When the land serves as support for a new building, its price constitutes, together with the cost of construction and the developer's profit, an important part of the final price of the building. In the case of the second transfer of the building or part of it, it can be considered that its price is made up of the same components as in the new building, since the value of the used building depends on the real estate market, both for new and old buildings. When valuing old buildings, however, the depreciation of the construction must be taken into account. Likewise, we can proportionally decompose the income generated by a property into these three components: construction cost, developer's profit and land value. The part of the unit value of the building that corresponds to the value of the land is called the impact of the land.

Even though the value of the land is a component of the value of the building, as P. Gigosos and M. Saravia say,[2]​ "it is difficult to admit that it is the price of the land that determines the price of the home. Since this is the original product, the one that is demanded. The land is a derived product, and has a residual value. It is the price that the home can achieve in the market that determines the price of the urbanized land, and this the price of the undeveloped land."[3]​.

The valuation of land and real estate depends, among other factors, on their purpose. In Spain, the Land Law applies to valuations carried out for expropriation purposes. For the valuation of properties that serve as collateral for mortgage loans, ECO Order 805/2003 applies.[4]​ The values ​​thus obtained will not necessarily coincide with the market value of the properties.

Unlike buildings, land is not susceptible to physical deterioration or lack of functional adequacy, so its value does not vary according to that of the building. This is a peculiar characteristic of the soil that few goods possess, such as gold. Thus, while in the case of perishable goods the passage of time works against the seller, in areas with a certain economic development it is common for, with the passage of time, the land to increase in value above inflation, which can make saving in the form of land more attractive than in money. That is why land and real estate in general, despite the significant loss of value they can experience during real estate crises, are often considered safe haven values ​​or safe haven assets.[5]​.

A consequence of real estate being considered by its owners, not only as a possible investment, but as a form of savings, is that, even when it is available, they do not necessarily place it on the market when they consider that the situation is not favorable for it, or they do so at prices higher than the market value.[6]​[7]​ This same reduction in supply can be translated into increases in housing prices and rents,[8]​[9]​ unless the Administration compensates for said reduction with sufficient supply. of publicly owned housing.

Privately owned land, like buildings, are immovable assets, that is, linked to the land, not transferable, and therefore, unlike most assets, susceptible to being mortgaged.

The possibility of leasing and thereby obtaining a regular income, although it is not an exclusive property, is very characteristic of real estate, due among other reasons to its high cost, and rare in other types of property.

Another characteristic of land is that it is an essential asset for all citizens, since access to housing depends on it, whether owned or rented, which is why public administrations usually develop land[10]​ and housing[11]​ policies to facilitate said access to people with fewer resources. In this sense, public housing under a social rental regime is preferable to housing on subsidized property, since, in this way, the Administration always maintains ownership of the housing stock, to make it available to citizens.[12]​.

These characteristics of the land, together with the possibilities it offers of requalification, gentrification, deregulation of the mortgage market, speculation and zonal monopolization of certain uses, make the land, the real estate market and infrastructure the object of the investment of enormous capital in search of profit and the cause of the generation of multiple economic crises.

The maintenance or increase in value of real estate, and in particular housing, which is generally of interest to owners,[13]​ including real estate developers, may, furthermore, be incompatible with the existence of an affordable supply sufficient to guarantee the right to housing,[14]​ non-existent in practice in Spain, although guaranteed, on paper, by the Spanish Constitution of 1978[15]​ in its article 47: “All Spaniards have the right to enjoy a home dignified and adequate. The public powers will promote the necessary conditions and establish the pertinent rules to make this right effective, regulating the use of land in accordance with the general interest to prevent speculation. The community will participate in the capital gains generated by the urban planning action of public entities.”.

On the other hand, diffuse urbanization and its lifestyle are, in turn, socially undesirable and generators of large consumption that encourages new investments and causes serious environmental damage. For all these reasons, the urbanization process is carried out, when political decisions are made that allow or encourage it,[16]​ more in accordance with various economic interests than with the needs of the citizenry as a whole. As E. de Santiago says:[10]​ “urbanization has been understood not only or primarily at the service of accommodation needs, but as a simple support for the construction of housing that has become instruments of capitalization or speculation.” According to David Harvey:[17]​ “urbanization plays a particularly active role (along with other phenomena such as military expenditure) in the absorption of the surplus product that capitalists continually produce in their search for surplus value.” “(Urbanization) also has a unique geographic specificity that makes the production of space and space monopolies an intrinsic part of the dynamics of accumulation” “Since 1973 there have been hundreds of financial crises (whereas before they were much less frequent), and a good number of them have been caused by real estate or urban development.” “This suburbanization or 'dispersion to the outskirts' was not just a matter of new infrastructure. As had happened in Paris during the Second Empire, it involved a radical transformation of the way of life, based on the production and marketing of new products... Suburbanization (along with militarization) thus played a decisive role in the absorption of surplus capital and labor in the post-war years, but at the cost of emptying the city centers. and leave them devoid of a sustainable economic base.”.

The relative value of a piece of land in relation to others depends mainly on the possibility of greater or lesser urban use "Use (urban planning)" (more or less built area for a given land area), its more or less central position in relation to the population, the social groups present, the environmental quality, the public services and urbanization in the environment, the employment offer in the area or the proximity to facilities or communication nodes among other reasons.[3]​.

The variation in social, environmental or urbanization conditions, or the authorization of greater urban use of a land in accordance with urban planning, or of uses not authorized until now, may alter its value in relation to that of others. The fair distribution of benefits and burdens among land owners can be achieved in the sectors of developable land that are planned to be transformed into urban areas through reparcelling, as Spanish urban planning legislation has historically required. However, such distribution of burdens and benefits derived from urbanization has never been addressed in Spain at a general level, since the taxes levied on land ownership are not enough to compensate for the benefits or damages derived from the unequal fate that the land may suffer due to changes in social or environmental conditions or decisions by urban planning authorities.

This is especially evident in the benefit that may arise from the authorization of larger buildable areas[3]​ or the reclassification of land that will go from being rural to urban and therefore much more profitable[18]​ (especially when, due to its situation, there were no expectations of such a transformation), despite the transfers and urbanization works to which the owners are obliged. In the case of some Spanish autonomous communities, regional land legislation has made the urban development agent[19][20]​ (real estate developer)[21]​ the beneficiary of the capital gains obtained with these reclassifications to the detriment of the owners, but, regardless of the system planned by each community, and especially during the real estate bubble 1997 – 2007, the reclassification of land has been common in accordance with urban planning agreements that justified assumptions specific modifications of the planning or with ad hoc revisions of the planning, for the benefit of companies promoting large urban development actions[22]​[23]​[24]​ that acquire the land with the purpose of its reclassification, and ultimately, also for the benefit of financial entities.[21]​.

In the words of Jorge Agudo,[25]​ "Since in this matter administrative decisions are dominated by a very wide margin of discretion, land classification has been identified more with a 'lottery' than with an objective and reasonable decision. This 'planning lottery' generates a 'comparison effect' between those who are favored by the administrative decisions and those who see how their property maintains its rustic character and, therefore, remains empty. of profitable uses. As the owners who do not benefit from the urban planning decisions see the heritage content inherent to their right diminished, it is easy to understand that among their main objectives is to ensure that their land goes to the next stage, 'becoming' developable land.".

Thus, Manuel de Solá-Morales suspected[26]​ that the negligence of the Administration in allowing the formation of marginal urbanizations built without a license near the cities was due to an interest in creating capital gains in the intermediate lands and subsequently authorizing their urbanization: "The magnitude of the 'absolute' income generated just by converting the rural land to urban use is so great, and the conditions for the city to orient itself in the direction of those lands are so uncertain, that It is advisable to abstain from a part of that income to reduce the risk of this uncertainty.”

For J. M. Naredo, reclassifications and increases in buildability are an endemic evil of urban planning in Spain:[27]​ "during the Franco regime, planning was often a dead letter that the powerful managed to readapt to their interests. But during democracy, the tenuous barriers of urban planning that conditioned the uses and buildability of the land to what was foreseen in the Plan were further degraded. Well, the changes in the legislation made it easier for this buildability to be agreed upon at a discretionary level outside of planning, allowing the buildability of the land to no longer depend on what was provided for in those public documents that were the municipal plans, but on the power of the buyers and owners of the land to achieve reclassification and obtain capital gains” “in the model exemplified by Spain, the real estate business is based, above all, on the possibility of adding several zeros to the value of the land for the mere fact of building it. urbanizable”.

According to Burriel de Orueta[24]​ “The General Plan has thus lost its deep sense of choice of the territorial model by the representatives of the citizens after a broad public debate and is becoming in many cases a mere coverage and legal legitimation of the previous decisions of the companies.” “In some cases it has even been the companies that have 'generously' carried out or have financed the municipal planning.”.

According to S. Vives and O. Rullan[21]​, regardless of whether regional legislation benefits owners or developers, the final beneficiaries of land rents are financial entities. And financial liberalization, with mortgage securitization, which led to financing from global financial markets, necessary for the promotion and purchase of housing, is the ultimate reason for the drift of Spanish urban planning policy, conditioned by business groups or pressure groups, and for the reclassifications that accompanied the real estate bubble: "it was the financial liberalization reforms that took the initiative and, directly, caused the drift of the Spanish Urban Planning System towards neoliberal approaches" “The borrowed money, although fictitious, flooded the land and urban policy was limited to channeling the floods, either with plans that defended the interests of the owners, or with plans that defended those of the developers.” “We can no longer speak of a social class of urban owners, but of power groups or oligarchic urban lobbies.” “This also means that those who control the real estate market begin to play an active role in the creation of the conditions that allow them to intensify their future income through policies aimed at requalification and urban revaluation.” “Another of the fundamental consequences of the process of land financialization is that through these mechanisms it is not necessary to be the owner of the land, nor even a developer or developer, to appropriate its income.”.

The same lack of equity is manifested, when these lands are expropriated, in the cost that expropriations have for the public treasury in cases in which the legislation establishes fair prices based on market values ​​(as in the case of Land Law 6/1998)[28]​[29]​ which may be inflated due to expectations of revaluation, and be much higher, therefore, than the profitability of those lands at the time of expropriation. As Ildefonso Cerdá said in his General Theory of Urbanization[30]​ in relation to the benefit obtained by the owners with the expropriation of buildings for widening streets "Who ignores the thousand ingenious means put into play by individualism, in order to obtain the greatest possible advantages from the sacrifices made by the municipality or by the State? We will only say that, from this procedure... apart from the enormous economic damages that must be regretted, it has resulted that in the end of most of the road improvements carried out, the benefits obtained by the property are more noticeable than the true satisfaction of the needs of the movement... From all this it follows that everyone has contributed to pay for the urban reforms and improvements that everyone was to enjoy, although some, in a more special, direct and immediate way, in addition to what they were entitled to as an integral part of the public, and that this inequality should not so much be regretted for the iniquity it entails, as for having been an obstacle to the realization of the general and complete transformation of cities”. Cerdá himself had to face this inequity in the management of his Expansion Plan for Barcelona, as Celeste Miranda explains:[31]​ “The city council had to expropriate and financially compensate the owners, and also bear the costs of opening and enabling the new streets... Cerdà stated in the 30 points of his economic Plan, that such an agreement seemed to him 'a leonine contract'. An agreement according to which, all benefits were only for exclusive benefit of the owners”.

