town Hall Faces Compensation Payments of €1.6bn For Suspending Developments in SE of the Capital

16 May 2018 – El Confidencial

The suspension of the developments in the south-east of Madrid could cost the capital’s Town Hall as much as €1.6 billion, in other words, 34% of its annual budget. That is the calculation that two independent experts have performed on the basis of the execution of the Master Plan for the New Development Strategy for the Southeast of Madrid, which has led to the ‘de facto’ paralysis of all of the areas in the south of Madrid: Los Berrocales, Valdecarros, Los Cerros and Ahijones, the last large block of buildable land to the south of capital, which was destined to bring thousands of homes onto the market at affordable prices.

The report, compiled by Federico García Erviti and Gerardo Roger Fernández Fernández, experts in urban planning valuations, estimates that the indemnity payments for the Compensation Boards of Valdecarros, Berrocales and Los Cerros will amount to €1.58 billion. The Master Plan itself, compiled by the Town Hall, mentions possible compensation payments but does not quantify them.

According to this document, the number of homes will be reduced by two thirds – from 105,000 to 38,708 – ; also, the total surface area will be cut and several other modifications will be made to the plans.

Specifically, according to the report from these experts, we will be talking about a payment of more than €640 million for the Compensation Board of Los Berrocales, another €755 million for Valdecarros, whilst, in the case of Los Cerros, the indemnity payment will amount to €182 million. To all of these figures, possible additional compensation payments to each one of the owners – around one thousand – will have to be made, who may also file claims with the Town Hall of Madrid, for example, for the taxes paid over the last few years for buildable plots, whose classification is now going to change on the basis of this Master Plan.

“The Master Plan does not have any legal validity to make a modification such as the one required”, said Juan Antonio Gómez-Pintado, Chairman of the Association of Property Developers of Madrid (Asprima), who considers that “during periods of real estate activity, such as the one the sector is experiencing at the moment, the effects of these measures and the damage for the city as a whole are irreparable, given that they have paralysed the only block of buildable land with these characteristics, where homes could be built for the lower and middle classes in the capital, driving those who want to buy a home at an affordable price out of Madrid”. Moreover, he considers that “the Master Plan will lead to significant increases in the price of land, whilst the legal uncertainty will scare off investors” (…).

The (Compensation) Boards filed an appeal against the Master Plan, as well as the legality of it, with the Supreme Court of Justice (TSJM), because they consider that “a pseudo planning instrument has effectively been approved. A town hall cannot approve an urban planning instrument”, and they have requested the precautionary suspension of it. The TSJM has admitted the appeal for processing but has not ruled on the matter for the time being.

Since the arrival of the new Government in Cibeles, “developments have slowed down and there have even been written requests for their agreements to be adapted to the Master Plan”, claim sources from Asprima.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Carmena’s New Plan Prevents Construction of 50,000 Social Housing Units in Madrid

10 April 2018 – El Mundo

The Compensation Boards of Valdecarros, Berrocales and Los Cerros have filed a contentious-administrative appeal requesting the precautionary suspension of the Master Plan approved by the Town Hall of Madrid in January, which prevents the construction of more than 50,000 social housing units in the southeast of Madrid.

The representatives of the three developments in the southeast of the capital have received public support from Madrid’s Association of Property Developers (Asprima), which considers that “the application of the Master Plan would have very negative consequences for Madrilenians by making house prices more expensive, in both the rental and purchase markets; it would cause serious harm to the municipal coffers due to the large number of compensation claims that the Town Hall would have to pay out”, say sources at the entity.

On the other hand, Asprima warns that the aforementioned plan “would prevent the construction of more than 50,000 social housing units and the development of important public housing construction plans for rental properties, and as a result, would lead to an increase in house prices, placing further pressure on demand in towns on the outskirts, and further congesting the access roads to the capital”.

The appeal highlights that the legal nature of the Master Plan is uncertain since it is not provided for in the Community of Madrid’s governing Land Law and that it should be considered as a binding directive or as a legal planning instrument, which may be appealed and suspended in a precautionary way.

Moreover, “the Master Plan has been built as a figure with regulatory strength, but it was approved by the Government of the Town Hall of Madrid without a prior report from the General Intervention or any report from the municipal legal services. Similarly, it was not subjected to any public consultation to allow citizens to express their opinions”, say sources at Asprima.

It is for this reason that Madrid’s Association of Property Developers considers that the Compensation Boards of Valdecarros, Berrocales and Los Cerros have sufficient legal grounds to request the suspension of the Plan and, in addition to the legal grounds, all of the economic and environmental data available to draw the conclusion that the developments in the southeast are absolutely necessary for the city.

Original story: El Mundo (by S. V.)

