The First Housing Scheme to Finance Only Rent & Rehabilitation

18/07/2014 – Cinco Dias

A little bit later than originally planned, the Council of Ministers finally approves the last tranch needed by the central Government to sign the bilateral agreements with all Spanish regions and set in motion the Government´s Housing Scheme 2014.

Once the authorization granted, the Ministry of Public Works will try to sign the convenants with the regions having the housing competence as soon as possible. “This time the process was more complex as we had to close the previous schemes with aids not included in the new Plan. For instance, the subsidized housing development as ownership is going to disappear”, told the department led by Ana Pastor.

Thus, the new scheme foresees spending more than €2.3 billon on direct assistance and on the payment of interests of still alive loan subsidy. The amount should be amplified by additional, €216 million contribution promised by several regions.

Moreover, the plan is said to generate a €1.2 billion private investment and will create 30.000 direct and 105.000 indirect jobs. While the lease-to-purchase social housing got stamped out, the scheme will focus on refurbishment and rent.

With the huge housing stock to be sold, the strategy could not support construction anymore. For this reason, rehabilitation of homes and buildings takes priority. Also, there will be a special financing program for these projects. The segment will involve significant private-public cooperation.

In parallel, the Government is working on design of the Future Plan For Rehabilitation and Energy Efficiency which will put main pressure on the residential building stock.

The Spanish highest authority has previously amended the Rehabilitation Law in order to remove legal and administrative obstacles which had halted many projects in the past. The regulation sets, for the first time, “a unified limit for the legal duty of the owners on the state of their property”. Besides, it gives a possibility of re-investing capital gains proceeding from refurbishment works into the owners´associations, thereby facilitating their financing.

 

Original article: Cinco Dias (by Raquel Díaz Guijarro)

Translation: AURA REE

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