In article 47 of the Constitution it is proposed that the State should provide decent housing for all Spaniards. The writing of these ideas is made from the personal conviction according to which it would be difficult to complete this constitutional precept if the basic rules of human behaviour and economic activity were not respected. The art of economics consists of choosing hypotheses that simplify a problem enough so that certain characteristics of that problem can be better understood. The future of Law as well as Economics is in highlighting their mutual interdependences. 

Housing has a vital and fundamental importance in the group of modern economies, not only for the outstanding incidence that the real estate trade exercises in the national macroeconomic environment but also, and above all because being a main component of real estate wealth it plays a fundamental role in the configuration of the socio-economic weave of any country. Consequently, the problem of housing is a topic of general interest, and not so much for the importance and necessity of social housing but for the relevance of social interest for housing of all types. 

Hayek showed special admiration for Dr. Bernard Mandeville, specialist in nervous disorders, for two characteristics of human knowledge that this psychiatrist of the XVIII century highlighted: “That we do not know why we do what we do, and that the consequences of our decisions are often very different from what we expect are the two foundations of that satire about the deceits of a rationalistic time that was its initial objective.» 

Socrates’ principle of “I only know that I know nothing” has a special application to rationalistic and positivist law. The legislator wants to achieve this and he in fact achieves the opposite. The perverse, counterproductive and unwanted effects of rationalistic laws are very abundant. To apply these principles to the topic that we are concerned with, that written by the Professor Jose Eugenio Soriano about Ground Law is very relevant. «From general interest a different interest was produced and apart from that of the citizens with regard to town planning. This interest was built technocratically by a group of experts that knew all about land and ground and who took charge of preserving that knowledge zealously as if it were something arcane and mysterious; something very difficult for the citizens to understand, to whom they served from the heights of thought and political action, but who they separated from all decisions. Ground Law has a jargon incomprehensible for most: it is a Law dedicated to the experts who edited and applied it. In each reform, Ground Law became more and more opaque, more distant and more difficult. And only the experts benefited from such hieroglyphics.» But as the whole framework of rules and regulations that affect urban ground and owned and rented housing has so many different and possible interpretations, and so much jurisprudence, the ignorance of those ignorant in law increases considerably. Rationalistic intervention by the peaks of power or hyper legislation can create the worst of possible worlds when, serving public interests with the administrative whim, uncertainty in the content of private owners’ rights is created. On the contrary much more flexibility and freedom is needed so that the antibodies go directly to the wound and to the shortage, and abundance is recovered.

In the case of housing, the “bureaucracy effect” is significantly important. Pedro Schwartz wrote recently: “One only has to take a look at the way of operating and the consequences of effective Spanish legislation to understand the paradox of town planning. The municipality, in spite of the abundance of rural ground, conditions the offer of developable sites to the approval of general plans, classifications, partial plans, assessments and re-assessments. This limits the ground offer, makes it more expensive, and enriches the speculators. To combat speculation, the State intervenes with taxes on capital gains, grants for council houses, or controlling rent contracts, so that the little useful ground is assigned inefficiently. Developable ground rises in price even more… The spiral is relentless. The State causes the market defect and then it intervenes causing a greater defect.» 

It is paradoxical and sad that an under-populated country like Spain, with an inferior density of population to the world average, has such expensive ground. It is not surprising that, Soriano again, Professor of Administrative Law, commented: “Travelling so much confirmed our theses of the enormity of Spain and how the wide steppe died from drought while the only green areas surrounding the populations… were the urbanized areas.» Soriano proposes a simple solution: transferring the burden of proof from the citizens that seek to build, to the State that tries to impede them from doing so. The State and the municipalities should start from the principle that ground is freely developable, except if strictly limited reasons coincide to declare it developable. 

The reduction of ground and construction prices as well as of energy commodities, and liberalization of the markets, implies the automatic decrease in the price of owned housing and the consequent drop in rent making them more affordable for everybody. Wanting to control and organize certain sectors and productions better by means of privileges and monopolies ends up harming all the end users that will have less offer and at a higher price. The importance of these legislative measures, already fearfully begun by the Popular Party, is much greater than that which the effort of balancing deficit accounts in the General Budgets of the State can have.

I conclude by highlighting the convenience of an agile, transparent housing and renting market that presses for a drop in prices, and that at the same time makes the sectoral and geographical mobility of the human factor more flexible. Only in this way will it be possible to fulfil the constitutional precept in the social reality regarding housing. 

JJ Franch Meneu