Our teacher told us that, before the housing boom, the area of the Vega Baja was dedicated entirely to agriculture. It was the lure of rich pickings from selling houses that drove owners to sell their land and young people to working on building instead of in farming.
The fact that, once you have sold your land that is it, the income from it has gone did not seem to matter because there was still plenty of land left to sell. Everyone hoped there would be a never ending stream of buyers for the houses they planned to build and for a number of years that was true.
The two things that killed off the dream though were greed of the constructors who thought they could continue pushing their prices up and of course the economic crisis. Both of which mean that, those of us who bought during the boom years, have seen the value of our investments plummet as house prices returned to 2002 levels.
It wasn’t just constructors who became greedy, all the allied industries (carpenters, electricians, painters etc) also wanted a piece of the action and with their new found wealth, they bought expensive cars and big houses. Life was good in the Vega Baja; people who had faced poverty for years were suddenly rich and they took to new money like ducks to water.
However, as fast as the boom developed, it came to a halt. The market for new houses stopped almost overnight leaving the construction industry with large tracts of land which they had bought up in preparation for building more houses. At least they had assets, the allied industries were left with nothing but what were the companies to do with the land they owned? The savings banks had taken a big hit on loans for construction and were no longer in a position to lend money for further developments. Although on paper, the companies still had huge assets in the land they owned, they no longer had the cash to develop it.
In the last couple of years, some of the construction companies that survived the economic crisis have decided that, since there is no point in building, they might as well use their land to grow crops instead. You can see the evidence of this in the areas of land that would have been covered in houses but which are now planted with artichokes, lemons, onions, broccoli, oranges and lettuce. Of course the returns are not as great but using the land in this way is at least profitable and there is the added bonus of creating employment.
The Vega Baja may well return to the situation our teacher told us about, an agricultural area where people do not become millionaires overnight but enjoy a life that they were once happy with.
In years to come, when the economic crisis has resolved itself, there may be a need for more new housing. Hopefully though, the Vega Baja will have learned the lesson and will not rush headstrong into a construction boom again; rather it will stick to what is knows well. Land used for agriculture may not bring the same returns but at least the income from it is year on year; whilst the demand for new houses fluctuates, the need for food remains constant.