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Dossier: Crack, Bubble, Pop! Speculations, Bubbles and Crashes. Seminar KTH 2013 Claes Sörstedt

Casestudies Kilamba, Angola – Marina Vila Ordos, China – Rasmus Westman Cairo’s Desert Towns, Egypt – Valentina Reimer Drafi, Greece – Stavros Chrysovergis Mossfellsbaer, Iceland –Jordan Lane Adamstown, Ireland – Clive Hennessey St James Wood, Ireland – Louis Bergis Złota 44, Poland – Grzegorz Owczarczyk Alguaire Airport, Spain – Adrian Elizalde Sanchinarro, Spain – Jorge Pajares

Casestudy Kilamba, Angola | Marina Vila


Marina Vila Reyes Crack, Bubble and Pop! KTH Kungliga Tekniska högskolan

Name: KILAMBA Nova Cidade. Location: 30 km outside Luanda, Angola, Africa. Size: 5,000 hectares (12,355 acres) Built space: 750 apartment blocks Client/builder: China International Trust and Investment Corporation (CITIC) Cost project: $3,5 billion dollar Time of construction: 3 years Planned population / capacity: 500,000 inhabitants Cost of the property: $100,000 Kilamba New City, is a new and large development located in the outskirts of Luanda, the capital city of Angola, Africa. The city is considered as a mixture of oil speculation, cheap money, and a seriously missed ambition for housing needs. The development cover 5,000 hectares (12,355 acres) with lots of public spaces almost completely devoid of actual residences. Angola’s newly-completed ghost city is mostly made up of a collection of 750 identical 5-, 8- and 11-story apartments buildings, a dozen schools and more than 100 retail units. The city is considered as one of several satellite cities being constructed by Chinese firms around Angola1. To help identify neighbourhoods, blocks buildings are painted in bright primary colours identifying the different areas which formed the whole new city.



Angola gained independence from Portugal in 1975, but the governing Popular Movement for the Liberation of Angola (MPLA) and the rebel group Unita were already rivals. The Soviet Union and Cuba supported the MPLA, then Marxist, while the US and white-ruled South Africa backed the rebel group Unita as a defence against Soviet influence in Africa. After 16 years of fighting, that killed up to 300,000 people, a peace deal led to elections. But 1. Retail of Business Insider newspaper article Check Out The Massive Chinese-Built Ghost Town In The Middle Of Angola, written by Mamta Badkar. 3 July 2012. (1) Location of Kilamba from Luanda, Angola’s capital, Africa. (2) Aerial picture of the city area.


the rebel group resumed the war, and hundreds of thousands more were killed. It was not until 1999 when the final peace accord was signed, leaving a country rich in natural resources but littered with the ruins of war.2 The country had to rebuild its infrastructure, retrieving weapons from its armed civilian population and resettling thousands of refugees who suffered the fighting. Landmines and impassable roads have cut off large parts of the country. Angola's transformation has also been immense since the end of the war. Kilamba is one example, it was Angola's post-war top reconstruction that at the same time contributed to the election pledge made by President Jose Eduardo dos Santos in 2008. The new city was the jewel of government promotional advertisements which showed smiling families enjoying a new style of living away from the confusion of Angola’s capital, Luanda, where millions of people live in slums. But all these advertisements were just false, and despite all the hype, nearly a year since the first batch of 2,800 apartments went on sale, only 220 have been sold.



The company China International Trust and Investment Corporation (CITIC) sank $3.5 billion dollars into this city formed by identical apartments. The CITIC Group is a state-owned investment company of the People’s Republic of China, established by Rong Yien in 1979 in Beijing. The initial aim of the corporation was to attract and utilize foreign capital. Meanwhile introduce advanced technologies and adopt scientific international practice and management. One of the main reasons of the creation of Kilamba New City by the Chinese company was that Angola is one of Africa's major oil producers country, although at the same time it is nonetheless one of the world's poorest countries. In fact, Chinese influence has grown massively in recent years across Africa, powered by natural resources such as oil, iron and copper. These natural resources are shipped to China and then end up back in Africa as vehicles or footwear. The Trade between China and Africa was worth $108 billion dollar by the turn of this decade, a massive increase comparing to ten years before when was worth $6,2billion dollar. Trade deals with more than 40 countries have been signed, including Uganda, Kenya and Algeria.3 The Chinese communist government also provide billions in loans each year to states in Africa, extending their political ideology as well as economic influence around the continent. It is estimated that more than a million Chinese people have moved to Africa since trade started booming. British Prime Minister David Cameron criticised the 'authorisation capitalism' of China, by saying it was unsustainable in the long term. Moreover, he admitted: “the West was increasingly alarmed by Beijing’s leading role in the new scramble for Africa”.3 China has invested billions of dollars into Africa over the last decade, as a substantial assistance to Angola trying to solve their problems in front of the end of the last civil war. But the reality is the huge country believe that Africa can become a 'satellite' state to solve its own problems of over-population and shortage of natural resources. Nowadays, a astonishing number of 750,000 Chinese people have already settled in Africa, and more are believed to be 2 Extract from BBC News Africa Angola profile. 4 September 2012. (3) Slums of Luanda, Angola’s Capital, Africa. (4) New City of Kilamba, 30km from Luanda, Angola’s Capital, Africa. 3 Extract from Daily Mail article Why has China built a ghost town in Africa? written by Daily Mail Reporter. 4 July 2012.


on their way to the continent. The strategy has been devised by officials in the Chinese capital, where they have estimated that China will need to send 300million local people to Africa to solve the problems of over-population and pollution. The Asiatic country does not just try to solve the situation of some African countries, but is trying to seize them as a focus of production. The new increasing 'colonisation' of Africa by China seems to be wanting the resourcerich continent as a 'satellite state' in recent years and it can be seen easily everywhere. The red Chinese flag is flying across the poor continent. People is driving luxurious limousines and shopping at their Chinese expensive boutiques. However, the main problem of the Chinese corporation CITIC was the investment into a city with enough housing units for 500,000 inhabitants but, in contrast, few local people can afford one apartment and its development feels and looks more like a prison camp than a community. The city was built for people who never move in, they leave those who did with a worthless property they cannot sell. Just a ten percent of the apartments are apparently sold at a starting price of $100,000. Nevertheless, few local people, even in the relatively wealthy capital, can afford them. More after, some apartments were being advertised online costing between $120,000 and $200,000. Nevertheless, these prices were out of reach of the estimated two-thirds of Angola local people, who live on the less than $2 a day.



As of July 2012, the Kimbala New City buildings were largely complete but still unoccupied. The government adverts showed its citizens enjoying a stylish lifestyle completely different from the dust of the Angola capital's slums. Nevertheless, the enthusiastic promotional material from the government was misleading, it was built a million new homes in four years, but Angola does not have a large middle class able to buy such homes. The complex is formed by a rainbow cluster bomb of buildings. The whole typologies have been inspired by the mega-scale housing projects of Chicago’s Cabrini Green and the Soviet Era block housing, which lead to a better life for the occupants. However, the housing complex won’t be for these local people, more likely they will end up serving a huge immigrant population, more probably Chinese people, feeding the flow of oil to the huge country in the coming years. The car-dependent culture is disconnected from the capital and the lack of basic amenities like local shopping and gathering places seem to doom the development to new city. It can be found just dozens of repetitive rows of coloured apartment buildings, with balconies completely empty. There are hardly any cars and even fewer people. There are no actual shops on site, there is nowhere to buy food. Only a handful of the commercial units are occupied in the area, mostly by utility companies and exist the exception of a new hypermarket, located at one entrance of the city. People just can hear voices bouncing off all the fresh concrete and wide-open tarred roads. The place is eerily quiet. The city is completely empty.

(5) Situation in Luanda. (6) Coloured New City of Kilamba, Angola, Africa.


