The very top of Cebolla is on the edge of what seems like an endless plain of farmland broken in the very far distant horizon by the Gredos Mountains. They are a solid and majestic range, often snow-capped even into June. To the left we beheld some of the nicest and most modern homes in town. Some are somewhat standard run-of-mill semi-detached units, but others are quite elegant. Handsome porches; plush gardens; a refreshing pool. A stroll through their streets might give the impression that Cebolla was a community undergoing a period of true bonanza. Wealth and ostentation. Somehow, the hard times Spain had endured the previous years had passed over the town, as if someone had painted a mark of lamb’s blood over every front door. That might have been true for some, but not for most. The harsh reality would be found elsewhere. Not far off at all.
Like Scrooge’s speechless Ghost of Christmas Yet to Come, Fernando pointed silently to the unfinished remains of a massive Almazara housing development which had been abandoned years ago when the economic bottom fell out. There must have been easily one hundred condos on the cusp of being occupied and owned by excited families hopeful to start a new life. Instead, they had turned into a monolith to disappointment and broken dreams. This went far beyond just letting a few dozen people down. This was pulling the rug underneath nearly half the town and ruining whole lives. It was tantamount to canceling the Olympics two weeks before the opening ceremony and telling athletes who had devoted their lives to preparing for them that they can no longer go. Thanks for your efforts. Screw you. Go sell running shoes at a sports outlet. You just don’t do it. You just don’t do those things. But there are those who do, and we saw the work wrought with our very own eyes.
Let’s be honest with ourselves, the units themselves were nothing to write home about. Sharp, square structures cemented together with millions of bricks, the building material par excellence in that region and American high schools alike. Their design sorely lacked proper illumination, a defect so very rampant in homes in the center of the country. It’s a question of tradition, I reckon. In the past, this made sense when houses could resort to little else when trying to combat the intense summer heat; but in today’s world of air-conditioning, there seems to be no excuse. All that light. All that beauty. Closed out. It was an utter shame. But that wasn’t the point, here. They were homes. I kept thinking about this over and over as we walked around the edges of the complex. Homes for people eager to say were theirs.
Fernando rubbed his belly and scratched his head, which is what he always did when he was overcome with despair. “Doesn’t this just suck! Imagine all those people who got screwed over.”
“It’s just awful,” agreed Laura.
“Where are they now?” I asked.
“Who knows? Some are gone. Others, I couldn’t tell you. These,” he walked up to me so close I could smell his aging breath. “are the people no one talks about. These are the nameless victims. Living people living in a living common grave known as poverty and anonymity. No one cares about them. They don’t give a crap. A living memory of a living history. A living death with no gravestone. Where are the politicians now?”
“How many of these goddamn corpses are there?” I asked.
“Here? Who knows! But in Spain, it runs into the thousands. Tens of thousands. These are all over the country. Not just Cebolla. How many? A lot,” replied Fernando frankly.
A lot, indeed. You see, what we were staring at was not an isolated example of a town paying the price for its own private foolishness. This wasn’t a one-off case of some naïve community suffering the embarrassing consequences of a breakdown in a fragile system bound to crash at any time. This had nothing to do with a local group of greedy individuals with euro symbols in their eyes hoping to make a killing on the real estate market. Nor was it just some gang of regional banks taking advantage of young couples and families who were desirous to call themselves homeowners. It was all of them put together; and not just in Cebolla. It had happened all over the country, spreading like an uncontrolled virus; like the flu of 1918 or the plague of 1348. A virtual scourge. It became known as the Great Spanish Real Estate Bubble, and by the time it reached a breaking point in 2008, it was a humongous but delicate sphere about the size of a planet just waiting to explode. But it’s a far more complex story than just rampant speculation. It’s not just about understanding a crisis. It’s about understanding Spain.
You see, possessing property in Spain is a tradition that goes back a long way, and it became especially popular during the latter years of the Franco dictatorship. The regime promoted home-owning and prices were accessible. Very accessible. I wouldn’t go as far as to say they were giving them away, but they were as close as you could get. Units back then went for 200 euros a square meter, which meant a lovely-sized 150m2 place in downtown Madrid could be acquired for a laughable €30,000. On top of that, the government offered incentives, like tax breaks and subsidies, to encourage private ownership.
It worked. Not only was it possible to buy and own an apartment or house, purchasing more than one was not unthinkable. I can personally vouch for this. I can’t think of a friend in Spain whose parents from that generation didn’t own more than one property. Some were proud proprietors of half a dozen, snatching up a flat in Madrid for their kids, a condo in the Sierra de Madrid, grabbing a beach apartment for next to nothing in order to flee the sweltering summer city heat. And you didn’t have to be a millionaire. A taxi driver might be the owner of two apartments. A fishmonger, three.