Likewise, there is an unfair distribution of burdens and benefits in the assumption of costs and benefits derived from the construction and maintenance of urban infrastructure[32]​[33]​ and in the so-called gentrification processes. The Charter of Athens[34]​ said about the suburbs: "The density of the population is very low there, and the land has hardly been exploited; despite everything, the city is obliged to provide the extension of the suburbs with the necessary services: roads, canals, rapid means of communication, lighting and cleaning, hospital or school services, etc. The disproportion between the ruinous expenses caused by so many obligations and the little contribution that a dispersed population can make to them is surprising." As for to gentrification, as described by Magrinyà, Oliete and Pérez-Foguet,[35]​ "In the case of cities in developing countries, this concept extends to the result of a rapid improvement of the infrastructure of a neighborhood of informal construction. The poorest population, often renters, has to leave the neighborhood due to the increase in prices; the greatest beneficiaries of these operations are the richest owners, who were not initially considered as beneficiaries of the project." Another aspect of the Gentrification, with serious social consequences, and the cause, in part, of the rental bubble in Spain, is the increase in the value of real estate as a consequence of the possibility of change of use that promotes the rise of tourism, such as homes converted into tourist apartments, which are much more profitable. reduced incomes.[39]​.

And there are also cases of illegal buildings or developments that have to be demolished at the expense of the public treasury or whose owners have to be compensated by the Administration as a result of licenses granted against the applicable regulations.[40]​[41]​[42]​[43]​[44]​.

Inadequate planning and negligence on the part of the Administration in controlling compliance with planning, very common in Spain, are also frequently aggravating factors of the damage caused by natural disasters.[45]​[46][47]​.

And finally, the burdens that the owners of land that fulfill very useful environmental functions for society as a whole bear without any type of remuneration are unfair. Although legal mechanisms have been developed in this matter, they have so far been of limited application.[48]​.

Since the situations discussed, and in general any type of improvements derived from decisions and investments of the public administration, as well as the mere concentration of the population in urban areas, generate a surplus value to which the owners or promoters of the land have not necessarily had to contribute, but of which they are beneficiaries (except if through taxes they return that benefit to society), both Karl Marx[49]​ and other non-Marxist economists, such as Henry George[50]​ or Silvio Gesell[51]​ have defended a more or less complete nationalization of the land. This nationalization of the land would not necessarily entail the nationalization of the buildings located on it, but could only consist of the collection by the State of the part of the income that the property is capable of generating corresponding to the value of the land.

Without going so far as to propose the nationalization of land, the Athens Charter,[34]​ in different articles, expresses the need for the public Administration to manage the periphery of cities with sufficient advance notice in order to prevent the emergence of out-of-control buildings that prevent the future expropriation of land at prices compatible with the public interest, necessary for city planning according to rational principles and to have a sufficient supply of housing at affordable prices: “The suburb has been lately incorporated into the scope Administrative. In all its scope, the code, without foresight, has allowed the rights, declared by it to be imprescriptible, to be established. The owner of a plot of land on which a shed, a shed or a workshop has arisen can only be expropriated after multiple difficulties... The Administration must assume responsibility for the management of the land surrounding the city before the birth of the suburbs, in order to guarantee it the necessary means for a harmonious development.” “Numerous parcels of land. They must be expropriated and will be the subject of negotiation. We will then have to be careful with the sordid game of speculation, which so often crushes, as soon as they are born, large companies motivated by concern for the public good. The problem of land ownership and its possible requisition arises in cities, on their periphery, and extends to the more or less large area that constitutes their region.” “For years, urban improvement companies, in all parts of the world, have crashed into the land. petrified statute of private property. The land - the territory of the country - must be available at any time, and be available at its equitable value, estimated prior to the study of the projects. When the general interest is at stake, the land must be mobilizable.” “if the force of things differentiates rich housing from modest housing, there is no right to violate rules that should be sacred, reserving only the benefit of the conditions necessary for a healthy and orderly life. It is urgent and necessary to modify certain uses. A certain degree of well-being must be made accessible to everyone, beyond any question of money, through ruthless legislation. Entire homes must be forever prohibited from being deprived of light, air and space through strict urban regulations.

In line with the urban planning theory in vogue and with various European urban planning experiences,[52]​[53]​[54]​ the Spanish law on land regime and urban planning of 1956[55]​ recognized the convenience of the land intended for the expansion of populations being publicly owned, although it was considered unviable due to the funds necessary for this, among other reasons.

According to S. Vives and O. Rullan,[21]​ until the early 1980s, voices from the “urban planning left” could be heard in favor of the public promotion of all developable land. Some authoritative voice, however, continued to defend the expropriation of land by the Administration (although with private promotion) as a system for urban expansion. J. L. González-Berenguer wrote in 1997:[56]​ "All urban growth land must be transferred to the public sector, planned freely and sold to individuals, with rigid (rigid, but allowing a reasonable profit) regulations on the prices and qualities of the final product. The 1976 Law at one point, and the current Law in three moments already contemplate and regulate this possibility." And he defended the self-financing of the urban planning activity by the Administration expropriating the land destined for urban expansion for its initial value (agricultural value) and selling it at a higher price, thus appropriating the society of the capital gains that it itself generates: "This operation (buying low to sell high, although here it would not be 'selling high', it would just be selling 'more expensive than it was bought'), this operation, I repeat, is or is it not the essential operation of the capitalist system? If it is carried out by individuals, to whom the plan, why can't the Administration, author of the classifications and qualifications of the plan, which are the cause of the revaluation, do it?”.

Since ancient times there has been a spontaneous tendency to concentrate in population centers or in the vicinity of communication nodes due to social, geographical and economic efficiency reasons.[57]​ These advantages that concentration entails mean that in certain areas there is greater demand in relation to the supply of land. The concentration of the population is, furthermore, desirable for ecological, landscape and protection of agricultural or potentially agricultural soil reasons, and the creation of new settlements far from the existing ones is conditioned by the need to extend road access and public service networks from the existing ones, serving each plot. These infrastructures have become increasingly numerous and have greater capacity,[58]​ while other services such as public transport or garbage collection have become essential. All of this makes sustainable territorial planning necessary, which limits the developable land to the environment closest to the existing centers and in proportion to the foreseeable demand based on demographics and the economic situation.

Plots and developable land must, therefore, be relatively scarce, and their prices will depend, in part, on the greater or lesser supply and demand, not only of buildable land, but also of homes or other types of properties, in each part of the territory (situations that are not very comparable constitute, in reality, different markets). However, since the land market does not enjoy the conditions of perfect competition, land prices are not the result of the simple interaction of supply and demand, and the particular characteristics of the land that make it susceptible to being mortgaged mean that, in the absence of correct regulation of the mortgage market, prices can rise enormously without causing demand to stop increasing. Satisfying speculative demand, and especially that generated when the mortgage market is not correctly regulated, is, in general, incompatible with sustainable urban planning and territorial organization.

The shortage of housing or land available for construction, whether due to legal prohibition or the existence of speculative practices by operators who monopolize large areas of land, but who do not build to generate an artificial shortage, as the Spanish land law of 1956 warned,[59]​ can cause an increase in real estate prices.

Ildefonso Cerdá already said of the walled cities of his time:[60]​ "The lands circumscribed by the walls enjoy the privilege of building in direct, immediate and unjustifiable damage and harm in addition to the exterior lands. And this privilege represents a monopoly on habitability, dispensed without any plausible reason to the fortunate owners of the building lands, a monopoly whose tyrannical force is felt in the market for rooms whose prices rise. at the will of the monopolizers.”.

In circles close to neoliberalism, the increase in land and housing prices is also attributed to the shortage of buildable land,[61]​ but ignoring the hoarding of large areas of land for speculative purposes by those with large capital, such as large developers and financial entities,[62][63][64][65] and proposing as a solution, just as they do for any perishable good with very different characteristics, deregulation. or land liberalization,[66]​ that is, the authorization to build in the largest possible part of the territory, even if that territory is far from any population or facilities, lacks road access or public service networks.

In the 1990s, some Spanish political groups blamed high housing prices on a supposed shortage of buildable land, an idea that resonated with a large part of the population thanks to the support of various institutions and its media dissemination,[67]​[21]​[68]​ while others blamed it on the speculative retention of land, for which they proposed giving priority to real estate developers over owners when appropriating of the capital gains generated with the reclassification of the land.[69]​.

Finally, both conceptions were reflected in the laws.[67]​ The land legislation of some autonomous communities gave primacy to the “Development Agent” (the promoters)[20]​ over the owners in the appropriation of capital gains, and the Royal Decree-Law 5/1996,[70]​ the Land Law 6/1998[71]​ and the Royal Decree-Law. 4/2000[72]​ they carried out land liberalization. And although the rulings 61/1997[73]​ and 164/2001[74]​ of the Constitutional Court "Constitutional Court (Spain)") recognized the powers in matters of urban planning of the autonomous communities, as Burriel de Orueta says:[24]​ “Although the Constitutional Court Ruling of 2001 made it clear that this issue was the responsibility of the Communities Autonomous, those of conservative government transferred the concept of 'everything developable' to their autonomous law practically to the letter, and even went further.” And the urban plans approved until then were altered in an unorthodox way to convert land that until then was not developable:[24]​ “This lack of respect for municipal planning has allowed an unplanned, accelerated and massive urbanization of non-developable land, precisely the land that municipal planning had decided to exclude from the urbanization process.”.

All this did not prevent, however, the speculative retention of land with greater expectations of revaluation from continuing to occur:[24]​ “the availability of developable land in planning has not acted as a limiting element of the quantity or territorial location of urban development, because almost all demand has been satisfied on non-developable land.” And according to P. Gigosos and M. Saravia,[2]​[75]​“There has never been a shortage of classified land, but there has only been interested in its incorporation into the urban planning process (and in perfectly calculated and selective doses) when housing prices have skyrocketed.” According to J. L. González-Berenguer[76]​ "the banks have bought at agricultural prices many hundreds of millions of square meters (it is authoritatively said that between 350 and 400 million), they retain them as an asset that is always revaluable and easily realizable, and they sell them when they are at a good price, either to external developers or to their own promoters, and they do it to build where and when it suits them.”

Likewise, it is common for new housing developments, especially if they are large, to only be put on the market very progressively, since the increase in supply that would otherwise occur would force their developers to lower prices, while the rise in housing prices that normally occurs over time helps to make their investment profitable.[3]​.

However, the speculative retention of developable land and housing does not in itself explain, given the amount of previously non-developable land built, the high land prices reached during the Spanish real estate bubble in the early years of the millennium, but we must consider, above all, the enormous increase in demand due to the exaggerated granting of high-risk mortgages.[77]​ Likewise in the United States and Ireland[78]​, real estate bubbles related to the granting of junk mortgages or subprime credit.