Casestudy Ordos, China | Rasmus Westman

Kangbashi New Area The ghost town of Ordos.

What is sometimes referred to as the ghost town of Ordos is a district called Kangbashi New Area, which was planned in 2003 and the starting point of construction in 2004. Kangbashi was supposed to become the new downtown area of the district of Dongsheng. This was the old centre of Ordos City, which despite its name is mainly a rural area located in the Ordos region of Inner Mongolia. About 1.5 million people are currently living in Dongsheng, and the new Kangbashi area is located about half an hour away from Dongsheng.

Ordos is one of the twelve largest subdivisions of Inner Mongolia. It consists of mostly desert, so why did anyone make the decision to start such a large new development as Kangbashi is, in a city like Ordos? The Ordos desert is one of the riches regions of China. It has been ranked richer than Beijing (2008), and this is because of the regions big supply of natural resources. One sixth of the coal reserve in China is located in the region, which has been making the former farmers of Ordos instantly rich when selling of their land to the coal mining companies. This coal rush to the Ordos desert started over 20 years ago and together with this coal mining the economy of Ordos is built up by a textile industry producing wool, production of building materials, petrochemicals and electricity generation. The last of which the company Yianh Juan water engineering co. is one of the major acts, and also the main investor in the Ordos 100 project - a project run by Ai Wei Wei and Herzog de Meuron, which was supposed to be one of the key attractors of the new developed area. Having the large coal reserves of the Ordos desert in mind, the plans for Kangbashi New Area were supposed to meet with the many job opportunities that would be created by the coal mining industries of the area, and thus a lot of people would be expected to move to the region. Kangbashi was planned for an area of 355 square kilometres, located 25 kilometres from the existing city of Dongsheng.

The Kangbashi New Area was planned to be the new downtown area of the Dongsheng district. It was supposed to be the new home for one million chinese workers. Parts of the new development showing of a typical big citytypology, while other parts were to take the appearance of more exclusive suburban areas. The area was given facilities such as library, theatre and museums of good quality. Large office towers, administration centres and government buildings planned to house the government of the region of Ordos were constructed. The investors were extremely enthusiastic about the new city district, thinking that this would become one of the most important and richest cities in the world in a near future. The area was expected to be the new home of the Chinese middle-class. Kangbashi might for many investors have been expected to be one of the most promising projects of today. It was nicknamed “the Dubai of Northern China�. But something has not worked out the way the planners of the city expected. In 2010 something around 35 square kilometres of the New Area had been built, with room for about 300 000 people. But only somewhere between 20 000 to 30 000 people were actually living in the area. The big boom of Kangbashi New Area did never happen, and the city is today looking like a completely abandoned city. But of course this city was never abandoned, since not enough people has ever lived here for it to even look populated. By 2010 the cost of the city had reached 161 billion dollars. Streets beneath massive office and apartment buildings are today completely empty, as well as the many squares around Kangbashi New Area. These squares are crowned with massive bronze sculptures of historical references important to the area. Big horses and Ghengis Khan statues makes the impression of the city maybe even more strange than just the empty houses.

So why is this happening in Ordos? Why is the city becoming a large ghost town? The Chinese economy is booming, and the state is practicing a strategy where they capitalize on low wages to spark growth through export. This makes it possible to build up new industries very quickly, which then are guided by the Chinese state to advance further and create high levels of economical growth. But eventually this is bound to crash. And much points to that this is simply what is going on in Ordos. What was once a promising area for economical growth has maybe developed to far to further attract investors and home buyers. The home prices has gone from 1100 dollars per square foot in 2006, to 470 dollars per square foot in December 2011. To many this might be putting out a signal that the Kangbashi New Area is an already lost project. Maybe the whole project has been to big already from the beginning to ever be able to attract people. This kind of large development is maybe destined to look like a ghost town already from an early construction phase, just by the size of it. One cause for the low numbers of people actually moving in to the city might also be that many investors have been buying apartments in the area as an investment, and not to buy a place live. Many apartments have been sold without anyone moving there. And those who did invest in the city have now started to loose the money they put into the project. The Chinese building boom that is what started not only this project, but, many other similar projects where cities are being built from scratch, is being criticised. The boom is by some expected to turn into a bubble bursting with even greater effects than the United states bubble burst. And Ordos is sometimes referred to the city where the Chinese bubble has already popped. At least outside of China this is believed to happen, while Chinese economic commentators still tend to express a high belief in that the state will manage to turn this around and create the balance between supply and demand that would turn the ghost town of Ordos into the big and important city it was meant to become.

The Ordos 100 project One of the most famous projects related to the development of the city of Ordos is the Ordos 100 project. This is an area planned to consist of 100 exclusive architect designed villas of each 1000 square metres. The plan for the area was made by Ai Wei Wei, who together with Herzog and de Meuron have selected the one hundred architectural offices from all over to world who are to be invited to contribute with each one of these houses. By inviting all the participating architects to come to visit Ordos and meet with the people behind the program, the Ordos 100 project was started in the year of 2008. The project was at first greeted as an important step towards world wide communication between architects, but as one of the participating architects states in the documentary about the project (directed by Ai Wei Wei) it soon turned into something of a different, more complicated situation: “it’s a zoo! It’s a zoo! In all ways you can imagine it’s a zoo!”. The project was financed by Cai Jiang, a local private investor making a fortune of milk production and coal mining. But already at an early stage the project turned out to be more complicated and confusing than the developers had initially thought. The project has, even though so many big and promising names within architecture being involved, most likely been abandoned. The project website has disappeared, and information about how far it actually did get is hard to find.

Casestudy Cairo, Egypt | Valentina Reimer

Seculations, Bubbles and Collapses Seminar_KTH Stockholm Spring Term 2013 Teacher: Claes Sörstedt Casestudy: Cairo's Desert Towns Valentina Reimer MA // Arts Academy Stuttgart

New Cairo Name: Location: Size: Built Space: Planned population / capacity: Client / builder:

New Cairo City N 30° 02.114 /// E 31° 27.579 120 km² housing area represents 69 342 000 m², 60,12% of the total area 2 to 2.4 million government, investment companies, private investors

area of „New Cairo City“

The ongoing city planning project „New Cairo“ is a new satellite city of Cairo located in what was formerly desert. It is a response to the perceived narrowness, the housing shortage, the noise and the inhospitality of the old city quarters of Cairo. „New Cairo“ goes far beyond the usual development of a far out suburb. About 17 to 28 kilometers east of downtown, private investors are invited to use the developed plots on what was until recently a hilly desert area of about 120 square kilometers. Accessible by a radial highway system, it is planned to accomodate modern requirements and offers a leisure-oriented infrastructure that is supplied by shopping centers, public green areas, sport clubs, and it is characterized by an above-average quality of the apartments, homes and villas. It is also the home of the new campus of the American University in Cairo, as well as the German University in Cairo, the Future University in Egypt (FUE) and the Canadian International College (CIC).

