Community Of Madrid Will Buy Homes From Banks For Social Housing Stock

22 November 2016 – El Mundo

Next year, the regional government of Madrid, led by Cristina Cifuentes, will spend €10 million buying homes in the free market to incorporate them into the stock owned by the Social Housing Agency – the new Ivima. “We hope to buy properties from Sareb and other financial institutions with significant “stock””, said the Community of Madrid’s Minister for Transport, Infrastructure and Housing, Pedro Rollán (pictured above, right).

According to his calculations, it currently takes around six months for the autonomous Administration to hand over the keys to a social housing property to a claimant (…). The collapse of the real estate market means that the cost of constructing a new social housing property through the Public Administration and the cost of development by a private property developer is almost the same.

“We want to acquire around 60 or 70 homes, depending on the final price. The idea is to take advantage of the exceptional circumstances that we are facing at the moment, to facilitate access to housing for people who need it, as quickly as possible”, he said. (…).

Agreements with Bankia and La Caixa

Despite the sale of almost 3,000 homes to an overseas investment fund, the Social Housing Agency owns a significant real estate stock, comprising 23,690 properties of which, approximately 300 are free market properties “which are being repaired or which belong to the Emergency Social Housing Plan. In other words, they are reserved for use by citizens in the event of a catastrophe or emergency”, said a spokesperson for the regional government.

The regional government has been in conversations with Bankia and La Caixa since the beginning of its term in office to try to reach an agreement about the use of this housing stock, which cannot be put on the market.

“This is the first time that the Community of Madrid is going to undertake an operation of this kind”, said a regional spokesperson. Previous regional governments put in place measures to facilitate citizens’ access to housing, but none of them went this far.

Nevertheless, the Socialist spokesman for Housing, Daniel Viondi, does not share the Minister’s enthusiasm. (…). The parliament member says that the Minister has not specified “how many homes there are going to be, where they will be located or how much they will cost, and furthermore, there won’t be any regional budgets available until at least March”. (…).

“Cifuentes is turning the Community of Madrid into an estate agent. It costs more to buy such properties than build them from scratch and she is missing out on the opportunity to create thousands of jobs and to give the construction sector the boost it needs. For every €1 million invested in public housing, economic activity amounting to €6 million is generated”, he said, according to his data. (…).

Original story: El Mundo (by Jaime G. Treceño)

Translation: Carmel Drake