Increasing the area of ​​buildable land to compensate for its hoarding for speculative purposes or simply to increase supply and thereby lower real estate prices results in a less compact and, therefore, unsustainable urbanization. According to Roberto Camagni,[57]​ "under careful observation must be not the city as such... but some highly relevant trends that involve the city itself and that endanger its primary role as a seat of social interaction, creativity and (relative) collective well-being. I am referring to the processes of disordered and unlimited growth that the city often suffers in periods of economic takeoff and rapid industrialization. I am referring to the recent processes of diffuse urbanization that have been called interchangeably as ´metropolitanization´, ´peri-urbanization´, ´urban sprawl´, ´ville eclatée´, ´edge-city development´: processes that have made the conceptual distinction between city and countryside empirically ambiguous, leading us towards a non-city and a non-country; automobile.”.

Aside from the non-compliance with planning[27]​ and land legislation[79]​ common in Spain, since the first land laws, attempts have been made to bring rationality to the planning of the territory. The aforementioned law on land regime and urban planning of May 12, 1956[59]​ warns of the problem of “The retention of land by owners who do not develop or build, nor agree to sell their land, to develop and build, at fair estimate prices”, for which it establishes the need for local corporations to “gradually acquire land that can serve as price regulators in the land market” and “the configuration of unfavorable situations for those who do not decide to act in accordance with the public interest... With this purpose, a non-fiscal tax on substandard construction is created, which will fall on unbuilt plots in the center of the town.” Therefore, this law did not propose any type of land liberalization, but rather the intervention of the public administration with a decided land policy.

In said law of 1956[59]​ it also says “Traffic over land does not operate, on the other hand, in a regime of perfect competition, in which it can be said that the economic law of the market naturally determines a fair price that legitimately excludes all intervention”. Perfect competition is understood as a series of conditions that make price manipulation impossible, so that it is the interaction of supply and demand that determines the prices of products. In this way, according to neoclassical economists, simply thanks to free competition the market regulates itself, maintaining a moderate price level and making the intervention of the public administration in the economy unnecessary.

But effectively, these conditions do not exist in the land market. According to Dolores Aguado,[80]​ “Unlike other markets, real estate is often not a balanced market (we currently have the best example of this with the existence of a strong stock of unsold homes and a high unsatisfied demand), it is not transparent (except for housing, there is no statistical series of price evolution and the land market is probably a good example of an opaque market), it is strongly localist (urbanized land must be consumed wherever it is produced, therefore there may be demand where there is not enough land to cover it and there may be supply in municipalities where there is no demand), it is inefficient (the increase in supply does not produce a price reduction and, furthermore, the number of comparables, even at times of greatest number of transactions, is very scarce compared to the total universe), it is rigid (a change in demand takes a long time to be incorporated into the new supply).”.

Thus, for example, central land, the most requested, is limited and difficult to increase.[81]​ Furthermore, its creation through gentrification has negative social effects, by displacing businesses and the pre-existing population, while in the newly created peripheral neighborhoods, large shopping centers perform the function of creating centralities, but at the cost of creating a monopoly on commercial use and annihilating street life in streets devoid of shops.

Nor does there exist in the land market the condition of the necessary existence of a large number of sellers that means that none of them can exert an appreciable influence on prices, since there are few holders of sufficient capital to acquire large extensions of land around towns and to maintain the property for years or decades while waiting for the demographic conditions, the favorable economic circumstances (whether they arise or caused by those same speculators) and its convenient reclassification, to put it on the market and obtain enormous capital gains. Thus limiting the supply mainly to relatively small plots and forming oligopolies[62][63][64]​ on these peripheral lands. For this reason, the aforementioned law[59]​ defended the intervention of the public administration by providing for the constitution of municipal land assets that "may be transferred for building or applied to the purposes provided for in the plan."

Despite providing for the regulation of the land market through the aforementioned municipal assets and measures against speculation, the 1956 land law recognized its insufficient scope when it declared: "If the ideal in the urban planning enterprise could be that all the land necessary for the expansion of populations were public property, through fair acquisition, to offer, once urbanized, to those who wish to build, the solution, however, is not viable in Spain. It would require extraordinary funds. substantial, which cannot be diverted from other national objectives, and would cause serious losses to private property and initiative.” This is consistent with the land valuations established by the law itself because, although it admits that “the acquisition of land to form land reserves may be carried out through expropriation”, the law establishes different types of land valuation, among which is the expectant value, which assigns a value to the land according to its potential for future use. urban planning. This expectant value is what the law applies, among other areas, to “rural lands that, according to article eighty-seven, offer appreciable prospects for development or urban use”.

In the consolidated text of the Law on Land Regime and Urban Planning of 1976[82]​ the expectant value disappears and non-developable land is valued according to its initial value (value as an agricultural exploitation or similar) and developable land according to its urban planning value. However, Law 8/1990 on reform of the urban planning regime and land valuations[83]​ says of the previous law that “it has proven insufficient (…) to increase public land assets to a sufficient extent to influence the regulation of the real estate market or to allocate surfaces of developable land to the construction of officially protected housing.”” Therefore, it alters the previous criteria, so that now “the initial value applies to both non-developable and non-developable land programmed; even the programmed urban development, if the development of the precise planning has not yet been completed, is valued by reference to this initial value.” And establishes “the application of these valuation criteria to all expropriations carried out by public powers”. It also specifies that "as regards land assets, the clearly established possibility of resorting to the expropriation of non-urbanizable land for its incorporation into them must be highlighted."

This initial value established by the Spanish land law of 1990 is in line with the profitability of the land to which it is applied at the time of expropriation, since they still do not have authorization to build. That same value is what an appraisal carried out to request a mortgage loan would assign to them, in accordance with ECO regulations 805/2003.[4] Their market value, however, could be higher if potential buyers had the expectation that said lands were not going to be expropriated and that they would have a certain buildability granted by the planning. When this case actually occurs, the owner, after executing the urban facilities and making the transfers of part of the land required by law, acquires the right to build on the remaining land, which, being now urban and generally located in the vicinity of a town, will acquire in the land market a value multiple of the initial one,[18]​ and the higher the greater its buildability, a value that the owner will impact on the price of the homes or properties built on it. him.

Thus, with this law, the administration was provided with the means to acquire land at reduced prices, to later sell it and control its construction under conditions that would allow quality housing to be offered at moderate prices or rents. This supply, when it is abundant, also moderates, due to the simple tendency towards a balance between competition, the price of housing built on privately owned land.[84] However, in order to expropriate the land intended for the expansion of cities due to its agricultural value, these lands must be effectively rural, so it is essential that cities and other population centers are well delimited, and that outside these limits any non-rural use is very strictly regulated.

There is controversy, however, about the free transfer, also provided for in the successive land laws, of a small percentage of the use of developable land for its incorporation into the municipal land assets, since some authors consider that it only serves to increase the price of housing. the so-called municipal land assets or set of publicly owned land, to influence the land market, selling them in times of scarcity and retaining them when there was an oversupply, in order to maintain prices within stability parameters... the chronic insufficiency of local estates has often led to their use for purposes different and contrary to those prefigured by the laws. For example, instead of applying them to influence, in accordance with their institutional mission, the land market, they are often used. They sell to the highest bidder and at the highest possible price to raise resources for a meager municipal treasury.*”.

“The reform of the land market in the sense of greater liberalization that increases its supply”, which the Spanish law 6/1998 on the land regime and valuations,[71]​ according to its own statement of reasons, intended, represents the sacrifice of the rational planning of the territory, without thereby achieving the expected lowering of the land.

Far from what the 1990 law advocated: “A firm action by the competent Administrations, assuming a clear role in the adoption of decisions on the spaces that should be urbanized and those that should be kept out of this process based on general planning criteria defined in the planning (and not as a mere response to isolated initiatives of individuals)”, the Land Law of 1998[71]​ aspired to “facilitate the increase of the supply of land, making it possible that all the land that has not yet been incorporated into the urban process, in which there are no reasons for its preservation, can be considered as susceptible to being urbanized”. The success of liberalization seems to depend on the extent of developable land (especially between the approval of Royal Decree-Law 4/2000[72]​ and its modification by Law 10/2003):[86]​[87]​ “In that large developable land that, following this criterion, the plans delimit…”. And the prominence of the land owners (although the land legislation of some autonomous communities gave primacy to the development agents over the owners):[20]​ “The owners of land classified as developable will have the right to promote its transformation by urging the Administration to approve the corresponding development planning, in accordance with what is established by the urban legislation.”.

With this, the legislator intends that the planning foresee such a large extension of the urbanization as to cover all the land that does not have any exceptional peculiarity that justifies its protection, regardless of what the demographic conditions, the existing infrastructures or the purchasing power of the families make advisable, but without this forecast having any real semblance of reality, since the distinction between the scheduled and unscheduled developable land has been eliminated, and thus the execution deadlines for the urbanization,[76]​ all citizens are left at the expense of the owners of all that large expanse of land deciding to develop it or retain it until it is revalued to their convenience. As E. de Santiago says about the case of Madrid:[87]​ “in reality the Madrid territorial model ―in full coherence with the neoliberal ideology― is that there is no model, a blank piece of paper.” The infrastructures necessary to allow this dispersion over the territory[88]​ (and other unnecessary ones)[89]​ constituted a substantial business for the construction companies concessionaires of the works at the expense of the public treasury and were, in addition, a source of corruption.[90]​.

Thus, we returned to the assumptions of developmentalism that had characterized the last decades of the Franco dictatorship. Although circumstances had changed, the 1998 Land Law recalls what Fernando de Terán said about a previous study of Madrid's planning in the 1970s:[91] "it renounced containing and limiting the growth of Madrid, offering for the first time open and unlimited planning. It was not just a confession of impotence. In reaction, it went to the opposite extreme, accepting and magnifying growth... It was the time of optimistic expectations of unlimited economic development and planning. It was prodigal in proposing large expansions supported by large infrastructures for many millions of new inhabitants.” The consequences of this model had been “a clear permissiveness regarding the requirement of acceptable conditions of infrastructure and social facilities, as well as the possibilities of urbanizing outside the plan's provisions.”.

The liberalization of land also has the consequence that the possibility of building almost anywhere in the territory creates the generalized expectation of materializing that possibility at some point even in the most unsuitable places for it, which causes each owner to raise the price at which he is willing to offer those lands, thus making the land that can be dedicated to other uses, such as agriculture, [92]​[93]​[94]​ more expensive, with the consequent loss of competitiveness of agricultural products. This, in turn, increases the cost of the expropriations necessary to implement new infrastructures by virtue of this general increase in the cost of land and the new type of valuation provided for in this law even for land classified as rural (market value obtained by comparison), with the increase in public spending that this implies.[95]​ The lack of planning that the law seems to encourage will only add even greater difficulty to the implementation of future infrastructures and an increase in the cost of the expropriations necessary for its execution.

Although the same law[71]​ declared certain lands undevelopable "due to their landscape, historical, archaeological, scientific, environmental or cultural values, natural risks accredited in the sectoral planning, or based on their subjection to limitations or easements for the protection of the public domain", the important income that urbanization and construction meant for the town councils in the form of building permits,[96]​[97]​[98]​ the pressure from development companies and the neighbors themselves in the face of what appeared to be a development opportunity,[24]​ and urban corruption, which in many cases brought together the interests of municipal councilors and developers driven by the great demand and high prices of housing, meant that these requirements were not always met[99]​[42][100]​ during the years of the real estate bubble, after the approval of the law, having to regret the destruction of valuable environments from the point of view ecological, landscape or environmental.