History During the last three decades, Cairo has expanded informally and dramatically over the scarce agricultural land surrounding it. In the mid nineteen nineties, the Ministry of Development and New Communities established a new satellite for Cairo on its east side in order to relieve the long lasting urban crisis. A crisis that was and still is characterized by the increase in population density and the spread of slums and informal settlements. Most inhabitants of Cairo live in lowstandard and inadequate conditions, including habitation in cemetries, over-crowding and explosive occupancy rate. In 1970, the Egyptian government adopted two concepts, which provided the bases for the Master Plan of the Greater Cairo Region (G.C.R.). „The Optimum Bulk and Containment“ concepts, to make a barrier to urban uncontrolled extension, and „Self Sufficiency and New Urban Communities“ concepts, to meet population growth and to encourage migration from rural areas and existing cities to the new urban communities. Long-term strategies were evolved to solve Cairo‘s density problems. New axes were designed to make a relation between the cities and the new urban communities, linking the urban area of G.C.R. with other economic regions and the new build settlements to make the urban region work as a whole system. „New Settlements“ should organize the growth out of the existing urban areas. Afer the idea of decentralisation the government divided the G.C.R. into 16 homogeneous sectors. Each sector should be managed as one unit and form a single core, subdivided into smaller divisions to prevent Cairo becoming too big and to ensure better living conditions, job opportunities and the improvement of current service standards. This differentiation was also supposed to strengthen each sector‘s identity.

the 16 homogeneous sectors of Greater Cairo Region

another density of the „new build“ and the „old city“

the districts and gated communities of „New Cairo City“

New Cairo City The formation of the New Cairo City was planned to establish 5 new settlements (NS) out of the sector 10 to the East of G.C.R. to accommodate the target of 1 million inhabitants. As the planning of all settlements should apply unifom concepts, every new settlement has an area of about 600 ha to harbour about 250 000 inhabitants, leading to a density of 72/ha. It should be surrounded with a green belt for entertainment activities and a center for residence, work and shopping. A new settlement integrates three distinct urban levels. A city center with public facilities, a sub center for each of the 4-5 districts with about 50 000 inhabitants of one new settlement. Furthermore, each district is devided into 4-5 neighborhoods of two main types, which provide the neighborhood level. The low and medium income type with a capacity of 10 000 to 15 000 inhabitants, designed to absorb 70% of the population and the medium and high income type with a capacity of 8000 to 12 000 inhabitants targeted for the wealthier population of 30%.

„New Cairo“ has three main types of residential areas. The first type of low level, medium level and high medium level represents 17,6% of the total housing area. The second, the high level is the type of plots with areas from 500 to 800 m² to be developed by individuals as villas or small buildings. This type represents about 53,5% of total housing area. The third one represents housing projects to the East of the city. These are largeith areas of about 10,5 ha and more to be developed by investments companies as villas and small buildings in compounds. This type represents about 28,9 % of total housing area.

Map of „New Cairo City“

„Cairo House“_Real Estate

Future Assessment The development was governed by financial considerations and the resedential area increased by nearly seven times. The population increased by two times. Large areas of land were given to the investment companies by the government to develop luxury housing projects. This lead to an enormous increase of service and activity areas, while the industrial areas decreased by 90%. The „New Cairo City“ target turned out to be a resedential city and a service and entertainment center for G.C.R. But how can we assess the new aspects of the urban development of New Cairo City? After private investors were invited to develop the new construction site, the urban policy changed. The main economic activities now depend upon real estate development in „luxury housing“, entertainment facilities and services. This modern city is to receive relief once 2 to 2.4 million people on its completion by 2020. Its remarkable rapid development and the sections grow is unimaginable compared to conditions for european short periods. One can question whether this project is thought to the end and if it will work even in its basic concepts. The Eastern part of G.C.R. was transformed into a gigantic urban mass, which is suspect to be manageable, in its financial and infrastructural excesses.

The „New Cairo Dream“ Katameya

The political changes have influenced the development of the Eastern part of G.C.R., characterized by a process of „filtering“ the upper classes out of Cairo. The higher socioeconomic class who can afford the expenses of commuting long distances and is willing to give up the practice of maintaining the inner city dwellings with its inappropriate contextual conditions were encouraged to move and to live in the newly developed suburbs. The future prospect shows how the poor surplus population that can‘t even afford a single ticket for the metro out of the old city is now left behind by a government project which was originally conceived to solve the problems of marginality and squatting. These issues no longer seem to be the prime concern of „New Cairo“.


CAIRO‘S GHOST TOWNS Al-Qahira size: 214 km² inhabitants: 7.947.121 (1. Januar 2008) density: 37.136,1 Ew./km² religion:

over 90% muslim 5 -10% christianity 2% others


„in 40 years up now we need another egypt“


(the city of the dead, sérgio trefaut)

historical city 1 2

informal settlements 3

desert communities

of egypt‘s 1.001.450 km² land is used

1970 - first generation of satellite cities was planned by the government now 9 ghost towns were built in the last 20 years !!! most of it informal settlements -- > water out of the nile 70% of cairo is informal, lacking infrastructure

Valentina Reimer

cairo plan 2050

visions made of dubai

green cities low prices buissines towers glass buildings

manschiyyet nasser_garbagge city

city of the dead_the biggest necropolis in the world

citiy reconstruction during the revolution „i have been in peru and I have seen the future.“

friday prayers tahrir square

the city and the public: new urban interventions since january 2011 (omar nagati, march 5‘2012) informal settlement

manschiyyet nasser_garbagge city

bbc news_“egypt unrest“, 11 February 201


LITERATURE & MOVIES MOVIES the city and the public: new urban interventions since january 2011 (omar nagati, march 5‘2011) the city of the dead (s#ergio trefaut) egypt‘s rubish people garbage city

TEXTS Understanding Cairo: The Logic of a City Out of Control David Sims

divercity downtown cairo divercity-downtown-cairo.html

Casestudy Drafi, Greece | Stavros Chrysovergis



Casestudy Mossfellsbaer, Iceland | Jordan Lane

MOSFELLSBÆR “ALL FINANCIAL INNOVATION involves … the creation of debt secured in greater or lesser adequacy by real assets … and all crises have involved debt that, in one fashion or another, has become dangerously out of scale in relation to the underlying means of payment.” Economist John Kenneth Galbraith 1993

WHY ICELAND? have a dog, and I have a cat... You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks, with a billion dollars in new assets.

The 2008–2011 Icelandic financial crisis was a major economic and political crisis in Iceland that involved the collapse of all three of the country’s major privately owned commercial banks.

Relative to the size of its economy, Iceland’s systemic banking collapse is the largest suffered by any country in economic history.

N o r t h w e st


N o r t h w e st East


Capital region South

Population 1 January 2012: 319,575 Municipalities 1 January 2012: 75 Area of Iceland: 103,000 km2 Vegetation: 23,805 km2 Lakes: 2,757 km2 Glaciers: 11,922 km2 Wasteland: 64,538 km2 Nearest country: Greenland, 287 km Highest mountain: Hvannadalshnjúkur, 2,110 metres Biggest glacier: Vatnajökull, 8,300 km2 Longest river: Þjórsá, 230 km Deepest lake: Jökulsárlón in Breiðamerkursandur, 260 metres Highest waterfall: Glymur in Botnsá, 190 metres Population per square km: 3.1 Coast line: 4,970 km Sea area within fishing limits: 758,000 km2 55 National Land Survey of Iceland.


Iceland was built upon fishing and agriculture.

Before 2000, banks were state owned and ran in a similar fashion to a government agency.

Sometime around 2000, banks began to began to be privatized. This meant those people possessing strong political ties were able to control the banks even if their banking experience was wanting.

From the period between 2001 and 2007, the Icelandic stockmarket rose on average 44% per year. This was a result of the banks borrowing heavily - often from foreign lenders and depositors. The banks then extended this liberal generosity to their customers.

The party five short years the

Iceland. The banks had grown so large that

average family wealth grew by almost half -

the tiny government might not be able to save

propelling Icelandic people to claim the title

them in a sticky situation. Lenders lost faith

of the world’s most affluent people. Believing

and stopped lending, this resulted in traders

that the good times would roll on, the average

betting against Iceland’s economy. The krona

household amassed debts of up to 213% of

fell 43% against the dollar in the first 10

their disposable income.

months of 2008.