The most amazing thing was that, in most cases, families pulled it off on just one salary per household, as many women did not have steady employment and many more were stay-at-home moms. Just how was this possible might you ask? I struggle to put my finger on one sole explanation, but I can think of a number contributing factors, in addition to all the governmental enticements; they mostly have to do with how the Spaniard thought and behaved back then.
First of all, though salaries were lower, life was cheaper too. Schooling and university were practically free; socialized medicine made paying directly for private healthcare an afterthought; supermarket food was (and still is relatively speaking) economical, and people tended not to engage in the intensive social life that they have for the past 30 years. This last point cannot be stressed enough. People worked long hours and for the most part stuck to dining at home and saving money. Utilities like phones and electricity were used with a frugality that would have made Scrooge moan with pleasure. If you left a room, you turned off all the lights. And if you could get by with just one lamp where you were sitting instead three, then all the better. People saved, scrimped, economized and optimized to near OCD levels. It was admirable the way they could expel superfluous waste from their lives; consistent with those who have suffered the hardships of war and post-war scarcity. But kind of sad, too. It never hurt to live it up now and again.
The systematic penny-pinching went on throughout the year, even at times when people generally splurge, like summer vacation. As August rolled around, the height of the holidays, the Spanish would close their shops and offices, jump into their miniature automobiles, regardless of the size of the family, join interminable miles of the worst traffic humanity has managed to bestow upon the lowly vacationer and, in hordes, head for one of two main destinations: the “pueblo” or the “playa”. The former was normally the hometown where one of the spouse’s family was originally from. This could have been just about anywhere, but I have reached the conclusion that for some paranormal reason an inordinate proportion of them came from the province of Avila. I don’t know why, it just happens to be that way.
Hanging out in the pueblo may not have compared to sipping a caipirinha poolside, but it had its enviable advantages, there is no doubt. Accommodations were generally larger and better and, more importantly, free. People stayed in for most meals and costs were often shared with the family who lived there year round. The food was tastier and the nights were cooler. Any special events, like joining in the festivities at the local fiestas, or a dinner at the finest restaurant in town, were often a far cry from what you’d shell out back in the capital. The savings literally ran into the thousands every year. It makes for one damned cheap summer vacation, I can assure you.
Then there were those who substituted it for a beach apartment. Purchasing a place on the coast may sound extravagant, but much less so than one would think. Game shows would give away flats valued at $20,000 in the 80s. And because the consumer’s taste for owning grew more and more insatiable, developers kept building at an insane rate. Today there are so many available that you can practically pick one up at a supermarket cash register next to the power drinks and chewing gum.
Traditionally holiday habits at the beach were no different from how the Spanish conducted themselves at home or in the village, but were in stark contrast to the way foreign visitors’ were used to spending their cash. For the British, Germans, Swedes and the rest of mainly northern Europeans, it was no holds barred when it came to living it up along miles of beach along exotically named shores like the Costa del Sol, the Costa Blanca, and the Costa Brava. They celebrated life in a way they could rarely do back home, a habit that has carried on to this day.
Many holiday-makers are families enjoying the most of their break through plenty of harmless fun in the sun. This includes swimming and tanning, mixed in with low-cost shopping and easy dinners at friendly pizzerias or tapas bars, and capped off with a little flamenco music before retiring. But other visitors have plans in mind that are decidedly more hedonistic in nature. Activities that fall into this category include: extended meals out, drenched with liters of Spain’s seemingly endless supply of beer, wine and sangria; late night clubbing ‘til dawn; passing out on anything that supports your weight and engaging in different forms of extreme raging like leaping from balconies into a pool below. Resort towns like Magaluz, on the island of Mallorca, have earned a dubious reputation for allowing, almost fostering, unfettered moral conduct. It brings in plenty of cash, mind you, but a good deal of trash too, not to mention your fair share of tragedies. Google “Brit killed in Spain” and chances are some recent item of news within the last month will satisfy your search, and usually in a way related to boneheaded behavior.
Decades ago, this conduct was associated almost exclusively with foreigners, while Spanish families continued their parsimonious ways. They ate all their meals at home, and if they spent a day at the beach, they would pack sandwiches, beer and fruit for a sandy midday lunch by the water. On special occasions, they might indulge in a paella at a chiringuito, wash it down with the house wine and gaseosa, or order a Rioja if they were going all out. Evenings featured turning the lights off to a minimum, opening the windows to encourage a draft, complaining about the heat and the mosquitos, batting hand fans, sitting in front of the blue hue of the TV and watching variety shows or track and field championships, playing cards or Parcheesi on the terrace table or going for a stroll along the boardwalk and getting an ice cream at one of those seasonal plastic kiosks.