Likewise, the law provided that when urban planning actions were promoted, "the promoter would ensure the execution, at his own expense, of the connection infrastructures with the general systems that the nature and intensity of said actions demand in each case and, even, the reinforcement and improvement of said general systems when this was necessary." The connection with the general systems also suffered in cases of illegal or improvised developments on reclassified land,[101]​[102][103]​[104]​ and in terms of the reinforcement of the general systems by the promoters, it is generally unfeasible, since the general systems,[105]​ by definition, are those that serve the entire population, and if their lack of capacity occurs, this is not Attributable, in general, to an isolated action, nor can these general systems be reinforced simply by adding that additional capacity, but rather they must be sized and built to serve the entire population and its foreseeable increase on a lasting basis. But each urban development has an impact on the general systems as a whole, and the sum of a certain number of isolated urban actions can entail a cost for society as a whole by making reservoirs,[106]​[107]​ electrical infrastructure,[108]​ water supply, sewage and purification infrastructure,[109]​ roads[33]​ or railways,[110]​ and facilities such as schools[111]​ or health centers[112]​ that served the primitive population. These larger infrastructures that the sum of different urban actions suggest are necessary to supply the entire population can, in addition, ultimately become oversized[107]​ when the supply of housing responds to a demand based on the excessive granting of mortgages, so that a large part of them will ultimately remain uninhabited, either because they are not sold or rented, or because their occupants are evicted, as happened during the Spanish economic crisis of 2008-2014, after the burst of the real estate bubble in Spain.[113][114]​.

In contrast to the neoliberal conception made only, apparently, from the perspective of the land or housing applicant (and without analyzing whether they are sought for habitation or only as a form of savings or investment), which states that a free location should be possible at any point in the territory, barely regulated urban planning, to minimize the cost of the land, there are much more holistic conceptions in which it is considered that the territory must be subject to urban planning regulation that guarantees access to housing while taking advantage of the synergies and economies of scale that the concentration of the population entails,[57]​ the benefits and burdens of urbanization are equitably distributed, the environment and agriculture are protected, and other advantages of the compact city are obtained, such as greater social cohesion, the optimization of the operation of public transport, less dependence on the private vehicle and the consequent decrease in pollution, the reduction of the costs of construction and maintenance of infrastructure and urbanization works and the provision of public services and the improvement of efficiency energy.[115]​[116]​[117]​ This is recognized by the subsequent land law 8/2007:[118]​ “The European Union proposes a compact city model and warns of the serious drawbacks of dispersed or disorderly urbanization: environmental impact, social segregation and economic inefficiency due to high energy costs, construction and maintenance of infrastructure and provision of public services.”.

Behind the apparent absurdity intended by the 1998 Land Law of providing for an almost unlimited extension of urbanized space regardless of what demographic conditions, existing infrastructure or the purchasing power of families make foreseeable or advisable, hides the fact that the purchasing power of the population can be increased artificially thanks to easy mortgage credit and some other mechanisms that induce families to go into debt. Simultaneously, the bank must finance real estate developers, who will provide the supply, to ensure the continuous flow of capital, thus laying the foundations for the speculative bubble.

Privately owned buildings and land are real estate, and the land, furthermore, is not susceptible to destruction or deterioration. This makes them suitable as collateral for the creation of mortgages and causes the land and real estate market in general to behave very differently from that of other assets if the mortgage market is not adequately regulated,[119]​ which implies public control of the appraisal companies that value real estate and the setting of a maximum amount of credit granted in relation to the appraised value of the mortgaged properties, among other measures.

Everything seems to indicate that the mortgage market in Spain during the years of the real estate bubble lacked sufficient regulation.[120] It was common to obtain mortgage loans for 100% or more of the appraised value of the homes and appraisal companies, linked to the banks or highly dependent on them as they were their almost exclusive clients, frequently overvalued the properties.[121]​[122]​.

This deregulation of the mortgage market, along with many other factors, such as the poor housing policy that barely promoted public housing and social rentals,[123]​[27]​[11]​ the drop in mortgage interest rates,[124]​ the tax relief for the purchase of homes,[124]​ the increase in the population due to immigration,[125]​ the low profitability of investment in the industry and in the different markets international relations, the adoption of the euro,[76]​ with the laundering of black money that it entailed, and the increase in employment based on the boom of the construction sector itself and the circulation of credit money (although publicized as a success for the Spanish economy),[126]​[127]​[128]​ encouraged many families to go into debt[129]​ who, suddenly, could access a home to own even without having savings.

The strong demand based on easy mortgage credit, together with the overvaluation of real estate by the appraisal companies and the other factors mentioned, together with a supply that grew at a slower rate, due to the rigidity of the real estate market,[80]​ and the speculative retention of land,[2][76]​ caused housing prices to rise in Spain, which gave a new incentive for many others, incited by the idea of a revaluation of their heritage, or out of mere speculative desire, did the same, thus creating a vicious circle according to which the increase in the sale of homes and the increase in their price followed each other, regardless of the amount of developable land provided for by the planning, and contrary to what was said to be intended with the land liberalization introduced by Law 6/1998.[71] Meanwhile, successive governments and banks, among others, denied the existence of any real estate bubble.[130]​.

In this way, between 2004 and 2008, four million mortgages were created in Spain.[77]​ In each of the years 2003, 2004, 2005 and 2006, more homes began to be built in Spain than in Germany and France combined,[131]​ and between 2002 and 2007 the price of housing doubled.[132]​ To grant that extraordinary amount of credit, in order to obtain an enormous benefit in terms of interest, the Spanish bank had to resort to large sums of money in loans that, in turn, were granted by the banks of other countries.[133][134] It should also be noted that, according to Spanish legislation, the delivery of the property to the financial entity that granted the mortgage did not necessarily pay off the debt, which is why, after the burst of the real estate bubble, and the collapse of property values, real estate, many Spaniards, in addition to losing their homes, had to bear enormous debts with banks and savings banks.[135]​.

Apart from interbank loans, another technique that enabled the growth of the Spanish real estate bubble through the refinancing by foreign investors, mainly European pension funds, of the enormous number of mortgages granted, was the so-called securitization,[21]​ which converts packages of mortgages into bonds with the highest credit rating. If the competent Spanish authorities, the Bank of Spain and the Ministry of Economy, had limited this technique,[136]​ as the authorities of other countries such as Australia and Canada did, the number of mortgages would have been reduced and therefore the pressure of demand on housing prices in Spain.

The subprime mortgage crisis in the United States made European and American banks distrust each other in the solvency of their competitors, drastically limiting the credit granted and cutting off the source of financing[137]​[138]​ that fueled the real estate bubble in Spain, leading to a decline in home sales,[113]​ to the crisis of the real estate sector, also indebted to banks,[139]​[140]​ to the increase in unemployment,[141]​ and non-payment of part of the mortgage debts[77]​ and the resulting evictions.[114]​.

As a result of the real estate bubble and the subsequent crisis, Spanish private debt, the sum of that of families, companies and banks, constituted in 2012 83.5% of the total Spanish debt, which was four trillion euros[142]​ (four times the GDP). In 2014 there were 3.4 million empty homes in Spain,[113]​ more than in any other country in Europe, and evictions were in the hundreds of thousands since the start of the crisis.[114]​.

In conclusion, the disproportionate increase in the price of housing between 1998 and 2008 was parallel to the excessive increase in the granting of mortgages, and the decrease in the price of housing[143]​[144]​[145]​[146]​ from 2008 to 2014 was equally parallel to the difficulty of obtaining credit in those years,[147]​ confirming the ease of obtaining mortgage credit, together with the previously mentioned factors[148]​[149]​ that induced the population to go into debt when purchasing homes, the causes that explain the rise and fall in housing and land prices produced in both periods.

During the Spanish economic crisis (2008-2014) "Spanish economic crisis (2008-2014)"), financial institutions became owners of a large number of properties as a result of evictions.[150]​[151]​ As had already happened in previous decades, legislative reforms, together with the shortage of social rental housing,[123]​ decisively encouraged the formation of a new bubble real estate in big cities.

In 2009, the figure of the Listed Joint Stock Investment Company in the Real Estate Market, SOCIMI, was created, investment companies that obtain their income from the rentals of their real estate properties. The reform, in 2012, of its regulatory legislation, which among other advantages grants them tax privileges that are added to those already existing for the rental of housing,[81]​ and Law 4/2013,[152]​ which modifies the Urban Leases Law,[153]​ reducing the minimum lease term and other rights of tenants, encourages investment funds to purchase real estate assets in the hands of the banking[154]​[155]​[156]​[157]​ and social rental housing privatized in 2013 by the City Council and the Community of Madrid.[38]​ The same SAREB, the so-called bad bank, to which financial entities transferred part of their real estate assets, in addition to selling properties to investment funds,[158]​ will create its own SOCIMI.[159]​.

Due to the amount of real estate they monopolize, investment funds form oligopolies and can influence the real estate market according to their convenience. Apart from this, their strategy consists of rehabilitating entire buildings, imposing premiums on other owners, if any, in order to drastically raise rents[160]​ and maximize their profits.[161]​[162]​[163]​ This often leads to evictions for non-payment of rent,[164]​ and real estate harassment of those tenants covered by old leases who cannot raise rents. income.[165]​.

But the rise in rents is also contributed by, on the one hand, the increase in the demand for rental housing due to the limitation of mortgage loans granted to a precarious population as a result of the economic crisis, and on the other, the reduction in residential supply in the center of the main cities derived from the conversion of homes into tourist apartments, much more profitable, fostered by the rise of tourism,[166]​ which translates into the gentrification of central neighborhoods and the expulsion of its original population to the outskirts, where rents also rise as a result of the increase in demand.[167]​.

During these years, some Administrations and especially the most affected town councils took measures to combat the causes of the increase in rents,[168]​[169]​[170]​[171]​ with great opposition from other administrations,[172]​[173]​ parties[174]​ and economic agents,[175]​ and legal actions aimed at reversing possible abuses in this sector multiplied. scope.[176]​[177]​[178]​[36]​[37]​ The PSOE government also promoted the approval of Royal Decree-Law 7/2019,[179]​ with various measures in the same sense, without including the possibility of limiting rental prices in some areas, as demanded by the parties to its left.[180]​ According to the Bank of Spain, average rental prices rose by 50% in Spain between 2014 and 2019.[181]​.

In the spring of 2023, Law 12/2023 was approved for the right to housing,[182]​ the first Spanish law that allows autonomous communities and City Councils to establish limitations on rental prices in areas where the market is considered stressed, in addition to other measures to protect tenants and the public housing stock, and to establish surcharges and tax reductions to discourage the maintenance of empty homes and stimulate rentals at moderate prices, and the Government announced two measures related to housing: the granting of ICO guarantees to young people and families with minor children to obtain mortgage loans, a measure already applied by the right in the autonomous communities where it governs,[183]​ rejected by the left-wing parties,[184]​ including the minority partners of the coalition, and applauded by the banks,[185]​ and the development of 183,000 public rental homes affordable,[186]​ which was qualified by the Government itself[187]​ and generally received with skepticism.[188]​.