Interbank lending froze after the bankruptcy

Icelandic people searched for even more

of Lehman Brothers. Iceland’s three largest

credit. Encouraged by a strong krona, people

banks were in a pickle, so the government

financed new houses and cars by taking out

nationalised them.

large loans from foreign banks - denominated

national debt being downgraded as the stock

in foreign currencies. As long as the krona

market temporarily shut down. The meant

kept on flexing its muscles the repayments

the krona was no longer worth the paper it

would remain simple and easy.

was printed on as no one would buy it as an

2008 was the start of the big squeeze. As

international currency.

global concerns of financial solvency grew, investors noticed something peculiar about

This resulted in the


The 2008–2011 Icelandic financial crisis was a

As Iceland is a small country, it was difficult

major economic and political crisis in Iceland

to find a single development project to

that involved the collapse of all three of the

investigate. Instead this case study focuses on

country’s major privately owned commercial

Mosfellsbær, a town on the edge of Reykjavík.

banks. It seems that in the overlap of urban and rural Relative to the size of its economy, Iceland’s systemic banking collapse is the largest suffered by any country in economic history.

The purpose of this case study is to examine the effects of the economic crisis within the Icelandic climate.

life, geographies of crisis grow strongest.

Mosfellsbær is a town in south-west Iceland, situated some 12 kilometres (7 miles) east of the country’s capital, Reykjavík. It has a total area of 197 km2 (76 sq mi) and its population as of September, 2011 was 8,886.

Mosfellsbær is only a 15-minute drive from midtown Reykjavík.

MOSFELLSBÆR Capital Region, Iceland 197 km2 8 886 residents (2011)


WHY MOSFELLSBÆR? The link between territory, the economy and politics is more bluntly visual on the outskirts of the city where the development of whole neighbourhoods has been put on hold after being planned during the housing boom in the middle of the last decade. In the intersection between rural and urban here there exists a litany of failed projects. Karlsdóttir, A., Bitsch, S., Glory and blighted landscapes in Reykjavík. 2011. Journal of Nordregio

Partly finished buildings in Leirvogstunga, Mosfellsbær on the outskirts of Reykjavík Photo: Anna Karlsdóttir

Iceland in figures 2012 Volume 17 Published by Statistics Iceland

Iceland in figures 2012 Volume 17 Published by Statistics Iceland

The two graphs on the previous pages plot


an almost identical path of economic growth,

Social housing has never been the hallmark

prosperity, bubbles and spectacular crashes.

of Reykjavik. In some condominiums in Reykjavik there are however some social

By connecting the dots between employment

apartments (see picture below). The displaced

and the amount of completed dwellings

population continues to look for temporary

we can see Iceland was a sports car, racing

rental accommodation, but all such options

towards the edge of a cliff with the driver

are extremely expensive.

falling asleep at the wheel.

Though the Icelandic government has, since early 2009, outlined several plans to rescue hard hit property owners, the practice of the

As with the Irish, the Icelandic population has

financial institutions has at times seemed to

always favoured privately owned properties.

counteract what was intended, namely, to

As an example, already in 1979 around

raise a security wall for indebted Icelandic

85% of the housing mass in Reykjavik was

families. At the current time of writing the

privately owned, a figure that rose to around

future for home owners remains somewhat

91% in neighbouring municipalities in the


Capital region, making rental housing a fringe phenomenon (Icelandic property registry,

Mosfellsbær was hit hard. As noted in the

borrowed money during the housing boom

We can ask the question...who were the

article Glory and blighted landscapes in

devaluation meant that the real cost of these

stakeholders? Who were the decision makers?

Reykjavík, Karlsdóttir, and Bitsch observed

loans have skyrocketed.

“One neighbourhood has already laid down

Karlsdóttir, and Bitsch note that for “many of

streets but no more than one house has been

If we compare these observations to the graph

the entrepreneurs who took part in creating

built with only one family residing, in total, five

on the previous page and following pages,

these new urban landscapes of speculation

inhabitants. Another neighbourhood has half

a critical, almost predictably devastating


of its population under 16 and no school, an

pattern emerges.

presented themselves in financing loans to




complete what was started.” It is for this reason

apartment block only inhabited to 1/5 of its The seducing desire to have a place of your

that many houses remain incomplete. Rotting

own can easily control decisions. But it is

death-star like shells suffering from vandalism

However it was not only the population that

behind these patterns of dreams and disaster

and the unforgiving Icelandic climate.

was suffering as they found “unused building

that many fundamental social problems

materials, a desert of gravel planned for

rest. The dreams became more than just a

Wasted opportunities, wasted values and

something that was never to be.” Illustrating

“place of your own”, they became self fulfilling

materials, wasted landscapes and wasted

what they came to name “dashed dreams”.

geographies of consumption.


Material possessions represent a trap rather

Iceland stepped onto a treadmill of vigilance,

than liberty because for many Icelanders who

with no easy way to jump off.


As can be expected. When the bubble burst, the tools were packed up and large parts of Iceland were left with half finished or barely started building projects.

The previous graph from Statistics Iceland was published in Iceland in Figures 2012. As you can see there is an extreme drop off in completed dwellings as a result of the economic crisis and its bubbles and pops.

Partly finished house in MosfellsbĂŚr.


Ari Skúlason . 12. febrúar 2009. Kannanir Landsbankans á umfangi íbúðabygginga. FIMMTUDAGUR

Ari Skúlason . 12. febrúar 2009. Kannanir Landsbankans á umfangi íbúðabygginga. FIMMTUDAGUR

VISIBILITY The graphs on the previous pages were

and lots for another 4,403 reserved and/or

vacant or partially built. In nearby Garðabær

published in Fréttablaðið on 12 February 2009

prepared (some of them with excavation for

and Hafnarfjörður, the numbers jump to over

by Ari Skúlason, an economist at Landsbanki.

the foundation completed).


The graphs reveal the results of a survey in the

Looking at the area as a whole, the number

Taking out the most empty and unbuilt

summer of 2008 covering the construction and

of vacant finished apartments is not so bad.

construction is Mosfellsbær with an incredible

occupancy of apartment buildings and multi-

However, when you include the number of

37.9% of the town as empty or unbuilt

family dwellings. Unfortunately they study did

partially completed apartments, the number


not include single person households.

jumps to 8.4% of the total.

In the Reykjavík area (including communities

The numbers get even more worrying at the



community level. The City of Reykjavík skews

Akranes), there are 1,173 vacant, finished

the numbers as it has a proportionally low

new apartments. Add to that 509 that are

number of unfinished apartments. However,

roofed and closed in (but not finished on the

if you look at But if you look at Kópavogur,

inside). And another 1,250 under construction

more than 10% of total capacity is new/




Iceland’s crisis-management policies are

offshore investors unable to get their money

creating the island’s next property bubble less

out of the country, according to Arion Bank

than four years after its banking meltdown

hf economist Thorbjorn Sveinsson. As the

threw the economy into its worst recession.

government signals restrictions will remain

Prices for new homes touched a record last

until at least 2015, funds are flowing into one

quarter, having surged 40.1 percent since

of the few longer-term investment options:

the final three months of 2010, according to

real estate.

estimates by the National Registry of Iceland

“If the development continues without

in Reykjavik. Average house prices have risen

interference, this will lead to a property

11.3 percent since the market bottomed at the

bubble within the next two years,” Asgeir

end of 2009, according to central bank data at

Jonsson, an economist at Reykjavik-based

the end of the first quarter.

asset manager Gamma, said in an interview. “There’s a greater risk of an asset bubble

Currency controls imposed in 2008 and

being created in an economy that is closed off

designed to protect the island of 320,000 from

behind capital controls.”

a mass capital exodus are now channeling funds into a market that is showing symptoms of overheating and driving home-loan debt higher. Close to $8 billion in kronur are held by

Valdimarsson, O., 2012. Iceland property bubble grows with currency controls: mortgages. Bloomberg Online. iceland-property-bubble-grows-with-currency-controlsmortgages.html

RESOURCES Althingi, the Icelandic Parliament. 2010. Report of the Special Investigation Commission. April 12th. 2010.

