Last week we kicked-off our new graduation studio ‘Follow the money – Finance, Architecture and the City.’ In order to illustrate the complex entanglement between money and architecture, we showed our students a selection of case studies, amongst which the case of Residential Francisco Hernando in Seseña, a municipality in the Spanish region of Castilla-La Mancha, just 40 km south of Madrid.
Until the late ninety nineties, the area of Seseña was mainly used by its residents for coaxing grain and corn out of the dry earth. However, in the midst of the Spanish real estate boom, when the first new housing developments popped-up in the area, Seseña, for the first time, aspired to become a working-class dormitory town, targeting (young) professionals who could not afford Madrid’s housing prices.
The idea for the development came from real estate tycoon Francisco Hernando also known as ‘Paco El Pocero’ (the Sewer man) – a self made millionaire, born into extreme poverty, who started his career by unblocking sewers, and likes to tell journalists that he didn’t have a proper shower until he was 22. (here a fascinating documentary by Cuatro). Hernando presented a plan to construct a small city, consisting of more than thirteen thousand affordable, but spacious apartments, in an area called El Quiñón, a five hundred acres piece of land just off the highway that runs from Madrid to Andalucía. He named the complex after himself – Residencial Francisco Hernando – and dedicated it to his family by constructing a giant bronze statue of his parents in the middle of the town and naming the main park after his wife “Maria Audena”.
Development of the first apartments started in 2004, for which Hernando’s company Onde 2000 borrowed various billions from banks, amongst which the international bank Santander, and the local saving banks (in Spanish Caja): Caja de Ahorros del Mediterráneo (CAM) and Caja Castilla-La Mancha. Both cajas were, not entirely coincidental, rescued by the Spanish central bank, a few years later. During the years that followed several dozen new apartment blocks, each eight or ten stories high, rose from the dust, and in September 2007, the less than half built complex was opened with a large party including a rock concert for around 5000 guests. A few months later, the Spanish economy started to crumble…
When the Spanish real estate bubble burst, as a result of increasing interest rates, only half of the complex was constructed and less than 2000 houses were actually sold. Due to insufficient funds of Onde 2000, the construction at Seseña was stopped and the banks seized various apartment blocks as a return on their investment.
Today the whole complex looks more or less deserted, planned shops and supermarkets are shuttered, the promised swimming pools are dry and the sporting fields browned over in the baking 40-degree summer heat. The apartments, which were selling for 221.000 euros in 2008, are now being sold by bank Sandander for below construction costs and are currently on the market for 65,000 euros.
This project is symbolic for many real estate developments in Spain during the period 1996-2008, when housing prices grew astonishingly, leading to extreme optimism, large urban developments and speculation. In this period, Spain constructed more houses than the UK, France and Germany together, while the construction sector accounted for a fifth of all jobs created. When the housing bubble popped in 2008, Spain became one of the worst affected countries. Across the country there are a million vacant dwellings like those at Seseña making it the core cause of the country’s economical crisis. In Seseña only few apartments were sold, most of them now uninhabited. The Spaniards that bought them with 100 percent mortgages, or as investments for their retirement, are in the impossible position to compete with banks to offload them for huge losses. As for Francisco Hernando, he tried to move his business to Equatorial Guinea a former Spanish colony in West Africa, and is now trying to hit ground in Saoedi-Arabië.