Ministry of Public Works to Give Rent Subsidies to 200.000 Low-Income Households

22/09/2014 – Expansion

The Spanish Government foresees granting €200 each month to 200.000 families that find it difficult to to pay their rents for what remains of 2014 and the entireties of 2015 and 2016. Included in the 2013-2016 Housing Scheme, the subsidy will amount to 33% to 40% of their monthly payments, on condition that the annual income of a household does not exceed €22.365 and the dwelling is being rented for below €600 monthly.

The measure has been introduced as an alternative for subsidizied housing (VPO by its acronym in Spanish) as in fact, according to the Ministry of Public Works, this type of rentals are not as cheap as thought and renting an unsubsidized dwelling in many provinces of Spain appears to be much less expensive.

The form of assistance will be given out for 12 months with a possibility of prolonging it until the end of the State Scheme. In total, each low-income family may receive up to €4.800 during the three years.

Families which do not earn more than the Spanish minimum wage index (IPREM) fixed at €22.365 may apply for the rent subsidy. The amount may vary in line with the number of family members. Moreover, evicted families will be given priority.

Ten out of seventeen Spanish regions have already signed the covenant: Catalonia, Extremadura, Castille-La Mancha, Cantabria, Asturias, