Is the wrecking ball about to smash into swathes of Spanish properties built too near the beach?

Sunday Times Home Section, 4 November 2007

The spectre of the mass demolition of Spanish holiday homes is back in the headlines, following proposals announced last week by the government in Madrid aimed at protecting the country’s coastline from overdevelopment. At issue this time, though, are not just a handful of dodgy buildings in Marbella, but thousands of properties up and down the coast and islands that have been built illegally too close to the coastline.

Judging by some of the headlines in recent days, you would think the bulldozers were already revving up their engines to get to work. So is it true that the proposals will lead to mass demolitions that could affect thousands of British owners, and what does it mean for potential investors thinking of buying today?

In reality, the initiative, which follows years of prodigious construction, is about establishing a new development model to replace the now rather hackneyed formula of sun, sea, and sangria. Like almost everything else these days, it is also about preparing for global warming; coincidentally, perhaps, it comes hard on the heels of a recent visit to Spain by Al Gore, the former American vice-president, to pick up an award for his work on raising awareness of climate change.

A document drawn up by the environment ministry entitled A Strategy for Coastal Sustainability argues that Spain should move away from mass tourism and rapid urbanisation. “It is clear that the coastal development model of recent decades is unsustainable,” says the document, noting that holidaying on the Spanish seaboard is “no longer pleasant or satisfying in many areas”. Radical solutions are needed to save the environment and guarantee a sustainable future for the coastal economy, it concludes. Better late than never, I suppose, but it does seem remarkably like closing the stable door after the horse has bolted.

The proposal is full of evidence of overcrowding and overdevelopment on the coast, where 44% of Spain’s population is now squeezed into 7% of its territory, which attracts 80% of tourists. According to the document, 40% of the Mediterranean coastline is built up and 57% of its beaches hemmed in by construction. As a result, 30% of the coast, 51% of beaches and 70% of dune areas are now in trouble. Then, of course, there is the threat of rising sea levels from global warming, which environmentalists say will shave 15 metres off the average Spanish beach by 2050, rising to 30 meters or more in some areas.

It is not just about establishing a new development for the future, though. The document is also concerned with undoing some of the damage done over the past decades – which is where the issue of demolition comes in.

The Ley de Costas (coastal law), passed in 1988, set out to protect the shore by turning all beaches into public land and prohibiting the building of new residential zones within 100 metres of them. The problem is that urban-planning rules in Spain have often been ignored, and so, over the years, thousands of residential properties have been illegally built close to the beach, often with permission from local authorities. Properties that were built legally before the Ley de Costas are unaffected. Though no figures are available, it is thought many of the illegal homes are owned by Britons, most of whom have never heard of that particular law and have no idea that their properties are at risk. Any new plan will have to deal with these properties, which could in theory involve expropriation or compulsory purchase leading to demolition.

For years, the environmental authorities have been knocking down illegal properties on a small scale, but the scope of this proposal is much more ambitious, with an estimated cost of £3.5 billion. It is thin on details, but environmental officials make no bones about the need for demolitions. The government insists the plan will not involve large-scale expropriations, but it is hard to see how the proposal can work without them.

So, does this mean demolitions are imminent? Hardly. For a start, it is just a proposal, not a draft law, and contains few details and no time frame. The next step is supposed to be a big, inclusive, public debate involving all levels of government, business, trade unions, nongovernmental organisations, the public and anyone else you can think of, leading to a commission for coastal sustainability, a panel of experts and maybe, one day, some regulations. This being Spain, the whole process could take years before any actual measures emerge, by which time plenty more concrete will have been poured over the coast.

Furthermore, the Socialist government in Madrid has little power over urban planning issues, which are controlled by regional governments. The remit of the environmental ministry stops at the edge of the beach, so any deal on illegal properties will need the support of the regions.

It is hard to imagine any consensus involving those key regions – such as Valencia and the Balearics – that are run by the right-wing Popular Party, which is opposed, on principle, to any initiatives from its political rivals in Madrid. With national elections due soon, some will see this proposal as nothing more than electioneering by the Socialists, and if the Popular Party wins the next general election, it might well disappear without a trace.

In other words, the chances of widespread demolitions affecting large numbers of British owners any time soon are small. But the proposals do show that environmental concerns, and the scourge of overdevelopment on the coast, are moving up the political agenda – which has implications for anyone now thinking of buying in Spain.

First, the discussion they have provoked is likely to raise awareness of the existence of illegal properties near the beach, without necessarily dampening demand for highly prized beachfront apartments. Indeed, this could boost the value of properties that have been legally built – and so, by definition, are in short supply – while reducing the value of the illegal ones. Investors should bear this in mind. Second, if you want to avoid any chance of future demolitions, don’t buy anything near the beach unless your lawyer confirms that it is legal according to the 1988 law.

And finally, even if you have the money to afford a legal property front line on the beach, you may wish to consider the second line. If Gore is right, global warming will bring the waterfront right to your door.

© Mark Stucklin (Spanish Property Insight)