Translation: Carmel Drake

Madrid’s Town Hall Approves the Master Housing Plan for SE of the Capital

29 January 2018 – Inmodiario

The Governing Body of the Town Hall of Madrid has approved the Master Plan that defines and organises the actions that the Town Hall of Madrid is going to launch to execute the Strategy for the Development of the Southeast of the capital (EDSE). The Master Plan covers the districts of San Blas-Canillejas, Vicálvaro and Villa de Vallecas and aims to adjust the urban growth strategy of the General Plan of 1997, whereby ensuring its feasibility and coherence, and making it compatible with a sustainable, balanced, social and environmentally responsible regional model.

Los Cerros, Los Ahijones, Los Berrocales, Valdecarros, la Nueva Centralidad del Este and el Ensanche de San Fernando were spaces planned by the General Plan of 1997 to develop 4,400 hectares, building more than 105,000 homes and 6.5 million m2 of space for economic activity.

The Master Plan that has just been approved proposes a redefinition of that Plan, which adjusts the public use, the residential use – it proposes half the number of the homes, down from 105,000 to 53,000 – and the economic activity use.

The objectives of the new plan include improving the urban quality of the Los Ahijones and Los Berrocales neighbourhoods in terms of public spaces, commercial activity, the location of facilities, and the necessary public transport networks, introducing modifications in their detailed planning.

It also requires a strengthening of the management conditions and guarantees from the Compensation Boards that build the 38,000 homes and develop 1.9 million m2 of space for economic activities.

Moreover, new areas of management will need to be defined with smaller territorial dimensions, inside the M-45, that continue the existing city, corresponding to the new areas of Valdecarros-La Gavia and Los Cerros Norte-San Fernando with almost 530 hectares and capacity for 14,500 homes. And to strengthen the network of free spaces with two large green spaces around the Cerro de Almodóvar and the connection of the La Gavia park with the Manzanares River.

The new Master Plan also proposes the creation of a 1,850-hectare land reserve on the remaining land in Los Cerros, Valdecarros and the Nueva Centralidad del Este, whose planning and execution will be defined and scheduled depending on future needs (…). That land has capacity for approximately 45,000 homes and 2 million m2 of buildable space for economic activity (…).

Finally, the plan stresses the need to carry out two programs of land development, in accordance with the real demand for residential housing and economic activity: the first, forecast for the years 2022-2030 will allow the construction of 27,700 homes and 1.3 million m2 of buildable space for economic activities; the second program, which will run between 2031-2039, will involve the construction of 26,000 homes and 1.2 million m2 of buildable space for economic activities.

Original story: Inmodiario

Translation: Carmel Drake

RE Investment Worth €13,000M At Risk In Madrid East

23 May 2017 – El Mundo

Landowners with town planning and real estate projects in the south-east of Madrid, represented by Compensation Boards in the new neighbourhoods of Los Berrocales, Valdecarros, Los Cerros and Los Ahijones, warn that the Town Hall’s failure to define the development of the area could put at risk investments amounting to more than €13,000 million.

It is estimated that this investment, relating to urban planning, property development and the construction of housing, business and retail parks, public spaces and green areas, would generate 965,000 direct and indirect jobs in total over the next few years.

The Compensation Boards, which are grouped together under the Madrid East brand, have issued a statement in which they denounce that, with the establishment of the so-called working groups for the analysis, evaluation and assessment of the alternatives for the development strategy for the south-east, the Town Hall “is doing nothing but delaying the development of projects that have already been granted the necessary legal and town planning support and that have now been suffering delays for more than 20 years”.

For Madrid East, the urban planning activities in the south-east of Madrid “are essential for facilitating access to housing at affordable prices, given that an increase in the supply would help to contain the house price rises that have been seen in the capital in recent months, in both the ownership and rental segments”. In addition, in its opinion, these developments would allow the Community and Town Hall of Madrid to boost their social housing plans aimed at supporting those groups most in need.

“Failure to respond to the increase in demand that is expected, given the forecast growth in households over the next few years, will put upwards pressure on prices, whereby restricting effective access to housing. In the context of the high prices of the available housing stock in the north of the city and inside the M-30, Madrid East’s strategy would allow the construction of new homes at accessible prices for young people and families with the least purchasing power”, said the statement.

“We have the opportunity to resolve the housing problem for the next 30 years. We cannot repeat the same mistakes that were made in the 1980s when the Town Hall of the time considered that Madrid would not groanymorere and then promoted the urgent development of the PAUs”, it said.

Sources at the Compensation Boards believe that the Town Hall “must ensure that public investment is made in the developments to the south-east of Madrid, guaranteeing the best services for citizens, but at the same time, respecting the plans that have already been approved, as well as providing legal certainty for investors”.

In this sense, the landowners in these areas say that private investments in the main activities in Madrid South-East “already exceed €300 million, with mortgage commitments acquired over the medium and long term for their execution” and they warn of possible “legal consequences for the city of Madrid in the event of any stagnation in this regard”.

Original story: El Mundo

Translation: Carmel Drake