Living alone
Spain has 565,000 unsold homes, 290,000 more under construction and 360,000 frozen mid-development; the halt in real estate activity has made it a country of empty lots and unoccupied apartment blocks. But a few people do inhabit these places. This is their story
In the yellowish semi-darkness of an underground parking garage in central Madrid, Paula Márquez meets up with Pavel Gómez after work each day and they head home. As they drive along the A-2 freeway, the city gives way to shopping centers, construction sites and industrial parks. The high-speed train that connects Madrid and Barcelona speeds along a thousand meters above them. They cross paths with it again an hour later, at the top of the high plateau that dominates Guadalajara. From the middle of this dry land where sunflowers are still being sown, frogs croak in summer and the winter wind is turning inclement, Ciudad Valdeluz appears. It's a big scar that someone, in an online real estate forum, compared to "a bad game of Sim City," referring to the video game where the object is to build and supply cities like God, or an omniscient urban planner would do.
From the air, Valdeluz makes one wince. The halt in real estate activity has left squares of asphalt and empty lots, like a blank pad of graph paper. There's only life in one corner of it, surrounded by nothing but roads, paths and farmland. This is home to Paula and Pavel and 1,200 others; just four percent of the projected population. There are many ways to live alone. This is one of them. The development was intended to accommodate 30,000 people, over one-third of the total population of the city of Guadalajara. When the first stone was laid in 2004, the prospects were encouraging. It had everything: a high-speed train station, competitive prices and was close to Madrid. You could almost see the trains and houses full of people. But something unexpected happened in the meantime; something that had started brewing that same year all over Spain: a slight imbalance between supply and demand; a huge bubble that finally went pop.
This burst bubble has left behind a country full of empty lots and flats, of unnamed streets where just one or two lights go on at night, and a building that looms like an island in a desert. On the outskirts of big cities, it isn't unusual to find entire apartment blocks inhabited by only five or six families. They look out their windows and see skeletons of concrete and rust, victims of the bubble. They see uninhabited land that was developed too late, when the hot potato of construction was starting to leave people with blisters on their hands. In Spain, if we wanted to, we could put a roof over the heads of everyone in Norway. Not only do we have an army of new homes; there are also those that are halfway-built or that never got past the project phase. This was the scenario at the end of 2009, according to a report by R. R. de Acuña y Asociados, one of the most reputed consulting firms: unsold, finished homes: 565,063; under construction: 290,441; frozen: 358,071; never got past the planning stage: 1,073,670; finished residential properties for sale: 1,342,435. All in all, there are 3.6 million current and future domiciles inhabited by nothing but hot air. By the calculations of this consulting firm, if the market conditions remain "constant," it will take at least six years for the surplus housing stock to be absorbed. The future is even bleaker for land zoned for development, those empty squares like a blank pad of paper. According to Fernando Rodríguez de Acuña, in charge of projects for the company, "Clearly, nothing is going to be built there in a long, long time." From the air, you can see the map of an unfinished, residential Spain. On the ground, people adjust to life there as best they can.
When they get home and park their car in the garage, at just after 8pm, Pavel usually makes himself some juice while Paula does her yoga exercises. When the days get longer, in spring and summer, the last rays of sun hit the house. They go out on the deck, lie down on their chaise longue and watch the sun sink into the horizon. Winter is not so pleasant, but their home is nice and spacious. On their living room bookshelf is the board game The Settlers of Catan, which they usually play on Saturday mornings with another couple from the neighborhood. Perhaps that's why Paula, a secretary at a law firm, likes to call herself one of the "settlers" of Valdeluz, the ones who came to those 490 hectares before there was a single supermarket, shop, doctor's office or bar. This first generation of 300 residents have watched phase one of construction get put on hold, while the other three planned phases were suspended indefinitely. "The rate of construction will always adjust to the demand," according to a spokesperson from the developer Reyal Urbis, which has handed over part of their assets in Valdeluz to the banks as part of a process to renegotiate a debt of 4.6 billion euros.
The halt in real estate activity has its side effects. The shopping center, financially unviable, is now chained and locked. The developer relocated a little supermarket a few roundabouts over, next to what used to be the construction workers' canteen and is now the only restaurant in "town," a warehouse that doubles as a nightclub. The outpatient clinic opens two or three hours a day, while the health center remains a fenced-in lot. The Luz de Yebes school, intended to educate the children of 9,200 families, was left half-built; its developer filed for bankruptcy. Classes are taught in one of the few finished buildings in the complex. There are 214 students, half of them from Valdeluz.
