Much has been written about the ghost towns of China and its now interesting to see that ghost towns in Europe are now popping up in the media such as the recent New York Times article Newly Built Ghost Towns Haunt Banks in Spain. The Chinese ghost town have various reasons for occurring but from what I understand the Spanish and Irish ghost towns were basically due to 2 factors – cheap money and oversupply. The question remains who is to blame? the banks, the market or government. For me its the mostly the governments who allowed planning and growth to get out of control without taking into account the economic and social factors.
Many cities and towns across the world operate autonomously when it comes to urban planning and let the social(more employment) and financial benefits (taxes & rates) get ahead of the long term vision. That being said urban planning also has many other problems due to the slow pace of plan & policy formation along with slow implementation. Urban plans are often very inflexible and take years to change and never keep up with the market. Often many cities don’t have enough residential or commercial or industrial areas at a given time thus sending up prices – in Spain its seems the influx of foreign investors drove up prices even quicker.
So, how do we solve the problem of ghost towns? Now that they are built it will take years to fill them in a continent that has a fast ageing population. Many housing areas will end up totally derelict and be similar to areas of the USA. I think that the best approach is to leave them for now and hope that the market fills them up, but the banks own the houses and are losing money. Maybe, the banks should turn them over to the government for social housing due to the large costs of maintenance and insurance over the next 10 years. The banks may be better writing the houses off as a loss as this one off cost could outweigh the return/profit that the banks could gain in the long term.
How do we stop ghost towns occurring? A proper planning process and implementation that takes a hard look at the overall process and eliminates any problems before they actually occur is the best solution.