Dicken, P. 2011. Global Shift: mapping the changing contours of the world economy. 6th Edition. London: Sage Icelandic Property registry/fasteignamat Ríkisins. 2006. Ársskýrsla 2005.

Valdimarsson, O., 2012. Iceland property bubble grows with currency controls: mortgages. Bloomberg Online.

Karlsdóttir, A., Bitsch, S., Glory and blighted landscapes in Reykjavík. 2011. Journal of Nordregio

Ari Skúlason . 12. febrúar 2009. Kannanir Landsbankans á umfangi íbúðabygginga. FIMMTUDAGUR

Casestudy Adamstown, Ireland | Clive Hennessey

Adamstown, Dublin, Ireland Clive Hennessey

Ireland’s Context During the 1990s Ireland experienced the Celtic Tiger. The Celtic Tiger was a resultant factor from Ireland’s; • Low corporation taxes • Access to the EU • English speaking population • Good education system

As employment and income increased, house prices were driven up. Construction rose and this increased employment, leading to further construction.

Ireland’s Economic Growth, 1970-2004

Bank Lending in Ireland

Bank Lending in Ireland

Construction in Ireland Rise in construction employment from 165,000 in 2000 to 280,000 in 2008 10% of employment in Ireland to 13%

Irish House Prices

House Prices; Dublin vs. Ireland

Adamstown • House prices were continually rising during the Celtic Tiger • Population increasing • Ireland’s first planned town since 1982. • 500 acre site located 16km west of Dublin City Centre • Developed as a commuter town to Dublin City • Located on a local train line and near motorway


Adamstown 2005

Adamstown 2006

Adamstown 2012

Adamstown The aim of the project was to achieve a self-contained and sustainable community. i.e. a mix of residential and infrastructure such as shops, cinema, train station, swimming pool, library, health centres, restaurants, schools, mixed places of worship and parks, among other facilities. Planned to eventually accommodate 30,000 residents in over 13 phases of construction in approximately 10 - 15 years.

Phases of Construction Adamstown is Ireland’s first Strategic Development Zone which means that the construction of homes runs in tandem with such facilities. There were 13 phases of development, each with certain restrictions. This was to ensure that certain infrastructure was in place for the residents and controls the development of the area. The phasing and implementation policy was sequential rather than periods of time. For example, no more than 1000 residential units were allowed to be built until the construction of the railway station was complete.

Phases of Construction Phase 1

= 600 – 1000 dwellings

Phase 2

= 1001 – 1800 dwellings

Phase 3

= 1801 – 2600 dwellings

Phase 4

= 2601 – 3400 dwellings

Phase 5

= 3401 – 4200 dwellings

Phase 6

= 4201 – 5000 dwellings

Phase 7

= 5001 – 5800 dwellings

By the time phase 7 is completed, all areas of Adamstown were planned to have been open for development

Adamstown Financing Adamstown was financed by private-sector investment in infrastructure. Chartridge Developments consist of Castlethorn Construction, Maplewood Homes and Tierra Construction. The entire site of Adamstown comprises of 500 acres. Castlethorn Construction = 300 acres Maplewood Homes

= 150 acres

Tierra Construction

= 50 acres

Phase 1 = â‚Ź1.2 billion

Sustainable Community; Adamstown Before it had started construction, Adamstown won a “Sustainable Communities” award from the UK’s Royal Town Planning Institute. The award recognises that Adamstown has been properly planned and balances living accommodation with infrastructure, such as shops, cinema, train station, swimming pool, library, health centres, restaurants, schools, mixed places of worship and parks, among other facilities.

Ireland’s Decline The Global Financial Crisis in 2008. Ireland was greatly affected as a lot of the international companies that had set up in Ireland introduced cuts to their employees. This resulted in large scale unemployment, migration and a lack of interest in overpriced housing. Prices in property declined Housing 63% Commercial 40%

What went wrong? 10% of the entire project is built Like most who bought at that time during the Celtic Tiger, the owners of these homes in Adamstown are in negative equity and will remain so for possible many years can’t move. 2006 One-bedroom apartments of 50-54m2 started at €280,000 Four-bedroom houses of 143m2, started at €520,000 Today One-bedroom apartments = €145,000 Four-bedroom houses = €215,000 Properties are among the cheapest in the city.

Adamstown Today Total Residential Units Permitted

= 3247

Units Started

= 1400

Units Substantially Completed (not yet ready for occupation)

= 68

Units Occupied = 1249 89% occupancy rate

Commercial / Retail Development Floorspace permitted = 55700.6 m2 Floorspace completed / occupied

= 1289 m2

Case study: An investigation of the traces of the Global Economic Crash of 2008

Adamstown, Ireland

Clive Hennessey 8th May 2013

Speculations, Bubbles and Collapses

Introduction Adamstown was Ireland’s first planned town since 1982. It was developed to meet the demand on the housing market in Dublin during the period of economic growth. It began construction in 2005, with the aim to supply housing for 30,000 inhabitants and to create a sustainable community with a diverse range of facilities, such as shops, restaurants, libraries, schools, businesses and health centres. It aimed to tackle infrastructure issues by locating itself beside a primary train network line and hence, reducing the demand on vehicular traffic to Dublin City Centre. However, once Ireland hit recession in 2008, the development of Adamstown ceased. With only 1,249 occupied units and no signs of commercial amenities, Adamstown is left with a small housing community with fragments of building sites around the area. What would have been a town that fulfilled modern planning requirements is now nearing a status of being another one of Ireland’s infamous ghost towns.

Context During the 1990s Ireland experienced a sudden economic growth, known as the Celtic Tiger. In this time Ireland experienced rapid increase in employment driven by competitive labour costs. The Celtic Tiger was a resultant factor from Ireland’s; low corporation taxes, access to the EU, English speaking population, and a good education system. As employment and income increased, house prices were driven up. This resulted in a demand for housing and thus, creating a rapidly increasing property bubble. To coincide with the demand for housing, the supply had to be met and hence, construction rose and employment increased, leading to further construction. Employment in the construction industry increased from 165,000 in 2000 to 280,000 in 2008; this is the equivalent to 10% of total employment in Ireland to 13% (Kelly, 2009). By 2006, construction accounted for 20% of Ireland’s GNP. House prices increased significantly and investors were forced to take out loans. With the aid of the media coverage, the property market was deemed to be a safe and reliable investment. Banks were giving out high risk loans to borrowers with low credit ratings. For example, banks were offering 100% mortgages to first time buyers, resulting in dangerous exposures to building and commercial property loans. House prices in Ireland’s capital, Dublin, were higher than in any other part of the country. This resulted in developers building commuter towns around the city, resulting in urban sprawl. When the global financial crisis hit in 2007, Ireland was greatly affected as a lot of the international companies that had set up in Ireland introduced cuts to their employees. This resulted in large scale unemployment, migration and a lack of interest in overpriced housing.

Adamstown Adamstown is approximately a 500 acre site located 16km west of Dublin City Centre.


proximity to Dublin City Centre appealed to investors to develop the site as a commuter town that was greatly needed at the time to meet Dublin’s significantly increasing population and to combat high housing prices in the city. Learning from previous failed attempts of the formation of new towns, the developers’ aim of the project was to achieve a self-contained and sustainable community and to provide physical and social infrastructure and services. It was planned to eventually accommodate 30,000 residents in over 13 phases of construction. Adamstown is located on a major train line and with improvements to local infrastructure and public transport facilities it was envisioned to be a sustainable commuter town. The future focus of the project moves away from Ireland’s typical suburban housing estate format which relies heavily on private transport to alternatives that promote the use of rail, bus, walking and cycling links.