And that was about it. Families had invested enough in the apartment. The rest was business as usual. Kids were told they should be lucky they had a place to go to in the summer. And kids of all ages understood that. They splashed and screamed in the water, patted down their sand castles, buried their siblings up to the neck, hunted for crabs, snorkeled around the coves, kicked around the soccer ball, hung out with their gang of summer friends, fell in love, and worried little about anything else.
But it was this very same generation of youngsters who, once grown up, no longer shared their parents’ liking for austerity. They liked the idea of owning property, but they were also keen on enjoying the coast the way the foreigners did. Unfortunately for them, the world was changing.
The first sign of trouble came in the late 1980s when housing prices increased notably. Far faster and higher than the economy could keep up with. The asking prices tapered off during the Spanish recession of the early 1990s, but then the real big hike kicked in almost immediately afterwards, between 1996 and 2007. During this eleven-year period, the cost of a humble abode in Spain utterly skyrocketed. Apartments that had gone for €120,000 in 1995 were being signed away for €600,000 12 years later, just months before the markets crashed. Yes, that’s a 400% mark up. Salaries, as you can imagine, didn’t even come close to that, and the switch in 2001 from the peseta to the euro raised the standard of living even higher. Suddenly becoming a homeowner, despite two incomes, was looking like a near insurmountable challenge. But since the new generations wanted to emulate at all cost what their parents had done, they had to find a way to finance their dreams…at all cost.
That’s when the banks got in on the fun, and made things worse. A lot worse.
In order for families to take on overpriced properties with underpaid jobs, huge amounts of money had to be dished out, often with nothing down, and for horrifically long-term loans, some reaching 30, 40 and up to 50 years in duration. Do the words “indentured servitude” come to mind? In some cases, the mortgages were gobbling up to 50% of a household’s monthly income by the first day of the month. They practically imprisoned people financially. Common sense dictates that no sane person would take such risks, but the Spanish’s need to own a home was so deeply ingrained in their psyche that people took the dive and hoped for the best, which, of course, did not come. In fact, the exact opposite entered the scene.
On top of that, consumer habits changed radically in Spain. Saving, never an easy thing, became next to impossible as the Spanish ate and drank out more than ever, and spent bundles on lavish vacations, expensive electronics and ever-fancier cars. Should times get hard, what would be left to tide people over?
Then came greed. Many individuals started investing in up-and-coming properties for speculative reasons. Flipping, in short. Property developers were more than happy to provide the goods for the voracious appetite to buy and sell and make a quick buck, so they started ripping up land all over the country and building condos and communities at a frightening speed. Immigrants from developing countries flocked to Spain to accept the menial construction work that no one here wanted. All this unbridled construction led to a boost of employment and, as a result, cranked up Spain’s economy to a dizzying pace. At one point, GDP growth stood at nearly an astounding 6%. The country was enjoying a degree of prosperity it had not known since its return to democracy. “¡España va bien!” was Prime Minister José María Aznar’s catch phrase during his eight-year tenure. Spain is doing great.
But there was another catch: the economy had swelled thanks to the good fortunes of one very volatile sector that was sustained by tens of thousands of workers whose employment situation could not have been more precarious, and was financed with a ton of money no one really had. And all to build and sell units no one really needed or had any intention of buying. Spain had added some 5 million units to its arsenal of real estate between 2003 and 2007, a delirious increment that translated into more homes than Germany, Italy and the UK combined. I’ll leave the ensuing disaster for you to envision. All it would take was for something to go wrong and the house of cards would tumble to the ground. That something took place in the fall of 2007 on the other side of the Atlantic Ocean in a place called Wall Street.
Though things began to fall apart very quickly with the stock markets, Spain continued with the delusion that it would somehow resist collapse, unable to accept the impending catastrophe that awaited it. It took about a year for the true effects to be felt, but once they came, they proved devastating. By 2013, housing prices had plummeted by an average of 37%, and in the areas with less demand, even more. Spain still leads all Eurozone nations with unoccupied units, over 3.4 million (at least) are vacant. And that’s not counting the ones that were half-finished, or nearly completed, like the forlorn Almazara Apartment complex of Cebolla.
The developer of the Almazara homes, I might add, was so up the yin-yang in debt, rumor has it he basically had to flee before they lynched him. He had already been working on his own home, a fancy three-story corner building in the center of town. It’s been rotting ever since. On the plywood board of the first floor window is another slice of memorable poetry in the form of graffiti that in a word sums up how much he is missed: ¡¡¡ADIO$!!!