When the land serves as support for a new building, its price constitutes, together with the cost of construction and the developer's profit, an important part of the final price of the building. In the case of the second transfer of the building or part of it, it can be considered that its price is made up of the same components as in the new building, since the value of the used building depends on the real estate market, both for new and old buildings. When valuing old buildings, however, the depreciation of the construction must be taken into account. Likewise, we can proportionally decompose the income generated by a property into these three components: construction cost, developer's profit and land value. The part of the unit value of the building that corresponds to the value of the land is called the impact of the land.

Even though the value of the land is a component of the value of the building, as P. Gigosos and M. Saravia say,[2]​ "it is difficult to admit that it is the price of the land that determines the price of the home. Since this is the original product, the one that is demanded. The land is a derived product, and has a residual value. It is the price that the home can achieve in the market that determines the price of the urbanized land, and this the price of the undeveloped land."[3]​.

The valuation of land and real estate depends, among other factors, on their purpose. In Spain, the Land Law applies to valuations carried out for expropriation purposes. For the valuation of properties that serve as collateral for mortgage loans, ECO Order 805/2003 applies.[4]​ The values ​​thus obtained will not necessarily coincide with the market value of the properties.

Unlike buildings, land is not susceptible to physical deterioration or lack of functional adequacy, so its value does not vary according to that of the building. This is a peculiar characteristic of the soil that few goods possess, such as gold. Thus, while in the case of perishable goods the passage of time works against the seller, in areas with a certain economic development it is common for, with the passage of time, the land to increase in value above inflation, which can make saving in the form of land more attractive than in money. That is why land and real estate in general, despite the significant loss of value they can experience during real estate crises, are often considered safe haven values ​​or safe haven assets.[5]​.

A consequence of real estate being considered by its owners, not only as a possible investment, but as a form of savings, is that, even when it is available, they do not necessarily place it on the market when they consider that the situation is not favorable for it, or they do so at prices higher than the market value.[6]​[7]​ This same reduction in supply can be translated into increases in housing prices and rents,[8]​[9]​ unless the Administration compensates for said reduction with sufficient supply. of publicly owned housing.

Privately owned land, like buildings, are immovable assets, that is, linked to the land, not transferable, and therefore, unlike most assets, susceptible to being mortgaged.

The possibility of leasing and thereby obtaining a regular income, although it is not an exclusive property, is very characteristic of real estate, due among other reasons to its high cost, and rare in other types of property.

Another characteristic of land is that it is an essential asset for all citizens, since access to housing depends on it, whether owned or rented, which is why public administrations usually develop land[10]​ and housing[11]​ policies to facilitate said access to people with fewer resources. In this sense, public housing under a social rental regime is preferable to housing on subsidized property, since, in this way, the Administration always maintains ownership of the housing stock, to make it available to citizens.[12]​.

These characteristics of the land, together with the possibilities it offers of requalification, gentrification, deregulation of the mortgage market, speculation and zonal monopolization of certain uses, make the land, the real estate market and infrastructure the object of the investment of enormous capital in search of profit and the cause of the generation of multiple economic crises.

The maintenance or increase in value of real estate, and in particular housing, which is generally of interest to owners,[13]​ including real estate developers, may, furthermore, be incompatible with the existence of an affordable supply sufficient to guarantee the right to housing,[14]​ non-existent in practice in Spain, although guaranteed, on paper, by the Spanish Constitution of 1978[15]​ in its article 47: “All Spaniards have the right to enjoy a home dignified and adequate. The public powers will promote the necessary conditions and establish the pertinent rules to make this right effective, regulating the use of land in accordance with the general interest to prevent speculation. The community will participate in the capital gains generated by the urban planning action of public entities.”.

On the other hand, diffuse urbanization and its lifestyle are, in turn, socially undesirable and generators of large consumption that encourages new investments and causes serious environmental damage. For all these reasons, the urbanization process is carried out, when political decisions are made that allow or encourage it,[16]​ more in accordance with various economic interests than with the needs of the citizenry as a whole. As E. de Santiago says:[10]​ “urbanization has been understood not only or primarily at the service of accommodation needs, but as a simple support for the construction of housing that has become instruments of capitalization or speculation.” According to David Harvey:[17]​ “urbanization plays a particularly active role (along with other phenomena such as military expenditure) in the absorption of the surplus product that capitalists continually produce in their search for surplus value.” “(Urbanization) also has a unique geographic specificity that makes the production of space and space monopolies an intrinsic part of the dynamics of accumulation” “Since 1973 there have been hundreds of financial crises (whereas before they were much less frequent), and a good number of them have been caused by real estate or urban development.” “This suburbanization or 'dispersion to the outskirts' was not just a matter of new infrastructure. As had happened in Paris during the Second Empire, it involved a radical transformation of the way of life, based on the production and marketing of new products... Suburbanization (along with militarization) thus played a decisive role in the absorption of surplus capital and labor in the post-war years, but at the cost of emptying the city centers. and leave them devoid of a sustainable economic base.”.

The relative value of a piece of land in relation to others depends mainly on the possibility of greater or lesser urban use "Use (urban planning)" (more or less built area for a given land area), its more or less central position in relation to the population, the social groups present, the environmental quality, the public services and urbanization in the environment, the employment offer in the area or the proximity to facilities or communication nodes among other reasons.[3]​.

The variation in social, environmental or urbanization conditions, or the authorization of greater urban use of a land in accordance with urban planning, or of uses not authorized until now, may alter its value in relation to that of others. The fair distribution of benefits and burdens among land owners can be achieved in the sectors of developable land that are planned to be transformed into urban areas through reparcelling, as Spanish urban planning legislation has historically required. However, such distribution of burdens and benefits derived from urbanization has never been addressed in Spain at a general level, since the taxes levied on land ownership are not enough to compensate for the benefits or damages derived from the unequal fate that the land may suffer due to changes in social or environmental conditions or decisions by urban planning authorities.

This is especially evident in the benefit that may arise from the authorization of larger buildable areas[3]​ or the reclassification of land that will go from being rural to urban and therefore much more profitable[18]​ (especially when, due to its situation, there were no expectations of such a transformation), despite the transfers and urbanization works to which the owners are obliged. In the case of some Spanish autonomous communities, regional land legislation has made the urban development agent[19][20]​ (real estate developer)[21]​ the beneficiary of the capital gains obtained with these reclassifications to the detriment of the owners, but, regardless of the system planned by each community, and especially during the real estate bubble 1997 – 2007, the reclassification of land has been common in accordance with urban planning agreements that justified assumptions specific modifications of the planning or with ad hoc revisions of the planning, for the benefit of companies promoting large urban development actions[22]​[23]​[24]​ that acquire the land with the purpose of its reclassification, and ultimately, also for the benefit of financial entities.[21]​.

In the words of Jorge Agudo,[25]​ "Since in this matter administrative decisions are dominated by a very wide margin of discretion, land classification has been identified more with a 'lottery' than with an objective and reasonable decision. This 'planning lottery' generates a 'comparison effect' between those who are favored by the administrative decisions and those who see how their property maintains its rustic character and, therefore, remains empty. of profitable uses. As the owners who do not benefit from the urban planning decisions see the heritage content inherent to their right diminished, it is easy to understand that among their main objectives is to ensure that their land goes to the next stage, 'becoming' developable land.".

Thus, Manuel de Solá-Morales suspected[26]​ that the negligence of the Administration in allowing the formation of marginal urbanizations built without a license near the cities was due to an interest in creating capital gains in the intermediate lands and subsequently authorizing their urbanization: "The magnitude of the 'absolute' income generated just by converting the rural land to urban use is so great, and the conditions for the city to orient itself in the direction of those lands are so uncertain, that It is advisable to abstain from a part of that income to reduce the risk of this uncertainty.”

For J. M. Naredo, reclassifications and increases in buildability are an endemic evil of urban planning in Spain:[27]​ "during the Franco regime, planning was often a dead letter that the powerful managed to readapt to their interests. But during democracy, the tenuous barriers of urban planning that conditioned the uses and buildability of the land to what was foreseen in the Plan were further degraded. Well, the changes in the legislation made it easier for this buildability to be agreed upon at a discretionary level outside of planning, allowing the buildability of the land to no longer depend on what was provided for in those public documents that were the municipal plans, but on the power of the buyers and owners of the land to achieve reclassification and obtain capital gains” “in the model exemplified by Spain, the real estate business is based, above all, on the possibility of adding several zeros to the value of the land for the mere fact of building it. urbanizable”.

According to Burriel de Orueta[24]​ “The General Plan has thus lost its deep sense of choice of the territorial model by the representatives of the citizens after a broad public debate and is becoming in many cases a mere coverage and legal legitimation of the previous decisions of the companies.” “In some cases it has even been the companies that have 'generously' carried out or have financed the municipal planning.”.

According to S. Vives and O. Rullan[21]​, regardless of whether regional legislation benefits owners or developers, the final beneficiaries of land rents are financial entities. And financial liberalization, with mortgage securitization, which led to financing from global financial markets, necessary for the promotion and purchase of housing, is the ultimate reason for the drift of Spanish urban planning policy, conditioned by business groups or pressure groups, and for the reclassifications that accompanied the real estate bubble: "it was the financial liberalization reforms that took the initiative and, directly, caused the drift of the Spanish Urban Planning System towards neoliberal approaches" “The borrowed money, although fictitious, flooded the land and urban policy was limited to channeling the floods, either with plans that defended the interests of the owners, or with plans that defended those of the developers.” “We can no longer speak of a social class of urban owners, but of power groups or oligarchic urban lobbies.” “This also means that those who control the real estate market begin to play an active role in the creation of the conditions that allow them to intensify their future income through policies aimed at requalification and urban revaluation.” “Another of the fundamental consequences of the process of land financialization is that through these mechanisms it is not necessary to be the owner of the land, nor even a developer or developer, to appropriate its income.”.

The same lack of equity is manifested, when these lands are expropriated, in the cost that expropriations have for the public treasury in cases in which the legislation establishes fair prices based on market values ​​(as in the case of Land Law 6/1998)[28]​[29]​ which may be inflated due to expectations of revaluation, and be much higher, therefore, than the profitability of those lands at the time of expropriation. As Ildefonso Cerdá said in his General Theory of Urbanization[30]​ in relation to the benefit obtained by the owners with the expropriation of buildings for widening streets "Who ignores the thousand ingenious means put into play by individualism, in order to obtain the greatest possible advantages from the sacrifices made by the municipality or by the State? We will only say that, from this procedure... apart from the enormous economic damages that must be regretted, it has resulted that in the end of most of the road improvements carried out, the benefits obtained by the property are more noticeable than the true satisfaction of the needs of the movement... From all this it follows that everyone has contributed to pay for the urban reforms and improvements that everyone was to enjoy, although some, in a more special, direct and immediate way, in addition to what they were entitled to as an integral part of the public, and that this inequality should not so much be regretted for the iniquity it entails, as for having been an obstacle to the realization of the general and complete transformation of cities”. Cerdá himself had to face this inequity in the management of his Expansion Plan for Barcelona, as Celeste Miranda explains:[31]​ “The city council had to expropriate and financially compensate the owners, and also bear the costs of opening and enabling the new streets... Cerdà stated in the 30 points of his economic Plan, that such an agreement seemed to him 'a leonine contract'. An agreement according to which, all benefits were only for exclusive benefit of the owners”.

