1. Built environment
December 4, 2017updated 16 Jul 2021 11:03am

Seseña and Ordos: Two speculative cities that are still standing empty

London is a city clamouring for space. The very idea of houses left empty, such as the ones dotted around Kensington, makes most people’s blood boil, especially if you’re part of the every growing percentage of the population for whom property ownership is a dream but little else.

More houses seem the only answer – but this medicine to South England’s ills isn’t a global cure all. Often ambitious developers put up houses that remain unintentionally empty, putting pay to the adage ‘Build it and they will come’.

Here are two examples of cities that were clearly unnecessary.

Seseña, Spain

Seseña is empty. It was originally intended as a satellite city for Madrid, a middle class commuter’s utopia away from the bustle and pollution of its large northern neighbour. Launched back in 2003 when the real estate market was booming, it was ambitiously nicknamed the “Manhattan of La Mancha”.

But if a New Yorkers saw Seseña today they would cringe to be even associated with it. Spain’s property bubble burst and, although 13,000 homes were intended for Seseña, the developers stopped at just over 5,000. By 2008 less than 3,000 had been sold; of those, only about a third were occupied.

This meant that 80 per cent of the homes in Seseña were empty. By comparison, at the same time, the town with the highest proportion of empty houses in England was Burnley, Lancashire, where just 7.4 per cent were empty.

In Seseña, the lack of people meant all the intended grocery shops, pharmacies etc. never opened, which didn’t help the appeal to prospective buyers. The whole project was dogged by rumours of corruption and the man responsible for the development, Francisco Hernando, although never charged with wrongdoing, promptly moved to Equatorial Guinea, which didn’t exactly look great. Those who had already bought into the project lost huge amounts of money on their investment.

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Seseña was an unneeded city. Already Spain has a high rate of property ownership, with 78.2 per cent of people already living in homes they owned. This rate is far higher than much of the rest of Europe: ownership levels are lower in the UK (63.5 per cent), France (65.0 per cent), Germany (51.9% per cent) and Italy (72.9 per cent).

So the demand for the Seseña development was low. It had little appeal to possible residents – and after the crash it had little appeal to investors either.

Ordos, China

Kangbashi New Area is part of the northern Chinese city of Ordos, and is also standing empty. Built in just five years, it was a government-led project that hoped to make homes in this coal rich region for over million people. Like Seseña, it has the infrastructure, shops and public spaces of a fully functioning city – but like Seseña barely anyone lives there.

The Ordos Museum. Image: Popolon/Wikipedia.

The homes are being bought but no one is moving in. In China, buying property is seen as a safe investment, because no one has consistently lost money in the short history of the country’s modern property market. Frenzied building is supported financially by the government as such investment boosts GDP. And so, spending is structurally incentivised regardless of whether something of use is made or not.

Citizens of China have only been legally allowed to own property since 2004, when the right to private property was written into the country’s constitution. Fifty years of demand was unleashed on an undeveloped property market, and since then it has boomed. Many Western property experts see this as a bubble and fear a market crash.

If these doom mongers prove correct, Ordos could be fated to go the way of Seseña. Patrick Chovanec, business lecturer at Tsinghua University in Beijing, sees the property boom as being driven by investor opportunities and not a genuine need for housing.

Here is the link between Seseña and Ordos: both cities were built for investment’s sake and not really with inhabitants in mind. The price has been paid in the unpopulated apartments, empty shops and quiet streets.

These are investment cities and it is in those terms their value lies. Their function as homes takes second fiddle to their market-dictated value, and it is through the disconnect between the two that financial disaster awaits.

For Ordos only a property market crash separates it from being such a failure as Seseña. So to all you developers out there, if you’re going to build a city, have a real think about who’s going to live there first.

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