Adamstown 2006

Adamstown 2012

Brief Adamstown was to be designed as a self-contained sustainable community. This meant that it would not just act as a residential complex on the outskirts of the city but would have a mix of residential and infrastructure such as shops, cinema, train station, swimming pool, library, health centres, restaurants, schools, mixed places of worship and parks, among other facilities.

To facilitate flexibility overtime, a system of flexible minimum – maximum ranges of development was adopted for all categories of development. A minimum of 8,250 dwellings and a maximum of 10,150 were permitted in the planning scheme. A maximum of 125,500 m2 of non residential development was permitted. The balance was distributed throughout the different development neighbourhoods in the master plan. The plan also included around 30ha of public open space.

The Adamstown planning scheme sought the development of 8,000-10,000 houses and a population of 25,000 – 30,000 people - the development was planned to be in 13 phases of 800 houses.

Adamstown was Ireland’s first Strategic Development Zone, which meant that the construction of homes run in tandem with other facilities. There were 13 phases of development, each with certain restrictions. This was to ensure that certain infrastructure was in place for the residents and controls the development of the area. The phasing and implementation policy was sequential rather than periods of time. For example, no more than 1000 residential units were allowed to be built until the construction of the railway station was complete. Furthermore, each development phase is only given planning permission until the supported infrastructure is in place. Adamstown was given

the status of Strategic Development Zone (SDZ) which meant that the planning process was given a fast track and avoided delays.

Phases of Development

Phase 1


600 – 1000 dwellings

Phase 2


1001 – 1800 dwellings

Phase 3


1801 – 2600 dwellings

Phase 4


2601 – 3400 dwellings

Phase 5


3401 – 4200 dwellings

Phase 6


4201 – 5000 dwellings

Phase 7


5001 – 5800 dwellings

By the time phase 7 is completed, all areas of Adamstown were planned to have been open for development. At this stage, all necessary infrastructure will be completed and between 5000 -5800 dwellings would be constructed.

Financing Adamstown was financed by private-sector investment in infrastructure. A private joint-venture company, Chartridge Developments, was been established among the primary landowners and developers to introduce this infrastructure. Chartridge Developments consist of Castlethorn Construction, Maplewood Homes and Tierra Construction. Castlethorn Construction, headed by developer Joe O’Reilly, is best known as the developer of Dublin’s enormous Dundrum Town Centre, formerly the largest shopping centre in Europe. The entire site of Adamstown comprises of 500 acres. Castlethorn Construction had approximately 300 acres, Maplewood Homes had 150 acres and Tierra Construction had 50 acres.

Adamstown Proposed Masterplan

Adamstown 2013

Decline in Economy When the Global Financial Crisis began in 2007, Ireland suffered cutbacks to its employment sector. Many international companies that had set up in Ireland introduced cuts to their employees. This resulted in large scale unemployment, migration and a lack of interest in overpriced housing. Prices of property declined in the real estate value; housing decreased approximately 63% while Commercial property declined by 40%.

Adamstown Today Construction of Adamstown has currently ceased. Although it is only in phase 2 of construction it was hoped that it would take 10-15 years to be fully completed. Within the seven years since the project went onto site, only 1,400 residential units have commenced, there are 1,249 occupied residential units in Adamstown – meaning an 89% occupancy rate.

Total Residential Units Permitted



Units Started



Units Substantially Completed





(not yet ready for occupation) Units Occupied

Commercial / Retail Development Floor space permitted


55700.6 m2

Floor space completed / occupied


1289 m2

When apartments in Adamstown went on the market before completion in spring 2006, they were sold out within two months.

Like most who bought at that time during the Celtic Tiger, the owners

of these homes in Adamstown are now in negative equity and will remain so for possibly many years. They are forced to stay in Adamstown until they are able to repay their mortgage which is now higher than the current value of their property. Adamstown properties are now among the cheapest in the city.

2006 Two-bedroom apartments of 79-87m2 started at €320,000 Four-bedroom houses of 143m2, started at €520,000

Today Two-bedroom apartments = €130,000 Four-bedroom houses = €215,000


Condon, D. (23rd September 2006) Dublin’s Speedy Delivery. Estates Gazette; Issue 638, p170-174 Construction Magazine (April 2009) Development in Adamstown Continues in 2009 Irish Construction Industry Magazine (July/August 2007) Cover Story; Adamstown Irish Building Magazine (December 2007/ January 2008) Adamstown Strategic Development Irish Independent (13th May 2003) Waiting for the Adamstown train that might never come Irish Independent (12th February 2005) It's paradise with a train service... Irish Independent (5th September 2009) Feeling lonely in our designer dream town Kelly, M. (2009) The Irish Property Bubble: Causes and Consequences. Kolb, J. (2008) How to Make a New Town. Architects' Journal; 2/14/2008, Vol. 227 Issue 4, p24-29

Casestudy St James Wood, Ireland | Louis Bergis


KTH-A professor. Claes Sรถrstedt

CASE STUDY: St James Wood estate in Stradbally, Ireland

Name: St James Wood Location: Stradbally, County Waterford, Ireland Size (sqm/km2): 12 300 sqm Built space (sqm): 2 500 sqm Planned population / capacity: 15 families Developer : Pat McCoy Build in 2006 Original price per house: 820 000 euros Actual value per house: 200 000 euros


The estate consists of 15 gorgeous thatched cottages. The cottages were launched by Pat Mc Coy as holiday housing in 2006, at a time when the Irish real estate pop up. There are now lying empty and there price has been divided by four. It is now known has one of the Irish prettiest ghost estate.


The site is located in the south of Irland, in county Waterford. The area - a tranquil countryside - is known as the sunniest part of the country. Stradbally is a village of the southern, on the cost, between Waterford and Dungarvan. The medieval village is known for its beaches, which are within walking distance of the Village. For the last 3-years Stradbally has been a silver medal winner in the ‘Village Section’ of the Tidy Towns Competition. Whilst best known for it's beauty and tranquil landscapes, Stradbally also has access to many modern facilities. Waterford City is located at 30 min. drive.


The real estate consists of fifteen gorgeous thatched cottages. Each of it got a private garden (roughly 600 square meters). The houses, design as holiday cottages are roughly 180 square meters. The large four-bed detached houses were completed with all the requisite countrycottage touches – a half-door at the rear of the house, lots of timber finishing – as well as all mod cons. Locals say that when the development was launched, it looked wonderful. Several have ocean views, others are in exclusive suburbs, most push boundaries in terms of design The homes include a fully fitted integrated kitchen with appliances. The spacious living room is accessed from the hall and dining area through double glass and timber doors. The ground floor area contains two bedrooms with a large reception hall and cloakroom. The red deal stairs lead onto a first floor gallery with bedrooms and bathroom accessed from this area. The main bathroom is fully equipped and tiled and has a corner bath. The master bedroom with walk-in wardrobe is pure luxury, as is the second bedroom. Both come with fully equipped and tiled en suites. The overall interiors of the homes reflect an historic feel - large cedar beams in some of the kitchens, a half door leading out to the patio and an Aga Cooker which comes as standard.

The cottages were initially finished to the highest standard with an Irish wild flower specialist brought in to landscape the garden.

Two types of cottages were design; here the plan of those two types. - 6 Houses of type 1, 9 of type 2. -

Massing plan of the cottages.


The Developer is Pat McCoy. He has worked in the industry for 20 years and he is known on similar projects such as Dalkey and Killiney. He has project-managed the site himself the whole operation. The developer built all 15 cottages in one go.

In 2006, after the construction, the asking price of each house started at 820 000 euros. Since the property bubble has poped up in the Irish real estate. Ghost estates have become a new feature of the Irish landscape, with hundreds of newly built properties lying empty after the crash. It was the case of the St James Estate. The price has now decrease to 200 000 euros; more than a quarter of the original one.The developer of the estate says he 'missed the market' at its peak by a matter of months. McCoy says there was a positive reaction when the cottages were launched on the market in 2006 - when 93,000 new homes were built as the property bubble reached its peak. He received a few offers but still not approaching 800,000 euros before demand 'just petered out'. Now he says that he is relaunching the development, bringing in a contractor to tidy up the estate and offering the homes at 'substantially reduced' prices.

