Some thoughts on whether increasing the supply developable land really cheapens real estate prices: a historical perspective based on the case of Bilbao c. 1900

Abstract

The author opens his paper by commenting the scarcity of cheap housing suffered by Bilbao at the turn of this century and the decision of its city hall to remedy this lack by a 'Plan de Ensanche!' (Extensión plan) drawn up in line with the thinking of those times and the territorial and city planning instruments then available, a plan which was to be later even further widened in its scope. We are told that the amount of ground available for building was both limited and dear and that it was then held that if the amount of ground available for construction were to be increased, it was considered axiomatic that it would then become the cheaper. In keeping with this line of thought, all the ground which could conceivably made available was so in the hope that free market adjustment would bring down prices. It did not. The system own structural defects and the proper peculiarities of the city itself and its siting put a break on this planned expansion. The author comments that by 1924, this growth of the municipality, which in that year should have been completed the plan's projections, was still short of being half completed. Arguing from this example, the author maintains that the self-same thin. king on which the Bilbao scheme was grounded still prevades much planning and that the Government's latest guidelines are but a reiteration of the old theme that flooding the market with ground re-allocated to building purposes will ever lower the cost of the same and thus the buildings put up on it.The paper aims at putting this affirmation in question through historical analysis.