International Herald Tribune, March 18, 2006
Valencia land law: 'We feel stuck'
By Kevin Brass
Recent changes in Valencia's land law have done little to settle Janice Fisher's fears that her Spanish dream home is turning into a nightmare.
Eight years ago she and her husband, Graham, bought a two-story house in the tiny town of Tibi, in the mountains west of Alicante, far from the high-density developments of the Costa Blanca.
Now developers want to build more than 1,000 new houses in Tibi. And, under the terms of Valencia's law, the Fishers may be forced to give up part of their land and to pay large fees to support the project.
"We're losing a lot of sleep," Fisher said. "We can't get out of it. We can't sell. We feel stuck."
For years, homeowners in fast-growing Valencia, many of them expatriates like the Fishers, have battled the law known as Ley Reguladora de la Actividad Urbanística. Enacted in 1994, the law gives local governments in the province extraordinary power to seize land and to raise money for infrastructure costs as a way to encourage new development.
Similar to eminent domain in the United States or compulsory purchase in Britain, Valencia's law was designed to prevent large landowners from blocking development and to ensure that road construction and services like water and sewage systems kept pace with construction. Other regions around Spain have similar laws.
But in the Valencia region, where 70,000 houses were built last year alone, critics charge that the law has been twisted to take land from small landowners to help large developers, often with little formal notice or review. Many property owners have faced the loss of their homes if they did not pay fees to support development, even if they did not want to do so.
"It's just a badly drafted law applied perversely," said Russell Thomson, the British consul in Alicante.
After receiving 15,000 signatures on petitions complaining about the law, the European Parliament condemned it last December and urged the province to place a moratorium on new development. A few weeks later the Valencia government passed a new law, Ley Urbanística Valenciana, promising homeowners more notification about pending actions and an expanded appeals process.
"No law can assure the total satisfaction of any of these interests, but it can assure a just and equitable treatment for all of them," said Rafael Blasco, housing minister for Valencia Province. The new law, Blasco said, "provides a new frame that supposes more guarantees and more transparency for the owners and more just compensation."
But homeowners say the new law does not address the main problems.
"There is a lot of cosmetic work, but the underlying principles are essentially the same," said Charles Svoboda, a retired Canadian diplomat who is president of Abusos-Urbanísticos No, a group representing unhappy property owners.
José Crespo, an attorney who works with the group, said; "In my view it doesn't improve the situation. It only gives people more time to react. Even if you are notified, there is no way for you to defend your house."
Svoboda and his organization already have presented a challenge of the new law's constitutionality to the federal government in Madrid. In addition to pursuing the case with the EU, they are taking the battle to the European Court of Human Rights, charging that the law violates property rights and fairness standards.
Also, lawyers representing homeowners are going to court to challenge local governments' approval of dozens of projects before the law went into effect on Feb. 1. "We're still not there, so the fight continues," Svoboda said.
Under the new law, landowners have little recourse when a development is announced, unless they offer an alternate plan that is accepted by all parties. "Our hope of saving our house is if we can convince town hall to move a street," said Enrique Climent Laguarda, who lives on a 2,000-square-meter, or 21,000- square-foot, property that his family has owned for 33 years in Castellón, north of the city of Valencia.
Climent, who works for the provincial minister of taxes, estimates that local homeowners have spent €200,000, or $240,000, defending their property. So far, he and his neighbors have been able to argue successfully in court that the governments of several towns unfairly reclassified private land.
"This gives us a position of strength to negotiate with town hall," Climent said. "The problem is that this is not common. We were lucky with our claim."
Despite the controversy, building has not slowed in Valencia, one of Spain's hottest markets - fueled, in large part, by foreign buyers looking for a place in the sun. Housing prices in Valencia and Costa Blanca appreciated 16.5 percent in 2005, according to Housing Ministry statistics, despite some slowdown in the appreciation of real estate values in most coastal areas.
However, sales agents in Valencia report a new wariness among prospective buyers, who have heard of the "land grab" law. Clients are routinely cautioned to hire an independent lawyer to track property records and to investigate any local urbanization plans.
Blasco, however, argues that the headlines do not represent the reality of development in Valencia. The law has allowed the conservation of local land and "judicial clarity," he said, in addition to raising property values for current homeowners.
"It is necessary to bear in mind that the sector of the construction, together with the tourism, represents a high percentage of our economic growth and our employment," Blasco said.
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