Land shortages and bureaucratic hurdles
One of the key factors behind the shortage of affordable housing—estimated at 700,000 homes relative to current demand—is the lack of land suitable for immediate construction. At the same time, Spain has around 255 million square meters of land plots suitable for development, on which at least 1.8 million residential properties could be built over the next 30 years. However, construction is hindered by bureaucratic issues – such as an excessive number of reports required to approve any procedure, or slow responses from public authorities.
For a landowner to convert a plot into one that is ready for development, the long list of procedures includes, in particular, approval by the municipality and the corresponding autonomous community of a sectorization plan, a partial plan, or a special plan (depending on the stage of land conversion). This typically requires hundreds of reports from bodies such as:
- hydrographic confederations,
- electricity companies,
- the Directorate-General for Roads,
- the Directorate-General for the Coast and the Sea,
- the rail operator (Adif),
- the airport operator (Aena),
- as well as a range of environmental organizations that can delay or even derail the project.
The worst part is that not all of these reports can be processed at the same time, and some of them can only be handled after others have been approved.
Development potential and regional differences
The shortage of developable land for housing construction is a problem that affects all market participants equally—from owners to developers and various public authorities. According to the report “Real Estate Market in Spain: three keys to easing tensions,” prepared by OBS Business School, this is not an issue of surface area, since Spain has enough land for construction – even in cities such as Madrid – but not all the required formalities have been completed.
For example, if all this land were put into use in the provinces of Toledo or Almería, it would result in an oversupply of housing that the market would only be able to absorb over 30 years. In other regions – such as Madrid, Navarre, the Balearic Islands, Cantabria, and the provinces of Barcelona, Alicante, Biscay and Gipuzkoa – all this land could be exhausted in less than 15 years, which is a very short timeframe from the perspective of municipal urban planning.
Growth constraints in Madrid and Barcelona
Despite all of the above, it should be noted that there are cities where expansion and growth are very limited or impossible. For example, Madrid can “stretch” to the southeast, as in the case of new developments in:
- Valdecarros
- Berrocales
- Los Cerros
- Ahijones
to the north, with new buildings in Madrid Nuevo Norte, or even to the east, when Nueva Centralidad del Este begins operating – a district that will be created on land intended to host the Olympic Village. Overall, more than 150,000 residential properties are planned to be built in new areas in the coming years. In turn, Barcelona is constrained by geographic features that prevent expansion; these include:
- the Mediterranean Sea,
- the Besòs and Llobregat rivers,
- as well as mountains with the Collserola Natural Park.
According to estimates based on data from the Ministry of Housing and Urban Development, the ten most densely populated cities in Spain have the potential to build around 1.85 million residential properties, more than two-thirds of which would be in Murcia and Madrid. By contrast, Valencia and Barcelona combined have capacity for about 40,000 apartments, and many of them will be built over a very long-term horizon.
Legal risks and timelines for land conversion
In general, any change in urban planning as part of land planning and management has a regulatory status that becomes completely void if it contains any shortcomings, even the most minor ones, that cannot be corrected. Then any citizen or association that identifies this can easily challenge it in court; if successful, this obliges the administration to отменить the change and start all the work again. For example, the general plan of Boadilla del Monte was annulled in 2017 due to the absence of a “gender impact” report.
This rigidity of regulatory requirements means that timelines for converting land into urban developable territory can take several decades. As noted in a report published in 2024 by the Spanish Association of Developers and Builders (APCE) and the consulting company Colliers, creating a district can take at least ten years.
This happened with El Cañaveral in Madrid, where the partial plan was approved in 2003, but the first building licenses were only obtained in 2012. In the case of the La Sagrera district in Barcelona, the urban improvement plan was approved in 2007, and the corresponding works did not begin until 2024.
Proposed solution
The solution proposed by all participants in the process is a reform of land legislation to put an end to the paradox whereby the absence of a single document can derail the urban planning of a new district that would provide housing for thousands of people.
Read also: Spain Must Double Its Housing Construction Volumes. Current listings are available in the catalog of new buildings in Spain and in the luxury real estate in Spain section.