Every time a new business is opened, it's cause for celebration. On the weekends, says Pavel, you can see lots of pregnant women and people walking their dogs; couples who are starting out; or people like them, who are starting over. People on their second marriage, who get the children every other weekend. Pavel's first e-mail was revealing: "After my separation, Valdeluz was a place where I could start over and give my daughters a decent space for a reasonable price." They usually go out riding their bikes or roller skating. There's no danger, thanks to the infinite number of streets closed off to traffic. They go up to the golf club, which they are still allowed to enter without being members, or to Yebes, the municipality to which they belong. "This isn't a ghost town," says the couple. "There is something pleasant about life here that we hadn't anticipated." People greet each other in the street, whether or not they know each other. "It goes beyond just borrowing a bit of sugar. Neighbors develop close relationships. It's like a small town."
Pavel, who works as communications director for a financial institution, created a Valdeluz group in Facebook in 2009. Since then, 300 residents have joined. Members post news and pictures, offer services, organize card tournaments and set up carpools. Transportation is the major obstacle facing the development. Valdeluz was supposed to be a 20-minute train ride from the capital, to which it would be connected by low-cost, high-speed commuter trains. But the commuter train station is still a bed of weeds and most of the trains whiz straight through, cutting through the fog like a knife. No people, no train and if there's no train, people won't come (at least not at the expected rate). New neighbors have moved in at a slow trickle, as the prices have recovered some of the lost equilibrium. According to the latest report put out by the Bank of Spain, Guadalajara is the province where the price of new housing has fallen the most, around 20 percent from its peak. Murcia is second on the list.
The elevator door opens in a building as silent as a meat locker. There are balls of dust in the hallways, flyers on the floor, mailboxes with no names on them. A blond woman aged around 60 steps out with a poodle. She looks up and jumps: "You startled me!" She wasn't expecting to run into anyone. Only three out of the 18 apartments on her staircase are occupied, and there are only 10 residents in the whole building; almost 60 flats are empty. Up until a month ago, the occupants were still hooked up to the electricity and water lines of the construction site. They still don't get any mail, and don't appear on any GPS. At night, the building is like a phantom, with only a couple of lights on the façade. Beyond the roundabout where it sits, all you can see are construction projects, many of them frozen. At one point, this development of 30,000 homes on Murcia's northern sprawl was called "the golden mile." "Prices were sky-high," says Javier Altuna, who lives in the building. Raquel Aparicio, another resident, tries to remember how many neighbors she has. "Once I ran into one..." Finally she says: "This area isn't finished yet." And it won't be, not for a long time. The rate of employment in construction has fallen more in Murcia (52.4 percent) than in any other Spanish region, as have buy/sell transactions (10.4 percent in 2008 and 2009). It is also the region with the biggest surplus of new homes, according to a study by Catalunya Caixa. Over six out of every 100 homes are unfinished and unsold; 13,000 in the city of Murcia, around 50,000 in the entire region.
But as we've already noted, there are many ways to live alone. The Murcian model seems to be an exception. With one's nerves on edge, a noise in the night is disturbing. Noelia Hernández, a 31-year-old teacher who moved to a state-subsidized apartment in Molina de Seguar last October, tells us about the fear she lives with. She's been the only resident here until recently, when she saw a light go on and realized she finally had neighbors: two out of 20; 10 percent of the building's capacity. "You feel alone at night. It's as if I lived in the country." One of the first measures she took was to have bars put on the doors and windows of her ground-floor unit. Her terrace overlooks a vast expanse of land zoned for development; squares of asphalt and palm trees on what used to be an estate full of pomegranate, fig and almond trees. The development is called Los Leandros, and its 2,500 homes don't exist "for the same reasons that all companies cite," according to the spokesperson for Ivercon Reigo, the developer run by the president of the Cartagena soccer club, Francisco Gómez, the same firm that had plans to build a golf city in Navas del Marqués (Ávila). The case has yet to be settled in court.