Likewise, there is an unfair distribution of burdens and benefits in the assumption of costs and benefits derived from the construction and maintenance of urban infrastructure[32]​[33]​ and in the so-called gentrification processes. The Charter of Athens[34]​ said about the suburbs: "The density of the population is very low there, and the land has hardly been exploited; despite everything, the city is obliged to provide the extension of the suburbs with the necessary services: roads, canals, rapid means of communication, lighting and cleaning, hospital or school services, etc. The disproportion between the ruinous expenses caused by so many obligations and the little contribution that a dispersed population can make to them is surprising." As for to gentrification, as described by Magrinyà, Oliete and Pérez-Foguet,[35]​ "In the case of cities in developing countries, this concept extends to the result of a rapid improvement of the infrastructure of a neighborhood of informal construction. The poorest population, often renters, has to leave the neighborhood due to the increase in prices; the greatest beneficiaries of these operations are the richest owners, who were not initially considered as beneficiaries of the project." Another aspect of the Gentrification, with serious social consequences, and the cause, in part, of the rental bubble in Spain, is the increase in the value of real estate as a consequence of the possibility of change of use that promotes the rise of tourism, such as homes converted into tourist apartments, which are much more profitable. reduced incomes.[39]​.

And there are also cases of illegal buildings or developments that have to be demolished at the expense of the public treasury or whose owners have to be compensated by the Administration as a result of licenses granted against the applicable regulations.[40]​[41]​[42]​[43]​[44]​.

Inadequate planning and negligence on the part of the Administration in controlling compliance with planning, very common in Spain, are also frequently aggravating factors of the damage caused by natural disasters.[45]​[46][47]​.

And finally, the burdens that the owners of land that fulfill very useful environmental functions for society as a whole bear without any type of remuneration are unfair. Although legal mechanisms have been developed in this matter, they have so far been of limited application.[48]​.

Since the situations discussed, and in general any type of improvements derived from decisions and investments of the public administration, as well as the mere concentration of the population in urban areas, generate a surplus value to which the owners or promoters of the land have not necessarily had to contribute, but of which they are beneficiaries (except if through taxes they return that benefit to society), both Karl Marx[49]​ and other non-Marxist economists, such as Henry George[50]​ or Silvio Gesell[51]​ have defended a more or less complete nationalization of the land. This nationalization of the land would not necessarily entail the nationalization of the buildings located on it, but could only consist of the collection by the State of the part of the income that the property is capable of generating corresponding to the value of the land.

Without going so far as to propose the nationalization of land, the Athens Charter,[34]​ in different articles, expresses the need for the public Administration to manage the periphery of cities with sufficient advance notice in order to prevent the emergence of out-of-control buildings that prevent the future expropriation of land at prices compatible with the public interest, necessary for city planning according to rational principles and to have a sufficient supply of housing at affordable prices: “The suburb has been lately incorporated into the scope Administrative. In all its scope, the code, without foresight, has allowed the rights, declared by it to be imprescriptible, to be established. The owner of a plot of land on which a shed, a shed or a workshop has arisen can only be expropriated after multiple difficulties... The Administration must assume responsibility for the management of the land surrounding the city before the birth of the suburbs, in order to guarantee it the necessary means for a harmonious development.” “Numerous parcels of land. They must be expropriated and will be the subject of negotiation. We will then have to be careful with the sordid game of speculation, which so often crushes, as soon as they are born, large companies motivated by concern for the public good. The problem of land ownership and its possible requisition arises in cities, on their periphery, and extends to the more or less large area that constitutes their region.” “For years, urban improvement companies, in all parts of the world, have crashed into the land. petrified statute of private property. The land - the territory of the country - must be available at any time, and be available at its equitable value, estimated prior to the study of the projects. When the general interest is at stake, the land must be mobilizable.” “if the force of things differentiates rich housing from modest housing, there is no right to violate rules that should be sacred, reserving only the benefit of the conditions necessary for a healthy and orderly life. It is urgent and necessary to modify certain uses. A certain degree of well-being must be made accessible to everyone, beyond any question of money, through ruthless legislation. Entire homes must be forever prohibited from being deprived of light, air and space through strict urban regulations.

In line with the urban planning theory in vogue and with various European urban planning experiences,[52]​[53]​[54]​ the Spanish law on land regime and urban planning of 1956[55]​ recognized the convenience of the land intended for the expansion of populations being publicly owned, although it was considered unviable due to the funds necessary for this, among other reasons.

According to S. Vives and O. Rullan,[21]​ until the early 1980s, voices from the “urban planning left” could be heard in favor of the public promotion of all developable land. Some authoritative voice, however, continued to defend the expropriation of land by the Administration (although with private promotion) as a system for urban expansion. J. L. González-Berenguer wrote in 1997:[56]​ "All urban growth land must be transferred to the public sector, planned freely and sold to individuals, with rigid (rigid, but allowing a reasonable profit) regulations on the prices and qualities of the final product. The 1976 Law at one point, and the current Law in three moments already contemplate and regulate this possibility." And he defended the self-financing of the urban planning activity by the Administration expropriating the land destined for urban expansion for its initial value (agricultural value) and selling it at a higher price, thus appropriating the society of the capital gains that it itself generates: "This operation (buying low to sell high, although here it would not be 'selling high', it would just be selling 'more expensive than it was bought'), this operation, I repeat, is or is it not the essential operation of the capitalist system? If it is carried out by individuals, to whom the plan, why can't the Administration, author of the classifications and qualifications of the plan, which are the cause of the revaluation, do it?”.

Since ancient times there has been a spontaneous tendency to concentrate in population centers or in the vicinity of communication nodes due to social, geographical and economic efficiency reasons.[57]​ These advantages that concentration entails mean that in certain areas there is greater demand in relation to the supply of land. The concentration of the population is, furthermore, desirable for ecological, landscape and protection of agricultural or potentially agricultural soil reasons, and the creation of new settlements far from the existing ones is conditioned by the need to extend road access and public service networks from the existing ones, serving each plot. These infrastructures have become increasingly numerous and have greater capacity,[58]​ while other services such as public transport or garbage collection have become essential. All of this makes sustainable territorial planning necessary, which limits the developable land to the environment closest to the existing centers and in proportion to the foreseeable demand based on demographics and the economic situation.

Plots and developable land must, therefore, be relatively scarce, and their prices will depend, in part, on the greater or lesser supply and demand, not only of buildable land, but also of homes or other types of properties, in each part of the territory (situations that are not very comparable constitute, in reality, different markets). However, since the land market does not enjoy the conditions of perfect competition, land prices are not the result of the simple interaction of supply and demand, and the particular characteristics of the land that make it susceptible to being mortgaged mean that, in the absence of correct regulation of the mortgage market, prices can rise enormously without causing demand to stop increasing. Satisfying speculative demand, and especially that generated when the mortgage market is not correctly regulated, is, in general, incompatible with sustainable urban planning and territorial organization.

The shortage of housing or land available for construction, whether due to legal prohibition or the existence of speculative practices by operators who monopolize large areas of land, but who do not build to generate an artificial shortage, as the Spanish land law of 1956 warned,[59]​ can cause an increase in real estate prices.

Ildefonso Cerdá already said of the walled cities of his time:[60]​ "The lands circumscribed by the walls enjoy the privilege of building in direct, immediate and unjustifiable damage and harm in addition to the exterior lands. And this privilege represents a monopoly on habitability, dispensed without any plausible reason to the fortunate owners of the building lands, a monopoly whose tyrannical force is felt in the market for rooms whose prices rise. at the will of the monopolizers.”.

In circles close to neoliberalism, the increase in land and housing prices is also attributed to the shortage of buildable land,[61]​ but ignoring the hoarding of large areas of land for speculative purposes by those with large capital, such as large developers and financial entities,[62][63][64][65] and proposing as a solution, just as they do for any perishable good with very different characteristics, deregulation. or land liberalization,[66]​ that is, the authorization to build in the largest possible part of the territory, even if that territory is far from any population or facilities, lacks road access or public service networks.

In the 1990s, some Spanish political groups blamed high housing prices on a supposed shortage of buildable land, an idea that resonated with a large part of the population thanks to the support of various institutions and its media dissemination,[67]​[21]​[68]​ while others blamed it on the speculative retention of land, for which they proposed giving priority to real estate developers over owners when appropriating of the capital gains generated with the reclassification of the land.[69]​.

Finally, both conceptions were reflected in the laws.[67]​ The land legislation of some autonomous communities gave primacy to the “Development Agent” (the promoters)[20]​ over the owners in the appropriation of capital gains, and the Royal Decree-Law 5/1996,[70]​ the Land Law 6/1998[71]​ and the Royal Decree-Law. 4/2000[72]​ they carried out land liberalization. And although the rulings 61/1997[73]​ and 164/2001[74]​ of the Constitutional Court "Constitutional Court (Spain)") recognized the powers in matters of urban planning of the autonomous communities, as Burriel de Orueta says:[24]​ “Although the Constitutional Court Ruling of 2001 made it clear that this issue was the responsibility of the Communities Autonomous, those of conservative government transferred the concept of 'everything developable' to their autonomous law practically to the letter, and even went further.” And the urban plans approved until then were altered in an unorthodox way to convert land that until then was not developable:[24]​ “This lack of respect for municipal planning has allowed an unplanned, accelerated and massive urbanization of non-developable land, precisely the land that municipal planning had decided to exclude from the urbanization process.”.

All this did not prevent, however, the speculative retention of land with greater expectations of revaluation from continuing to occur:[24]​ “the availability of developable land in planning has not acted as a limiting element of the quantity or territorial location of urban development, because almost all demand has been satisfied on non-developable land.” And according to P. Gigosos and M. Saravia,[2]​[75]​“There has never been a shortage of classified land, but there has only been interested in its incorporation into the urban planning process (and in perfectly calculated and selective doses) when housing prices have skyrocketed.” According to J. L. González-Berenguer[76]​ "the banks have bought at agricultural prices many hundreds of millions of square meters (it is authoritatively said that between 350 and 400 million), they retain them as an asset that is always revaluable and easily realizable, and they sell them when they are at a good price, either to external developers or to their own promoters, and they do it to build where and when it suits them.”

Likewise, it is common for new housing developments, especially if they are large, to only be put on the market very progressively, since the increase in supply that would otherwise occur would force their developers to lower prices, while the rise in housing prices that normally occurs over time helps to make their investment profitable.[3]​.

However, the speculative retention of developable land and housing does not in itself explain, given the amount of previously non-developable land built, the high land prices reached during the Spanish real estate bubble in the early years of the millennium, but we must consider, above all, the enormous increase in demand due to the exaggerated granting of high-risk mortgages.[77]​ Likewise in the United States and Ireland[78]​, real estate bubbles related to the granting of junk mortgages or subprime credit.

