Ministry of Development to Promote 5,000+ Rental Homes for Less than €400

19 November 2018 – La Razón

The Minister of Development, José Luis Ábalos, has announced that his Ministry is going to transfer €21.5 million to the Public Land Management Company (‘Entidad Pública Empresarial de Suelo’ or Sepes) to promote the construction of more than 5,000 social housing rental homes, which will cost no more than €400 in Madrid, Barcelona, Valencia, Sevilla, Ibiza and Málaga.

At the Europa Press Informative Breakfast, the leader of the Ministry of Development said that the creation of these 5,000 homes, together with the 1,500 already included in the State Housing Plan, would account for almost one third of the 20,000 homes recently promised in Congress.

Specifically, Ábalos said during his appearance in the Lower House that the Ministry is going to promote a stock of 20,000 public homes for rental over the next four to six years with the aim of increasing the supply of such homes and helping to stop their rising prices.

For Ábalos, these measures lay the foundations for a housing policy that aims to guarantee access to housing. Nevertheless, he said that he is aware that this task, together with the protection of access to housing, will require the assistance of all of the administrations and political forces. For that reason, he urged that a “major agreement from the State for housing in Spain” be reached.

Decapitalising the stock of social housing

In this vein, he confirmed that the stock of social housing has been decapitalised to an affordable price and pointed out that this represents only 2.5% of the housing stock in Spain and that is “one of the lowest rates” in the European Union.

“Access to housing is a total headache for the middle and working classes and merely a pipe-dream for young people”, he added, after indicating that spending on housing by Spaniards living in rental properties is “well above the European average”, which is generating “a situation that cannot be permitted”.

During his speech, the Minister made it clear that recovering talent, raising the Minimum Inter-professional Wage (SMI), providing more wage stability and increasing pensions “are the right proposals to provide stability for Spain”.

He also said that work is being performed on long-term measures to increase the supply and recover the stock of homes, although he pointed out that work is also being carried out in the short term to modify the Urban Rental Law (LAU) to “limit guarantees” and give tenants more stability, and on the Civil Procedure Law (…).

The Royal Decree for Housing: due before the end of the year

When asked about when the Royal Decree that integrates the package of measures announced at the beginning of the legislature is going to come into force, Ábalos confirmed that the plan is for it to be approved before the end of the year because, in his opinion, “some of the measures are urgent and we need to get on with them”. In this way, he said that the real estate market in Spain is “reaching breaking point”.

In this vein, he said that “in Madrid, there are a lot of people who share flats because they do not have any other choice and all of that affects the minimum life project”. “What we are doing is not going to have a direct or immediate effect, but the urgency is vital in cities such as Madrid and Barcelona”, he said.

Original story: La Razón 

Translation: Carmel Drake

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