Town halls turn to traffic fines to plug gap in revenues from property slump

The Spanish online paper ‘’ reports that town halls in provinces like Alicante have turned to traffic fines to help plug the gap in revenues left by the retreating construction sector. Drivers in regions with lots of building sites at a standstill should be on their guard.

In the municipalities of Alicante, revenues from traffic fines have surged 121% in the last couple of years, as town halls scramble to find alternative to construction licences as a source of revenue. Motorists present an easy target.

As Spain’s property slump worsens, town halls in areas affected by the slump are banking on ever larger revenues from traffic offences like speeding tickets and parking fines. The city of Alicante’s budget for 2008 forecasts an increase of 159% in revenues from traffic offences.

All of which provides more evidence of how hard municipal finances are being hit by the real estate sector downturn.

The legacy of Spain’s speculative building boom, and mindless urban planning, is that town halls are likely to have to slash spending on municipal services in the coming months and years. The ‘ghost town’ urbanisation of the coastal strip, where many properties are second homes left empty for 11 months a year, are likely to suffer the most from municipal neglect. The risk is that large swathes of development on the Spanish coast will start to look even more shabby than they already do.