The Spanish government recently approved a plan to allocate 50,000 'Sareb' homes to bolster its dwindling social housing stock.
Spanish bad bank Sareb (La Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria) was created eleven years ago to buy real estate assets from banks that went bankrupt during the 2008 financial crisis, and has been state run since 2022.
Of the 50,000 pledge, 35,000 properties have already been identified and another 15,000 will be built on land owned by Sareb. "It is essential to reconstitute the public housing stock and make 100 percent use of Sareb's assets to address the concerns of Spaniards," Minister of Economy, Nadia Calviño, told the Spanish press.
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Calviño also defended the delay in utilising Sareb's stock because the government only took over the company last spring, a decision which was taken after Brussels forced the Spanish government to take on the company's huge debt as public debt.
The pledge, which was announced by Prime Minister Pedro Sánchez at a recent campaign event in Valencia, comes as part of a broader housing reforms and a government commitment to provide 100,000 social housing units for rent and purchase at an affordable price.
An emphasis on boosting Spain's social housing stock is something junior coalition partner Podemos has pushed for since the start of the legislature, and sceptics in the Spanish press have suggested that Sánchez's decision to anounce the plan at a PSOE electoral event in preparation for upcoming regional elections in May is indicative of playing politics rather than anything else.
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Social housing, or Vivienda de Protección Oficial (VPO) as it's called in Spain, is a type of housing benefit for low earners, allowing you to access subsidised apartments or houses to rent or buy.
It is something that Spain is severely lacking in, especially when compared to other European countries.
Trailing the pack
Spain has one of the lowest proportions of social housing stock of any country in Europe. According to figures from Spain's Land and Housing Observatory in 2020 just 2.5 percent of total constructions in Spain were for social housing, far lower than in countries such as Netherlands, with 30 percent, and Austria (24 percent) and Denmark (20.9 percent).
Spain is part of a club of EU countries that have startlingly low social housing provisions. Spain ranks 18th in the EU overall, and is joined at the bottom of the league table by countries such as Romania (1.5 percent), Estonia (1.7 percent), Croatia (1.8 percent) and Portugal (2 percent).
Spain's 2.5 percent figures also pales in comparison to the wider European average of 9.3 percent. In recent years, Spain has not exceeded 10,000 completed social housing units per year, compared to 60,000 a decade ago.
The consequences of no social housing
A lack of social housing presents a number of issues for Spanish society, notably forcing disadvantaged people who would likely qualify for rent-controlled social housing in other countries into an already overly-saturated and inflationary rental market which in turn pushes more people into poverty and dependence on direct government aid.
Rental prices in Spain are now on average 9.4 percent more expensive than last year, according to data from Idealista, Spain's leading property experts
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But why is there so little social housing in Spain?
Experts say there are two main setbacks. Javier Jiménez, Land Director of CBRE Spain, told Spanish outlet La Sexta that "in Spain there is so little protected housing because the developers play with prices that have not been updated for ten years... logically it does not make development sustainable."
That is to say, what construction companies receive from the government to make social housing is not profitable. In many cases, it doesn't even cover construction costs.
"For a three-bedroom apartment, the maximum price that the developer can charge is €198,000; however, the cost of production is €260,000," Roberto Vicente, a director at Ingescasa, told La Sexta.
The other problem is a lack of land. Fernando Cos-Gayón, director of the Housing Observatory Chair at the Universitat Politècnica de València, says that regional authorities must "give up public land because that way it would be feasible to have a large number of [social housing] homes."
Solutions
Though some government ministers have (rather quietly) admitted that the total 100,000 target may take as long as two decades to come to fruition, in the short-term the government plan to offer rent-controls to 14,000 already occupied apartments in order to avoid evictions, and another 21,000 units will be made available to the Spanish regional governments.
Speaking in the Spanish Congress on Wednesday April 19th, Sánchez followed up on his 50,000 pledge made in Valencia and announced the financing of 43,000 homes for social housing paid for with €4 billion of European funds.
"I want to announce that, in addition to the mobilisation of 50,000 Sareb homes, we are going to finance the development of another 43,000 new homes for social rent and rent at affordable prices," the Prime Minister said.
He also criticised Spain's "embarrassing" social housing stock compared to Europe, and reinforced his "commitment" to "move forward so that housing is a right and not a problem for the majority of citizens."
Obstacles already
Yet the plan isn't without problems. Encouraging though the government pledges are, in reality not all the homes will be immediately available. In fact, of the 50,000 total properties put aside for social housing stock as part of the government plans, only 21,000 will be available within a year and another 14,000 are already inhabited, so do not constitute new builds.
The remaining 15,000 will be built on land owned by the Sareb through public-private collaboration agreements and will take about two years to be available, on average, according to sources in the Ministry of Transport, Mobility and Urban Agenda.
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