All of them where lying empty in june 2011 according to Daily mail reporter. Actually, those houses are still on the real estate market.

Vandals have attacked fencing in the gardens of the cottages. They have also broken handrails and fences in the back gardens

Residential Property Price Index in Ireland (January 2005=100)


Quaint cottages in ghost estate with a good spirit, The Irish Times, June 16

Ireland’s prettiest ghost estate: Quaint £700,000 thatched cottages sit empty because no one can afford them, DAILY MAIL REPORTER, 17 june 2011

Harty & Co – selling agent- ’s website:

Youtube video of the cottage:

Casestudy ZĹ‚ota 44, Poland | Grzegorz Owczarczyk



ZĹ‚ota 44 Luxury Highrise Residential Building in Warsaw`



DATA Country Poland In Warsaw Address Downtown Type of residential building Architect Daniel Libeskind The investor Orco Property Group Total height 192 m Height to roof 192 m floors 54 The area 72500 sq ft The start of construction in December 2007 The completion of the spring 2013

DESCRIPTION Zlota 44- it is a residential skyscrapper located in Warsaw on the street ul. Zlota 44 in a midtown. The construction had begun in 2008 and the completion is planned for this spring (2013). On the 10th of may 2006 authorites of warsa gave a postivie decison for „conditions of buildment” for invest Złota 44. On the 13 of april 2007 the demolishing of existing building „City Center” had begun in order to clearfy the stie finished in November the same year. On the 5th of december investor gain postive decision for being allowed for start the construction. Actually construction of the skyscrapper begun in 2008. After finished 17 floors due to finacial problems of the investor the construction had been stoped. Revivial of the construction begun in january 2012. The building is meant to be luxury aparmment hous about 192 high 54 floors and 266 apartments. The project was desinged by Daniel Libeskind. The building contains 24meters swiming pool , sauna , SPA center ,solar tarace , fitness klub and night club allowing inhabitants for making the parties. The prize for squer meter is form 40 000 SEK till about 80 000 SEK depending on the apartment.


About investor ORCO property group [from website of the company ->”about us”] : „ Orco Property Group is an investor, developer and asset manager in the Central European real estate and hospitality market. Operating in Central Europe since 1991, OPG currently manages circa EUR 1.7 Billion worth of assets. Orco Property Group, based in Luxembourg, is a public company listed on the Paris Stock Exchange Euronext and on the Prague and Warsaw Stock Exchanges. Orco Property Group operates in a number of countries in Central and Eastern Europe with main focus on Germany, the Czech Republic, Hungary, Poland, Croatia and Slovakia. Orco Property Group portfolio integrates several well-known companies including MaMaison Hotels & Residences across Europe or Gewerbesiedlungs-Gesellschaft mbH (GSG) in Berlin. The company focus is on prime locations within capital cities in the Central European region and possesses a unique portfolio of prestigious real-estate assets. In every city where it operates, the Group is dedicated to offer high standard facilities, together with a comprehensive set of prime services. As a developer, Orco Property Group pipeline is supported by a unique land bank well positioned in close vicinity of Central Europe capital cities. It grants to the company the opportunity to adopt a cherry picking strategy and to develop a set of key and ambitious projects with strong potential upside. Zlota 44, a luxurious residential high-rise in Warsaw, Váci 1, a shopping emporium in Budapest and the ambitious development of the 24ha land plot of Bubny in Prague 7 are the vivid examples of the Group strategy.”

DESCRIPTION KEY FACTS 1.ORCO PROPERTY GROUP - French real estate development company 2. Based in Luxemborug - tax reasons. 3. Founded 1991 4. Revenue Increase 299.2 million EUR (2007) Net income Decrease 87.5 million EUR (2007) Total assets Increase 2,943 million EUR (2007) 5. Develops market in mainly in Central and Eastern Europe: Coratia , Czech Republic, Germany ,Hungary , Poland , Russia and Slovakia.

BUBBLE CRASH OF 2007/08 In 2007 according to ORCO reports company owned portfolio worth 2,95 million Euro. In the first half of 2008 company reported 2,7 billion ownership portfolio. Beginning form June 2009 ORCO real estate portfolio deceased to 1.83 billion EURO. In previous period company reported value of 2.13 billion Euro.. Czech News Agency:”Orco struggles a high degree of indebtedness ... Orco’s debts total as much as some EUR 1.6 bn ... under a six-month court protection against creditors, with management expecting a possible extension by several weeks ... at the same time in talks about capital investment with US firm Colony Capital and is undergoing restructuring. Orco said ... to focus its future activities on Prague and Berlin.” In 2009 after last wave of the financial crisis Czech business Weakly stated: „“still on the verge of bankruptcy and, despite being under protection of a Paris court, might not survive the year without a capital increase from a new investor” (...) “talks on a capital increase with U. S.-Based investment fund Colony Capital”.

DESCRIPTION CONCLUSION -financial problems of the company and ZLOTA 44 construction suspension The connection between international financial problems of the company and ZLOTA 44 real estate is well established. It has to be noted also that suspension of the construction was caused by also law and regulations problems. The law in Poland is strictly regulating access to the light for neighbourhood. In invest prohibited light access to the surrounding buildings so the owner claimed this issue to the court. In a long process finally court allowed the company to finalize the invest. The all legislation process is complicated and because of the conflict of interest (company and neighbours) is difficult to objectively be described. It is interesting to note that finical crisis also affected Luxury investments. This highly contrast the typical investments of the America cheap houses. But the situation here is different since the company had problem before completion and selling the dwellings. Problems was also problems of the real estate company and not of the owners. This study clearly show how international markets are connected. It also show that they are bidirectionally connected. Not only top-bottom but also bottom-top.

Casestudy Alguaire Airport, Spain | Adrian Elizalde

Alguiare Airport

when we thought we were rich

When we thought we were rich. During the housing bubble market a humble country like Spain, famous for its history and the agricultural, had a lot of credit to spend. The local governemnts tempted by the repercussions and popularity of the Guggenheim in Bilbao decided to build excessive and out of scale buildings. People were happy because this infrastructures gave employement and they saw how its city stood out in the architectural and cultural panorama. Moreover, the Spanish government also wasted money preparing the country as one of the better equipped in the world. Spain is the 3rd country of the world with more highways, 2nd country with more km of high speed trains and 1st country in Europe with more airports. We used to think that public were good no matter what, but the reality is that they created disproportionate utilities of high construction and maintenance cost which weren’t profitable in the future. They didn’t cover necessities of the people. The Spanish airports are a clear example of this waste of money. They spent a lot of public money building many airports that were not necessaries near small cities which nowadays they barely carry passangers. But they also expanded airports which needed them like Barcelona and Madrid at an excessive cost (7,000 million euros Madrid and 3,500 million euros Barcelona). There are 50 airports in Spain which only 7 or 8 have benefits. Due to this, Aena (the airport company of Spain) is the airport enterprise that has more deficit in the world.


The case study we are going to deal is the airport of Alguaire in Lleida. Is a little Spanish city situated in the region of Catalonia. Has a population of 139.834 in its urban region and covers 363.900 habitants in the metropolitan area. Leida is an old and rural city, famous for its mountains for skiing and adventure sports. At first the airport was going to be located in an old aerodrome which was going to be reformed and expanded but because of the criticism of different ecological groups finally it was situated in Alguaire. It is 15 km form the city and the surroundings are desertic which increased the cost of the connections. You can access through a trunk road and in the future it will be available a new highway which is under construction. Also is expected a train access which will be linked to the Catalan train network. Its size is of 5000 sqm located in an area of 367 acres. The landing strip of 2.500 meters and the area of plane parking have the capacity to receive big aeroplanes like Airbus.