Increasing the area of ​​buildable land to compensate for its hoarding for speculative purposes or simply to increase supply and thereby lower real estate prices results in a less compact and, therefore, unsustainable urbanization. According to Roberto Camagni,[57]​ "under careful observation must be not the city as such... but some highly relevant trends that involve the city itself and that endanger its primary role as a seat of social interaction, creativity and (relative) collective well-being. I am referring to the processes of disordered and unlimited growth that the city often suffers in periods of economic takeoff and rapid industrialization. I am referring to the recent processes of diffuse urbanization that have been called interchangeably as ´metropolitanization´, ´peri-urbanization´, ´urban sprawl´, ´ville eclatée´, ´edge-city development´: processes that have made the conceptual distinction between city and countryside empirically ambiguous, leading us towards a non-city and a non-country; automobile.”.

Aside from the non-compliance with planning[27]​ and land legislation[79]​ common in Spain, since the first land laws, attempts have been made to bring rationality to the planning of the territory. The aforementioned law on land regime and urban planning of May 12, 1956[59]​ warns of the problem of “The retention of land by owners who do not develop or build, nor agree to sell their land, to develop and build, at fair estimate prices”, for which it establishes the need for local corporations to “gradually acquire land that can serve as price regulators in the land market” and “the configuration of unfavorable situations for those who do not decide to act in accordance with the public interest... With this purpose, a non-fiscal tax on substandard construction is created, which will fall on unbuilt plots in the center of the town.” Therefore, this law did not propose any type of land liberalization, but rather the intervention of the public administration with a decided land policy.

In said law of 1956[59]​ it also says “Traffic over land does not operate, on the other hand, in a regime of perfect competition, in which it can be said that the economic law of the market naturally determines a fair price that legitimately excludes all intervention”. Perfect competition is understood as a series of conditions that make price manipulation impossible, so that it is the interaction of supply and demand that determines the prices of products. In this way, according to neoclassical economists, simply thanks to free competition the market regulates itself, maintaining a moderate price level and making the intervention of the public administration in the economy unnecessary.

But effectively, these conditions do not exist in the land market. According to Dolores Aguado,[80]​ “Unlike other markets, real estate is often not a balanced market (we currently have the best example of this with the existence of a strong stock of unsold homes and a high unsatisfied demand), it is not transparent (except for housing, there is no statistical series of price evolution and the land market is probably a good example of an opaque market), it is strongly localist (urbanized land must be consumed wherever it is produced, therefore there may be demand where there is not enough land to cover it and there may be supply in municipalities where there is no demand), it is inefficient (the increase in supply does not produce a price reduction and, furthermore, the number of comparables, even at times of greatest number of transactions, is very scarce compared to the total universe), it is rigid (a change in demand takes a long time to be incorporated into the new supply).”.

Thus, for example, central land, the most requested, is limited and difficult to increase.[81]​ Furthermore, its creation through gentrification has negative social effects, by displacing businesses and the pre-existing population, while in the newly created peripheral neighborhoods, large shopping centers perform the function of creating centralities, but at the cost of creating a monopoly on commercial use and annihilating street life in streets devoid of shops.

Nor does there exist in the land market the condition of the necessary existence of a large number of sellers that means that none of them can exert an appreciable influence on prices, since there are few holders of sufficient capital to acquire large extensions of land around towns and to maintain the property for years or decades while waiting for the demographic conditions, the favorable economic circumstances (whether they arise or caused by those same speculators) and its convenient reclassification, to put it on the market and obtain enormous capital gains. Thus limiting the supply mainly to relatively small plots and forming oligopolies[62][63][64]​ on these peripheral lands. For this reason, the aforementioned law[59]​ defended the intervention of the public administration by providing for the constitution of municipal land assets that "may be transferred for building or applied to the purposes provided for in the plan."

Despite providing for the regulation of the land market through the aforementioned municipal assets and measures against speculation, the 1956 land law recognized its insufficient scope when it declared: "If the ideal in the urban planning enterprise could be that all the land necessary for the expansion of populations were public property, through fair acquisition, to offer, once urbanized, to those who wish to build, the solution, however, is not viable in Spain. It would require extraordinary funds. substantial, which cannot be diverted from other national objectives, and would cause serious losses to private property and initiative.” This is consistent with the land valuations established by the law itself because, although it admits that “the acquisition of land to form land reserves may be carried out through expropriation”, the law establishes different types of land valuation, among which is the expectant value, which assigns a value to the land according to its potential for future use. urban planning. This expectant value is what the law applies, among other areas, to “rural lands that, according to article eighty-seven, offer appreciable prospects for development or urban use”.

In the consolidated text of the Law on Land Regime and Urban Planning of 1976[82]​ the expectant value disappears and non-developable land is valued according to its initial value (value as an agricultural exploitation or similar) and developable land according to its urban planning value. However, Law 8/1990 on reform of the urban planning regime and land valuations[83]​ says of the previous law that “it has proven insufficient (…) to increase public land assets to a sufficient extent to influence the regulation of the real estate market or to allocate surfaces of developable land to the construction of officially protected housing.”” Therefore, it alters the previous criteria, so that now “the initial value applies to both non-developable and non-developable land programmed; even the programmed urban development, if the development of the precise planning has not yet been completed, is valued by reference to this initial value.” And establishes “the application of these valuation criteria to all expropriations carried out by public powers”. It also specifies that "as regards land assets, the clearly established possibility of resorting to the expropriation of non-urbanizable land for its incorporation into them must be highlighted."

This initial value established by the Spanish land law of 1990 is in line with the profitability of the land to which it is applied at the time of expropriation, since they still do not have authorization to build. That same value is what an appraisal carried out to request a mortgage loan would assign to them, in accordance with ECO regulations 805/2003.[4] Their market value, however, could be higher if potential buyers had the expectation that said lands were not going to be expropriated and that they would have a certain buildability granted by the planning. When this case actually occurs, the owner, after executing the urban facilities and making the transfers of part of the land required by law, acquires the right to build on the remaining land, which, being now urban and generally located in the vicinity of a town, will acquire in the land market a value multiple of the initial one,[18]​ and the higher the greater its buildability, a value that the owner will impact on the price of the homes or properties built on it. him.

Thus, with this law, the administration was provided with the means to acquire land at reduced prices, to later sell it and control its construction under conditions that would allow quality housing to be offered at moderate prices or rents. This supply, when it is abundant, also moderates, due to the simple tendency towards a balance between competition, the price of housing built on privately owned land.[84] However, in order to expropriate the land intended for the expansion of cities due to its agricultural value, these lands must be effectively rural, so it is essential that cities and other population centers are well delimited, and that outside these limits any non-rural use is very strictly regulated.

There is controversy, however, about the free transfer, also provided for in the successive land laws, of a small percentage of the use of developable land for its incorporation into the municipal land assets, since some authors consider that it only serves to increase the price of housing. the so-called municipal land assets or set of publicly owned land, to influence the land market, selling them in times of scarcity and retaining them when there was an oversupply, in order to maintain prices within stability parameters... the chronic insufficiency of local estates has often led to their use for purposes different and contrary to those prefigured by the laws. For example, instead of applying them to influence, in accordance with their institutional mission, the land market, they are often used. They sell to the highest bidder and at the highest possible price to raise resources for a meager municipal treasury.*”.

“The reform of the land market in the sense of greater liberalization that increases its supply”, which the Spanish law 6/1998 on the land regime and valuations,[71]​ according to its own statement of reasons, intended, represents the sacrifice of the rational planning of the territory, without thereby achieving the expected lowering of the land.

Far from what the 1990 law advocated: “A firm action by the competent Administrations, assuming a clear role in the adoption of decisions on the spaces that should be urbanized and those that should be kept out of this process based on general planning criteria defined in the planning (and not as a mere response to isolated initiatives of individuals)”, the Land Law of 1998[71]​ aspired to “facilitate the increase of the supply of land, making it possible that all the land that has not yet been incorporated into the urban process, in which there are no reasons for its preservation, can be considered as susceptible to being urbanized”. The success of liberalization seems to depend on the extent of developable land (especially between the approval of Royal Decree-Law 4/2000[72]​ and its modification by Law 10/2003):[86]​[87]​ “In that large developable land that, following this criterion, the plans delimit…”. And the prominence of the land owners (although the land legislation of some autonomous communities gave primacy to the development agents over the owners):[20]​ “The owners of land classified as developable will have the right to promote its transformation by urging the Administration to approve the corresponding development planning, in accordance with what is established by the urban legislation.”.

With this, the legislator intends that the planning foresee such a large extension of the urbanization as to cover all the land that does not have any exceptional peculiarity that justifies its protection, regardless of what the demographic conditions, the existing infrastructures or the purchasing power of the families make advisable, but without this forecast having any real semblance of reality, since the distinction between the scheduled and unscheduled developable land has been eliminated, and thus the execution deadlines for the urbanization,[76]​ all citizens are left at the expense of the owners of all that large expanse of land deciding to develop it or retain it until it is revalued to their convenience. As E. de Santiago says about the case of Madrid:[87]​ “in reality the Madrid territorial model ―in full coherence with the neoliberal ideology― is that there is no model, a blank piece of paper.” The infrastructures necessary to allow this dispersion over the territory[88]​ (and other unnecessary ones)[89]​ constituted a substantial business for the construction companies concessionaires of the works at the expense of the public treasury and were, in addition, a source of corruption.[90]​.

Thus, we returned to the assumptions of developmentalism that had characterized the last decades of the Franco dictatorship. Although circumstances had changed, the 1998 Land Law recalls what Fernando de Terán said about a previous study of Madrid's planning in the 1970s:[91] "it renounced containing and limiting the growth of Madrid, offering for the first time open and unlimited planning. It was not just a confession of impotence. In reaction, it went to the opposite extreme, accepting and magnifying growth... It was the time of optimistic expectations of unlimited economic development and planning. It was prodigal in proposing large expansions supported by large infrastructures for many millions of new inhabitants.” The consequences of this model had been “a clear permissiveness regarding the requirement of acceptable conditions of infrastructure and social facilities, as well as the possibilities of urbanizing outside the plan's provisions.”.

The liberalization of land also has the consequence that the possibility of building almost anywhere in the territory creates the generalized expectation of materializing that possibility at some point even in the most unsuitable places for it, which causes each owner to raise the price at which he is willing to offer those lands, thus making the land that can be dedicated to other uses, such as agriculture, [92]​[93]​[94]​ more expensive, with the consequent loss of competitiveness of agricultural products. This, in turn, increases the cost of the expropriations necessary to implement new infrastructures by virtue of this general increase in the cost of land and the new type of valuation provided for in this law even for land classified as rural (market value obtained by comparison), with the increase in public spending that this implies.[95]​ The lack of planning that the law seems to encourage will only add even greater difficulty to the implementation of future infrastructures and an increase in the cost of the expropriations necessary for its execution.

Although the same law[71]​ declared certain lands undevelopable "due to their landscape, historical, archaeological, scientific, environmental or cultural values, natural risks accredited in the sectoral planning, or based on their subjection to limitations or easements for the protection of the public domain", the important income that urbanization and construction meant for the town councils in the form of building permits,[96]​[97]​[98]​ the pressure from development companies and the neighbors themselves in the face of what appeared to be a development opportunity,[24]​ and urban corruption, which in many cases brought together the interests of municipal councilors and developers driven by the great demand and high prices of housing, meant that these requirements were not always met[99]​[42][100]​ during the years of the real estate bubble, after the approval of the law, having to regret the destruction of valuable environments from the point of view ecological, landscape or environmental.

