Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 188

Spain is a beautiful country and lots of people want to visit and/or buy property there. But here's what Prime Minister Pedro Sánchez recently had to say about this :

Just to give an idea, in 2023 alone non-European Union residents bought around 27,000 houses and flats in Spain. And they didn't do it to live in them, they didn't do it for their families to have a place to live, they did it to speculate, to make money from them, which we – in the context of shortage that we are in – obviously cannot allow.

And by cannot allow, he means that Spain is preparing to implement a 100% tax on property purchases made by buyers of non-EU countries, such as the UK. It's not quite a foreign buyer ban, but it's certainly a punitive tax that should, in theory, dissuade the majority of buyers.

I am, however, unclear as to how this will interact with Spain's golden visa program . For over 10 years, Spain has been encouraging foreigners to buy real estate in the country (minimum value of €500,000) in exchange for permanent residency.

Will this program remain, and will these foreign buyers now be taxed at 100%? Or will permanent residency also exempt you? I don't know.

Whatever the case, it is yet another example of government trying to appear as if they're doing something meaningful about housing affordability. You might also remember that, last year , Barcelona came out with a complete ban of short-term rentals starting in November 2028.

But once again, I think it's important to remember that economics is the study of choice and that there are always tradeoffs . A decision in one place, will create second-order consequences somewhere else.

One of the many arguments that Brian Potter makes in this recent article called " Why Skyscrapers Became Glass Boxes " is that most people don't really care about the exterior of buildings. Hence one of the reasons why the market moved toward ever-greater architectural simplicity.

He quotes the late Chicago-based developer James Loewenberg:

“The person who looks to buy or rent a unit in a high-rise,” says Loewenberg, “only cares about three things: the location of the building, the layout of their unit, and the view from their unit. They don’t care as much about the physical appearance of the building and it is my contention that they never really look above the third floor…”

But I don't think this is exactly true. Also, Loewenberg was the founder of Magellan Development , which is responsible for developing two Studio Gang -designed towers: the Aqua Tower and the Vista Tower (now the St. Regis Chicago). Both of these buildings are designed for people who might look above the third floor.

For more on this topic, here and here are two related posts.

Bloomberg recently interviewed the outgoing head of San Francisco's transportation agency -- Jeffrey Tumlin -- about the impact that self-driving cars have had on the city. Along with maybe Phoenix, San Francisco has the most direct experience. Robotaxis have already been operating in the city for four years.

It's an interesting interview. On the one hand, robotaxis have, according to Tumlin, gotten better than most humans at "seeing" and predicting the behaviours of pedestrians. They offer slow and steady law-abiding rides, which is arguably not how must humans drive. This is a safety improvement.

But on the other hand, robotaxis still represent a fundamentally inefficient use of roadway space. They take up just as much space as human-operated cars, but importantly, they offer a less frustrating driving experience. Meaning they tend to induce demand, much like ride-hailing platforms.

In a 2018 study by San Francisco County, they found that roughly 50% of the increase in vehicle miles traveled in the region was due to Uber and Lyft. So not surprisingly, there are important things that will need to be figured out as robotaxis continue to spread across our cities.

I also find the comparison in the interview between San Francisco and Phoenix to be particularly interesting. The former is walkable. The latter is not. And this seems to be creating a different experience with self-driving cars because robo or not, in Phoenix, traveling by car is pretty much the only option.

For the full interview, click here .

Cover photo by Jack Nagz on Unsplash