From cheap workers' homes to three million euros

The worker's house that is now worth three million euros

In the Niño Jesús neighborhood, in the Retiro district, there is a colony of small houses built under the cheap housing law, which reserved land for workers and small business owners. Today, each one is valued at around 3 million euros. The same door that once sheltered a manual laborer now protects a luxury asset. In Alpedrete, in the Sierra de Madrid, the city council gave away plots in the 60s to anyone who committed to building their own home. Those lands are now worth 350,000 euros; the homes built on them, about 800,000.

From the free plot to unattainable land

The case of Niño Jesús is mirrored in any medium-sized city. It wasn't that the land was cheap: it's that access to land was free or nearly free. A mining company gave land to its employees to build their own homes, according to the account of someone who today had to buy one of those homes with a mortgage for 30 years. These were constructions without an architect, without a license, and without permits. And they are still standing.

The irony is bitter: the makeshift villa built with a few bricks endures, but its market price is no longer for the one who built it. When those little houses were built, it was on the outskirts of Madrid, with more open space than the center. Time turned them into central locations, and price did the rest. We're not just talking about inflation: the city grew around them, and scarce land became revalued without anyone lifting a brick.

The worker in the 70s who had a house, car, and beach apartment

The archetype of the era was documented in the discussion: an unskilled worker, at 30 years old, had a paid-off house, a paid-off second residence on the coast, a paid-off car, a vvife dedicated to household chores, and three children. On a single salary. And it wasn't the exception in the neighborhood: it was the norm in the area. Today, no convention or industrial salary can reproduce that picture.

Beware of easy nostalgia. Cars back then, in proportion to housing, cost more than they do now. The two big expenses were always the same: housing and the car. The difference isn't in how hard that generation worked, but in what they received in return. The effort was enormous; the reward, tangible.

200,000 subsidized homes a year that are no longer built

The data that separates two models: in a previous period, an average of 200,000 subsidized homes were built annually, and another similar amount of free-market housing. Conditions were set for that to happen. With the arrival of democracy, subsidized housing was almost shut down overnight. And after 2008, housing construction in general ceased while the Spanish population grew by 10 million people.

Supply and demand are not opinions, just as gravity isn't. If the country adds inhabitants and stops building residential land, prices do the predictable. The debate about whether bricks are expensive always ends in the same place: no one disputes the number, they dispute who to blame.

Fixed rate, inflation, and a ruined banker

There is a less epic and more financial explanation. Those cheap houses were paid for, in part, by everyone through the banking crises the country experienced between 1979 and 1993. Loans were at a fixed rate. When the high inflation of the 70s arrived, owing money became a bargain and being a banker, a ruin. The banks learned their lesson, and in the next bubble, they started lending at variable rates. The modern buyer inherited this change in model without signing anything.

With that picture, discussing whether this is capitalism, socialism, or a hybrid becomes almost cosmetic. One side argues that everything is state-controlled and the market no longer exists; the other responds that private ownership of the means of production remains intact. In the middle is the result, which admits no argument: the same land that was given away today is valued at hundreds of thousands of euros.

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In 1950, Móstoles had 1,800 inhabitants. Today it is an entire city of apartments and concrete. That Madrid of cheap outskirts didn't vanish with a specific political decision or a decree. It gradually became this while no one was looking.