Likewise, the law provided that when urban planning actions were promoted, "the promoter would ensure the execution, at his own expense, of the connection infrastructures with the general systems that the nature and intensity of said actions demand in each case and, even, the reinforcement and improvement of said general systems when this was necessary." The connection with the general systems also suffered in cases of illegal or improvised developments on reclassified land,[101]​[102][103]​[104]​ and in terms of the reinforcement of the general systems by the promoters, it is generally unfeasible, since the general systems,[105]​ by definition, are those that serve the entire population, and if their lack of capacity occurs, this is not Attributable, in general, to an isolated action, nor can these general systems be reinforced simply by adding that additional capacity, but rather they must be sized and built to serve the entire population and its foreseeable increase on a lasting basis. But each urban development has an impact on the general systems as a whole, and the sum of a certain number of isolated urban actions can entail a cost for society as a whole by making reservoirs,[106]​[107]​ electrical infrastructure,[108]​ water supply, sewage and purification infrastructure,[109]​ roads[33]​ or railways,[110]​ and facilities such as schools[111]​ or health centers[112]​ that served the primitive population. These larger infrastructures that the sum of different urban actions suggest are necessary to supply the entire population can, in addition, ultimately become oversized[107]​ when the supply of housing responds to a demand based on the excessive granting of mortgages, so that a large part of them will ultimately remain uninhabited, either because they are not sold or rented, or because their occupants are evicted, as happened during the Spanish economic crisis of 2008-2014, after the burst of the real estate bubble in Spain.[113][114]​.

In contrast to the neoliberal conception made only, apparently, from the perspective of the land or housing applicant (and without analyzing whether they are sought for habitation or only as a form of savings or investment), which states that a free location should be possible at any point in the territory, barely regulated urban planning, to minimize the cost of the land, there are much more holistic conceptions in which it is considered that the territory must be subject to urban planning regulation that guarantees access to housing while taking advantage of the synergies and economies of scale that the concentration of the population entails,[57]​ the benefits and burdens of urbanization are equitably distributed, the environment and agriculture are protected, and other advantages of the compact city are obtained, such as greater social cohesion, the optimization of the operation of public transport, less dependence on the private vehicle and the consequent decrease in pollution, the reduction of the costs of construction and maintenance of infrastructure and urbanization works and the provision of public services and the improvement of efficiency energy.[115]​[116]​[117]​ This is recognized by the subsequent land law 8/2007:[118]​ “The European Union proposes a compact city model and warns of the serious drawbacks of dispersed or disorderly urbanization: environmental impact, social segregation and economic inefficiency due to high energy costs, construction and maintenance of infrastructure and provision of public services.”.

Behind the apparent absurdity intended by the 1998 Land Law of providing for an almost unlimited extension of urbanized space regardless of what demographic conditions, existing infrastructure or the purchasing power of families make foreseeable or advisable, hides the fact that the purchasing power of the population can be increased artificially thanks to easy mortgage credit and some other mechanisms that induce families to go into debt. Simultaneously, the bank must finance real estate developers, who will provide the supply, to ensure the continuous flow of capital, thus laying the foundations for the speculative bubble.

Privately owned buildings and land are real estate, and the land, furthermore, is not susceptible to destruction or deterioration. This makes them suitable as collateral for the creation of mortgages and causes the land and real estate market in general to behave very differently from that of other assets if the mortgage market is not adequately regulated,[119]​ which implies public control of the appraisal companies that value real estate and the setting of a maximum amount of credit granted in relation to the appraised value of the mortgaged properties, among other measures.

Everything seems to indicate that the mortgage market in Spain during the years of the real estate bubble lacked sufficient regulation.[120] It was common to obtain mortgage loans for 100% or more of the appraised value of the homes and appraisal companies, linked to the banks or highly dependent on them as they were their almost exclusive clients, frequently overvalued the properties.[121]​[122]​.

This deregulation of the mortgage market, along with many other factors, such as the poor housing policy that barely promoted public housing and social rentals,[123]​[27]​[11]​ the drop in mortgage interest rates,[124]​ the tax relief for the purchase of homes,[124]​ the increase in the population due to immigration,[125]​ the low profitability of investment in the industry and in the different markets international relations, the adoption of the euro,[76]​ with the laundering of black money that it entailed, and the increase in employment based on the boom of the construction sector itself and the circulation of credit money (although publicized as a success for the Spanish economy),[126]​[127]​[128]​ encouraged many families to go into debt[129]​ who, suddenly, could access a home to own even without having savings.

The strong demand based on easy mortgage credit, together with the overvaluation of real estate by the appraisal companies and the other factors mentioned, together with a supply that grew at a slower rate, due to the rigidity of the real estate market,[80]​ and the speculative retention of land,[2][76]​ caused housing prices to rise in Spain, which gave a new incentive for many others, incited by the idea of a revaluation of their heritage, or out of mere speculative desire, did the same, thus creating a vicious circle according to which the increase in the sale of homes and the increase in their price followed each other, regardless of the amount of developable land provided for by the planning, and contrary to what was said to be intended with the land liberalization introduced by Law 6/1998.[71] Meanwhile, successive governments and banks, among others, denied the existence of any real estate bubble.[130]​.

In this way, between 2004 and 2008, four million mortgages were created in Spain.[77]​ In each of the years 2003, 2004, 2005 and 2006, more homes began to be built in Spain than in Germany and France combined,[131]​ and between 2002 and 2007 the price of housing doubled.[132]​ To grant that extraordinary amount of credit, in order to obtain an enormous benefit in terms of interest, the Spanish bank had to resort to large sums of money in loans that, in turn, were granted by the banks of other countries.[133][134] It should also be noted that, according to Spanish legislation, the delivery of the property to the financial entity that granted the mortgage did not necessarily pay off the debt, which is why, after the burst of the real estate bubble, and the collapse of property values, real estate, many Spaniards, in addition to losing their homes, had to bear enormous debts with banks and savings banks.[135]​.

Apart from interbank loans, another technique that enabled the growth of the Spanish real estate bubble through the refinancing by foreign investors, mainly European pension funds, of the enormous number of mortgages granted, was the so-called securitization,[21]​ which converts packages of mortgages into bonds with the highest credit rating. If the competent Spanish authorities, the Bank of Spain and the Ministry of Economy, had limited this technique,[136]​ as the authorities of other countries such as Australia and Canada did, the number of mortgages would have been reduced and therefore the pressure of demand on housing prices in Spain.

The subprime mortgage crisis in the United States made European and American banks distrust each other in the solvency of their competitors, drastically limiting the credit granted and cutting off the source of financing[137]​[138]​ that fueled the real estate bubble in Spain, leading to a decline in home sales,[113]​ to the crisis of the real estate sector, also indebted to banks,[139]​[140]​ to the increase in unemployment,[141]​ and non-payment of part of the mortgage debts[77]​ and the resulting evictions.[114]​.

As a result of the real estate bubble and the subsequent crisis, Spanish private debt, the sum of that of families, companies and banks, constituted in 2012 83.5% of the total Spanish debt, which was four trillion euros[142]​ (four times the GDP). In 2014 there were 3.4 million empty homes in Spain,[113]​ more than in any other country in Europe, and evictions were in the hundreds of thousands since the start of the crisis.[114]​.

In conclusion, the disproportionate increase in the price of housing between 1998 and 2008 was parallel to the excessive increase in the granting of mortgages, and the decrease in the price of housing[143]​[144]​[145]​[146]​ from 2008 to 2014 was equally parallel to the difficulty of obtaining credit in those years,[147]​ confirming the ease of obtaining mortgage credit, together with the previously mentioned factors[148]​[149]​ that induced the population to go into debt when purchasing homes, the causes that explain the rise and fall in housing and land prices produced in both periods.

During the Spanish economic crisis (2008-2014) "Spanish economic crisis (2008-2014)"), financial institutions became owners of a large number of properties as a result of evictions.[150]​[151]​ As had already happened in previous decades, legislative reforms, together with the shortage of social rental housing,[123]​ decisively encouraged the formation of a new bubble real estate in big cities.

In 2009, the figure of the Listed Joint Stock Investment Company in the Real Estate Market, SOCIMI, was created, investment companies that obtain their income from the rentals of their real estate properties. The reform, in 2012, of its regulatory legislation, which among other advantages grants them tax privileges that are added to those already existing for the rental of housing,[81]​ and Law 4/2013,[152]​ which modifies the Urban Leases Law,[153]​ reducing the minimum lease term and other rights of tenants, encourages investment funds to purchase real estate assets in the hands of the banking[154]​[155]​[156]​[157]​ and social rental housing privatized in 2013 by the City Council and the Community of Madrid.[38]​ The same SAREB, the so-called bad bank, to which financial entities transferred part of their real estate assets, in addition to selling properties to investment funds,[158]​ will create its own SOCIMI.[159]​.

Due to the amount of real estate they monopolize, investment funds form oligopolies and can influence the real estate market according to their convenience. Apart from this, their strategy consists of rehabilitating entire buildings, imposing premiums on other owners, if any, in order to drastically raise rents[160]​ and maximize their profits.[161]​[162]​[163]​ This often leads to evictions for non-payment of rent,[164]​ and real estate harassment of those tenants covered by old leases who cannot raise rents. income.[165]​.

But the rise in rents is also contributed by, on the one hand, the increase in the demand for rental housing due to the limitation of mortgage loans granted to a precarious population as a result of the economic crisis, and on the other, the reduction in residential supply in the center of the main cities derived from the conversion of homes into tourist apartments, much more profitable, fostered by the rise of tourism,[166]​ which translates into the gentrification of central neighborhoods and the expulsion of its original population to the outskirts, where rents also rise as a result of the increase in demand.[167]​.

During these years, some Administrations and especially the most affected town councils took measures to combat the causes of the increase in rents,[168]​[169]​[170]​[171]​ with great opposition from other administrations,[172]​[173]​ parties[174]​ and economic agents,[175]​ and legal actions aimed at reversing possible abuses in this sector multiplied. scope.[176]​[177]​[178]​[36]​[37]​ The PSOE government also promoted the approval of Royal Decree-Law 7/2019,[179]​ with various measures in the same sense, without including the possibility of limiting rental prices in some areas, as demanded by the parties to its left.[180]​ According to the Bank of Spain, average rental prices rose by 50% in Spain between 2014 and 2019.[181]​.

In the spring of 2023, Law 12/2023 was approved for the right to housing,[182]​ the first Spanish law that allows autonomous communities and City Councils to establish limitations on rental prices in areas where the market is considered stressed, in addition to other measures to protect tenants and the public housing stock, and to establish surcharges and tax reductions to discourage the maintenance of empty homes and stimulate rentals at moderate prices, and the Government announced two measures related to housing: the granting of ICO guarantees to young people and families with minor children to obtain mortgage loans, a measure already applied by the right in the autonomous communities where it governs,[183]​ rejected by the left-wing parties,[184]​ including the minority partners of the coalition, and applauded by the banks,[185]​ and the development of 183,000 public rental homes affordable,[186]​ which was qualified by the Government itself[187]​ and generally received with skepticism.[188]​.