Economy And Banks Increase The Number Of Social Housing Flats To 9,000

10 September 2015 – Expansión

SOCIAL PLAN / Luis de Guindos has convinced financial institutions to increase the stock of 6,000 flats for social rent, as it is advisable regarding the situation of many families.

The Economy Minister Luis de Guindos, has used the summer break to hold individual meetings with presidents and CEOs of major national banks to develop a plan on strong increase in social housing fund, initiated in January 2013 with 6,000 flats for rent at very low prices for families in difficulty. Banks have committed to raising up to 9,000 the number of homes assigned to this plan.

Today a technical meeting is expected, in which will participate the Economics staff and the heads of AEB and CECA, to finalize the details of the agreement, which will be made known next week through a conference call to the media.

Sources familiar with the development of the last weeks negotiations, say that at the time the expansion to 9,000 flats assigned to the plan is announced, they want to point out that it is done because the first 6,000 are already either occupied by their beneficiaries or in large part awarded to individual families.

This last statement contrasts with some facts published early in summer, according to which only one third of the flats selected for the fund were really already occupied/let or were about to be, awaiting the relevant contract to be signed. Some banks recognize that an effort has been made in recent months to allot a larger number of homes and that their particular commitment grew in just a few weeks.

Social fund

The social housing fund arose from the public pressure existing at the time and established the rent payments range between 150 and 400 euros per month, with a maximum limit of 30% of total net income of the family unit. The family was guaranteed the rent for the next two years, with a possibility to have it extended for a third.

To obtain a housing like that, the family must have been evicted from an apartment by an enforcement action for not having paid mortgage loan, after the first of January 2008 and meet other requirements, such as: not having other home ownership; total income not exceeding 1,597 euros per month; being a large family or with an underage child; having one family member with a disability of at least 33%; the debtor being unemployed, having exhausted benefits, or someone who has suffered gender violence.

Banking sources hope that the specifics of expanding the fund will be finally determined in today’s meeting, although it is not to be expected that the growth of flats will have large differences from the initial 6,000. At the moment the banks from former savings banks provided 3,500 homes and other banks — 2,500.

“What we want,” say industry sources, “is to point out that since the first fund is virtually exhausted it is advisable to have it extended” because the economic situation of many families is still very fragile and continued efforts made so far are still necessary not to leave them neglected.

It is possible that the access conditions soften somewhat on this occasion and even new limits on duration of the agreement are established, because it is unclear that those who gained access in the early stages, and are about to meet the first two years, are in conditions to obtain a home on the open market.

Original story: Expansión

Translation: Lee La