Spain Economist Proposes New Cities to Fix Housing Crisis

Niño Becerra Proposes New Cities to Curb Housing Crisis

Does Spain really need to build entire cities from scratch so young people can move out? Professor Santiago Niño-Becerra says yes: only an intervention of that scale, with new cities of between 25,000 and 30,000 inhabitants, would generate enough supply to balance a market he considers runaway. For him, measures like the youth rent bonus are "patches" that dodge the root problem: a chronic shortage of affordable housing. Without a massive increase in supply, any other measure is a placebo.

The proposal quickly clashed with reality on the ground. Many responses point to an uncomfortable detail: large parts of Castile already have built but empty housing. There would be no need to urbanize anything, just relocate population. Others respond that the problem is nobody moves to a wasteland without jobs.

What Exactly Does the Professor Propose?

Niño-Becerra's diagnosis rests on a simple idea: prices rise because there is a lack of product. His recipe involves replicating on a large scale what was done in the 20th century, when industrial Spain absorbed millions of internal migrants and whole neighborhoods were built to house them. Bellvitge, Sant Ildefons, La Florida, Pubilla Casas, or Vallecas prove that the country knows how to do this when it wants to. The difference, the economist argues, is that today construction is restricted in Barcelona and many other areas while demand continues to grow.

The argument has an obvious weak point: a city is not just bricks. It needs jobs, services, transport, and above all, a reason for someone to leave their life and move there. As one recurring analysis summarizes, a 30,000-inhabitant development in the middle of an Extremadura wasteland is useless if there is no work in Extremadura. Housing trinc employment, not the other way around.

The Problem of Already Built Empty Land

The most repeated objection does not question the goal, but the means. In the two Castiles, they argue, there is already built construction "to boredom." Moving those who cannot pay rent in Madrid or Barcelona there would solve two problems at once: relieving pressure in booming areas and revitalizing depopulated Spain. Everything is done, they say. Only people are missing.

The obstacle is the same as always. Those without jobs need to move to where jobs are, and those jobs are concentrated in four or five urban centers. That is why a different proposal gains weight: mandating remote work for all positions suitable for it. If the office stops tying people down, geography stops ruling. It is the only lever that, without moving a single brick, could redistribute population.

Tax Incentives and the Historical Repopulation Model

Another current recovers much older formulas. During the Reconquista, frontier charters (fueros) were granted to attract settlers to newly won lands: tax privileges, better conditions, and legal protection. Translated to the 21st century, the equivalent would be reducing income tax (IRPF) for those residing in depopulated areas, eliminating VAT for these residents, improving services and infrastructure, and giving tax advantages to companies opening headquarters there.

The historical parallel is suggestive but also tricky. Those charters worked because there was land to farm and enemies to antiestéticar. Today, the incentive would have to be purely economic, competing with the comfort of living where one already lives.

Birth Rate as an Uncomfortable Test

There is a data point that disorients defenders of large-scale construction: a country with a birth rate of 1.2 children per woman does not, in theory, need thousands of new homes every year. If the native population shrinks, who is it being built for? The answer some give is uncomfortable: for immigration. And there consensus breaks down completely.

The calculations circulating in the debate are brutal. If 700,000 people enter per year, 23 cities of 30,000 inhabitants would be needed each year just to house them. In a decade, 230. That number, they argue, shows the problem is not supply but flow. Others recall that housing was built this way in the seventies and eighties, and that today those neighborhoods are full. The discussion then drifts toward border control, terrain where economic analysis mixes with politics and loses edge.

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What Can Be Done Without Moving a Single Brick?

Liberal recipes also have their place. Protecting private property, toughening penalties for squatting, removing restrictions on rental prices, evicting non-payers within three months, liquidating SAREB (the Spanish bank asset management company), suppressing taxes on first homes, and liberalizing the construction sector. With that, they assure, prices would fall and millions of properties would appear on the market overnight.

The cited example is concrete: in Mieres, with a hospital and all services, half an hour from the beach and fifteen minutes from Oviedo's center, there are three-bedroom apartments with two bathrooms for 85,000 euros. If that is true, the crisis is not about aggregate supply but about supply where people want to live. And there, no new city solves anything.

The Prophet's Track Record

No discussion about Niño-Becerra makes sense without his fame. He became known for forecasting the 2008 crisis and for predicting an even worse scenario for 2010 that never arrived. That double record—he got it right once, failed the next—accompanies him in every appearance. His unemployment and GDP forecasts were more pessimistic than official ones, earning him a loyal audience and an army of detractors.

The underlying suspicion is commercial: that the book sells better than the solution. It may be. But it is worth remembering that a broken clock is right twice a day, and disqualifying the proposal based on who signs it is the fastest way to avoid discussing it.

In the end, the question remains: if the solution is so obvious, why does nobody execute it? That opens the rabbit hole.