(I) Empty neighborhoods, sad homes…

17 August, 2011 No Comments

…are what we have inherited from the crisis. They are located in the peripheries of some of the cities in Spain, Ireland, or in the US such as California….. and for other reasons, specialists also have estimated millions of empty homes in China. For example, in California, since homes are built of wood, and therefore their deterioration is faster, public officials proposed the demolition of homes, and reclassify the land as undevelopable land. Talks in Spanish and Irish markets have shared the same idea, although until now, only buildings that are clearly illegal have been demolished.

The remaining homes are considered to be slowly absorbed by the market, because the number of dwellings per thousand inhabitants in both countries is lower than the European average.

Analyzing the problems that raise ghost neighborhoods we see that:

* The majority are groups of homes, either for one or various households, with or without gardens and communal areas, where few people or almost no one live in them.
* Some buildings are near completion while others are under construction, where cranes and building materials are still untouched giving the impression that workers are gone for the weekend and that they will come back on Monday.
* to the small number of buyers that moved there, they were sold the house with the idea that they would get public transportation, shopping centers would be opened, etc … in the best cases they only have minimal water services, electricity and gas…. and often, streets are unfinished.
* The question is, what to do with these empty neighborhoods?…. Because empty homes or unfinished buildings suffer damage; after 6 years plants start to grow, cracks start to appear, concrete begins to break and eventually become inhabitable. The more time passes the more likely it is for them to get destroyed. And, who takes responsibility for the costs that they can generate?
* In Spain, from the coast to the outskirts of big cities, one can see these remains, silent witnesses of the housing bubble that wait for a recovery that does not seem to appear.

People who bought properties in these areas face an uncertain future, where their main concern will not only be to sell or rent the house at some point, but to inhabit it. If we take a look at this picture we see this mega urban development, located in a desert between two highways in the middle of nowhere…

There is a great article published in the WALL STREET JOURNAL, Real Estate, 16/09/10, in regards to this topic. To learn more about the WSJ article: http://online.wsj.com/article/SB10001424052748704476104575439783253733728.html

This article is a research of the Spanish Real Estate market and of the consequences for that will face for the economic recovery.

And in particular, discusses mistakes like the one of the Lugano Tower in Benidorm, which was supposed to be one of the tallest towers in Spain, attracting national and international investors with the promise to build a luxury tower, with glass elevators and magnificent views to the Mediterranean sea. The article gives details about the current state of the building: the windows do not close, there are no glass elevators, and toilets do not work. The serious construction problems have led buyers to make a claim against the developer. This is really the end of the party and period in which us, Spanish people, “thought we were rich”.