The government allocated the plan to a group of comanies: Dragados, Obrum and Urbanismo y Construcciones.The project had an initial budget of 42.5 million euros to be build and 5 million euros of annual cost maintenance. It was predicted to share public and private investments being the only airport built by the Catalan government. The architect who won the competition was Fermín Vazquez and its office b720. An architecture firm important in Spain who had been working with Jean Nouvel and David Chipperfield. Finally it was inaugurated the 17 of January of 2010 and it’s cost has been of 100 million euros.

When the airport started operating, although the government had to subsidise the infrastructure with 20 euros each passenger, it was considered a success of people. The time of maximum peak the airport had 4 round trip flights on Friday and Sunday and they decided to expand the airport with a cost of 1.5 million euros. The expansion had two targets: allow to operate two flights simultaneously thinking in large loads of passengers and using the airport as a base for exportations. When the crisis exploded the economic support for the Alguaire airport is removed loosing almost all the destinations except for the Balearic Islands during the summer season. It only remained one flight also with subsidies. The estimation to be profitable is to have about 600.000 passengers, in 2010 there were 61.769. The low cost companies that used Alguaire airport and knew about their inefficiency blackmailed the government demanding 60 euros for every passenger instead of the initial 20 euros agreed. In 2011 there were only 33.041 passengers.


When you reach the building you can hardly see any car and the bus with its driver waits for the 3 people on average he has every day. When you enter the building the shops are closed, conveyor belts stopped and little people. In March of 2011 a Ryanair flight coming from Milan could not land because the air controllers were not in their workplace. The aeroplane arrived 30 minutes before the schedule and had to overfly the airport until someone could assist the landing.

The Catalan government launched a competition to own the management of the airport. There were any companies who presented a proposal. They created the “Taula Estrategica d’impuls” which is a group consisted in politic and economic institutions of Lleida to try and revive the airport. They design a plan for the infrastructure and commerce to boost the activity and adequate Alguaire to fligh outside the Schengen area (is a group of 26 European countries which have abolished passport and immigration controls at their common borders). During winter season there were new flights to British cities and the ones to Russia failed due to the delay of the licences of the Spanish government. Nowadays, the flights outside the Schengen area will continue and they are trying to start the Russian destinations. Through the reforms and expansion of the airport they are promoting the food commercialisation. In addition it is expected that in 2013 the airport will be used by Air Hoster to park, maintain and recycle their airplanes. In conclusion, the airport was built to attend the resdients of Lleida, tourists which liked skiing and sports adventures, business trips to exhibitions and congresses… reaching about 400.000 annual passengers. However it is only 1 h 45 minutes away from Barcelona by car and it didn’t even get near to the expectations. Moreover, every big city of Catalonia (Barcelona, Girona and Tarragona) have an airport. The losses of the Alguaire airport


Casestudy Sanchinarro, Spain | Jorge Pajares

SANCHINARRO Case Study of a Bubble Development in Madrid, Spain by Jorge Pajares Location: Madrid, Spain Area: 401,7 Ha Built Area: 1.648.000 m2 Green Areas: 1.221.066 m2 Total Housing: 13.568 Social housing: 7.946 Estimated Population: almost 40.000 Current Population: around 20.000

DESCRIPTION Sanchinarro is a neighborhood situated in north-east perimeter of Madrid, Spain. It is one of the called “urban action plans”, areas surrounding Madrid that were planned to be built in the late 90s. Construction works began in 2002 and buildings construction is still going on slowly. Anyway most of the housing planned is already built and around 20.000 people are currently living here. Unfortunately, Sanchinarro was only the first one of a series of disastrous new neighborhoods developed in the limits of the city of Madrid during the first decade of the 21st century, during the construction boom that became the engine of the Spanish economy. The result is a new kind of “dormitory town” defined by over measured streets, lack of commercial, working and public activity; and too many houses. Watching the pictures someone may ask, who did this? But the truth is that, as this report will try to show, Sanchinarro is the consequence of a chain of errors made along the time, from planning to construction works.

THE ORIGINAL PLAN The idea of creating Sanchinarro came out because of the housing problem that was going on in Madrid, difficulties finding housing and high prices were, as always, the main problems. The answer was easy, the city had to grow. The development of the northern area of the city was a priority so the city administration asked the architect and urban planner Miguel Oliver to do the planning. The proposed idea was to enhance the opportunities of the stream Arroyo de Valdebebas, one of the few natural water courses still left in the city, to create a huge green area along its valley that could work as a green lung for the northern part of the city. Also, against the open block typology of the 70s and 80s that resulted in undefined public spaces, a closed block typology was proposed following the model of the successful city expansion plan made in the 19th century. But considering the heights and size of the blocks to get sunny and open courtyards inside. The streets 1

also, were designed wider to get lighter spaces inside the houses. Specially two main avenues that would work as a belt, connecting the northeast and northwest existing areas of the city with each other and the new main green area.

THE REALITY Problems started when the plan was delivered to the city administration in 1996, the region administration decided to create a new highway access to the city in the northeast. Engineering companies decided that the valley of the stream Arroyo de Valdebebas, which was only planned on its way through Sanchinarro, was the best option to avoid problems with noise in residential areas and during construction works. Then the main idea that sustained the design of the area was gone. Also, in 1997 a new Land Law was approved, basically it allowed local administrations to increase the building intensity in new developments. This way, the heights of the blocks were increased one or two floors by the urban planning administration, so the sunny measured courtyards were not that sunny anymore. Additionally, non-residential built area (which is intended for commerce, offices, facilities, etc) was reduced to increase housing built area due to pressure of the construction companies (housing is a better business). Actually, the objective of the Land Law was to make housing more accessible to people who couldn’t afford it, so increasing the building intensity there would be more offer and prices would go down then. Unfortunately, at the same time, banks started to give credits easily to almost everyone, so prices went up instead. When the urbanization process began (consists in performing infrastructure, networks and public space works), construction was already a race whose goal was to get the maximum profit, a race that public administration did not dare to control as they should have done, it was the new engine of the economy. This way, the urbanization works that need to be done by the construction companies before they can start buildings construction, were done quickly and without considering the qualities of the natural resources. Public administration, which is responsible for receiving these works when they are finished, did not check properly if they fulfilled the appropriate requirements. The spanish construction system is base on the distribution of duties and profits between those who are involved in the process, generally: Profits Administration Construction companies Owners

Public spaces and 10% of built area for public facilities Housing, offices, etc for selling Money or properties

Duties Take care of the infrastructures and networks once they have been built and control the development Build the public spaces and networks, also social housing that must at least 40% of the built aresidential area Give the land they own to be develop

No one wanted to cause any delays in the process, there was a lot of pressure for everyone who was involved, construction companies that wanted to sell their housing, banks who wanted to give mortgages and their clients to pay them back, buyers who wanted to live as soon as possible in their new homes, etc. By 2004, the first neighbors arrived, and after a few years the problems were clear, the model of city that had been designed was not working. How could it be possible considering that it was inspired in an existing city model in the center of the city (Barrio de Salamanca)? First, the density of population of Barrio de Salamanca (27.5 inhab/km2) is five times the current density of Sanchinarro (5 inhab/km2), even considering the expected population for the future it would still be almost three times higher (10 inhab/km2 ). Then, whether it is true that the size of the blocks is similar in both cases (around 120 x 90m), if we have a closer look to one of the blocks in Barrio de Salamanca, we see how it has plenty of different buildings against the one or two that occupy the whole block in the case of Sanchinarro. This means that in the city center we have plenty of points where people are coming in and out constantly, we have people moving around the whole block, something 2

Dossier KTH Speculations Seminar: Casestudies