4 September 2015 – El Confidencial
The municipal government admits having legal difficulties to meet its claim to reverse the sale of 1,860 subsidized homes to vulture funds, which is associated with increased evictions.
“Difficult to reverse”. The municipal spokesperson, Rita Maestre has acknowledged the difficulties, the legal team of the City Council is coping with, trying to reverse the sale of 1,860 public housing units to a vulture fund in 2013. This operation was put into question on several occasions by the Mayor Manuela Carmena, considering that “it was not legitimate nor in line with law,” and several members of her government have connected the increase in evictions to the sale of these homes, reversal of which was one of the election promises of Ahora Madrid.
The city government does not conceal that “it will be hard to reverse the sale at this stage,” and even though “they continue assessing legal ways to do it,” the efforts are focused on finding ways to create a public housing stock/complex. Legal experts consulted hereby agree that “proceeding with the reversion of this sale required that previously, in the contract, a snapback clause had been expressly stated”. A legal crossroads which means going to court, holding up the process even more, including beyond the time of her mandate. All constraints that have led the city government to abandon these aspirations.
The lines of work to ensure alternative housing for the persons evicted and at risk of social exclusion include creating a housing park with homes provided by banks temporarily and free of charge. The agreements are practically closed and although negotiations with more banks to join in this housing fund go on, let us outline some of the conditions of the assignment. The offer put on the table by most large institutions after several weeks of negotiations with the Social Rights councilor, Marta Higueras, stipulates that the City Council has the capacity to manage the project during the four-year term.
As the city spokesperson said at the end of the Governing Board, they are also evaluating and studying other possibilities for creating public housing on municipal land. Ensuring housing alternative in the face of property foreclosure is the top priority, although Maestre stressed that the fight against evictions means to avoid reaching this point: “With the creation of the Oficina de Intermediación Hipotecaria (Mortgage Brokerage Office) we intend to process these cases before they are taken to court, and as a mediating agency between banks and the affected it will resolve many problems. “
For the district councilor of Vallecas, Francisco Perez, the connection between evictions and the sale of these public homes to the Blackstone-Real Magic State fund, which currently has these properties deposited in the Socimi Fidere, is clear. “We have the problem that in the urban development of Vallecas about 2,000 homes of the EMV (Empresa Municipal de Vivienda), but also of the IVIMA (Instituto de la Vivienda de Madrid), were sold to investment funds. Therefore, many people have seen substantially altered the economic conditions of their rents, and this has resulted in significant increase of eviction for nonpayment, “says the councilor of Ahora Madrid.
More taxes for offices and shopping centers
The Economy and Finance government, led by Carlos Sanchez Mato, also prepares a rise in IBI (Property tax) corresponding to non-residential uses, which will compensate for the general decline in the residential IBI. It is expected that the differential taxation will increase for property exceeding certain cadastral values, yet to be determined. Among them are shopping centers, offices, commercial and industrial premises, garages, as well as kindergartens, schools, private residences/nursing homes and private hospitals.
For Francisco Perez, the council of Vallecas, the connection between evictions and the selling of these homes to Blackstone-Real Magic State fund, is clear.
The aim of Ahora Madrid, which will shell the initiative in the coming weeks, involves developing “a more progressive tax structure” to the extent of municipal powers, as emphasized Maestre. The government team maxim is accepted because “pay more those who have more”, while the tax burden of IBI is “substantially” lowered for the rest. Since the City Council has no legislative power to impose a kind of progressive taxation, mechanisms to reverse the regression will be offered.
The new tax structure designed by the City Council will focus on the IBI, and for now no other measures to move towards a progressive taxation by income level are contemplated. Nor is it planned “to impose fees that penalize accumulation of property for speculative purposes, in the hands of large companies, real estate and financial institutions” – another measure included in the program of Ahora Madrid.
Original story: El Confidencial
Translation: Lee La