Jesús Pons, editor of Vega Media Press, an online regional newspaper critical of the get-rich-quick culture in Murcia, offers the following explanation: "Speculation, corruption, blackmail." Around 20 lawsuits have been filed against his publications by developers and construction companies, all of them unsuccessful. Two of them, he says, were filed by Polaris World, a company specialized in residential complexes for Europeans characterized by lines of white homes, golf courses and swimming pools. They started building the last one right before the recession hit, and it was left unfinished: the Condado de Alhama, a giant gated community that now belongs to the consortium of banks and saving banks with which the company renegotiated its debt. The idea was to erect around 30,000 homes on 10 million square meters of land. Philippe Tabone, a 50-year-old Frenchman who spends six months of the year in this inhospitable, empty place, plays golf alone and is philosophical about it: "I've made the best deal in the world. Look what a social club we've got." He points to a heap of cement next to the green. "All this belongs to the banks now."
The sector owes 400 billioneuros to financial institutions all over Spain: "impossible to pay," according to the report by R. R. de Acuña. The credit crunch is strangling everyone, causing unprecedented situations. In one town in the Madrid region, for instance, A. has been living all by himself (with two cats) for an entire year, in a luxurious block where flats cost around 700,000euros. When it was completed, and there were no buyers to be found, the family developer firm that built it had to make some decisions. Since then, A., the developer's 29-year-old son and an employee of the company, has been cleaning the pool, cutting the grass, taking care of the common areas and living in a 150-meter apartment, to keep the place from deteriorating. There is no doorman; A.'s the one who shows the apartments to prospective buyers. Most of them say the same thing: if they manage to sell their home, they'd be willing to buy a flat. But no one is buying and no one is selling; so the apartments remain vacant. Now, A. finally has some neighbors, a couple who moved in on the second floor. Otherwise, the building remains vacant, but safe.
A month ago, The New York Times ran a story on the vandalism that is threatening vacant developments. It told of the fear in a development in Yebes, near Valdeluz, where the few residents "have dogs to scare off strangers." The article was really about how the banks have been acquiring millions of euros in real estate assets that developers and construction companies have been unable to sell. The figures are grim. While the report by R. R. de Acuña estimates 200,000 properties (25 billioneuros), Luis Corral of Foro Consultores Inmobiliarios prefers to say that "it's not easy to count how many have been transferred." He points out two keys to the problem and a solution. "Too many homes have been built. Today, the assets are worth less than the debt that they carry. And the financial system is the only one that can solve the problem by making sacrifices. To recover, losses must be borne." If the estimates of Jesús Encinar, founder of the online real estate portal Idealista.com, are correct, prices will continue to fall up to 30 or 50 percent. It will be a "smooth landing," as the government has said, "but a painful one, like a slow depilation," says Encinar. In many cases, homes will be sold for less than what they cost. But the crisis, he says, may bring good news, like making it easier for young people to move out of their parents' home. "Although considering how much unemployment there is, that seems difficult," he adds.
The million-dollar question is whether or not the population will manage to absorb all of these empty homes. Every day, Juan Valiño, partner of a real estate company in the coastal town of Miño (A Coruña, Galicia), makes it his mission to find a way out. He sells homes in Costa Miño Golf, a development intended for 3,000 people promoted by Martinsa-Fadesa, which in 2008 announced the biggest bankruptcy in Spanish history. Construction was suspended for a time, although little by little it has started back up, and sales have gradually improved. Its occupancy, however, is light years away from what they had expected, especially for the single-family homes: only 80 of the 800 that were planned have been sold. Many of these have been purchased as a second residence, and only about a dozen people live there on a regular basis. "When we moved here, this was a city of bandits," says Ángel Miser, a 36-year-old appliance technician who came in May 2010 with his family. A lover of nature and open spaces, he says: "I wouldn't trade it for the world. I park my car at the house next door and the kids can go outside to play at any hour." The silence and the darkness give the development a neo-rural atmosphere. Just like in many sparsely populated villages, you have to drive for everything, even to buy bread.
According to the urban planner José María Ezquiaga, it's time to rethink urban planning. "Until now, land use legislation was normally designed to grow. We don't have the tools to face a recessive context." As he sees it, we need to increase the density of so much sprawl, complete half-built houses, rezone land zoned for development that's fallen into disuse, bank on collective housing and appraise rents. "The laws don't envisage it, but they didn't envisage this crisis, either." This sociologist, architect and winner of the National Urban Planning Award also points out one thing that we will see coming: the social cost of maintaining basic services in empty places. "Education, transportation, safety, health... having half-vacant and uninhabited neighborhoods is a dramatic situation for municipal treasuries. How are we all going to pay for this?"
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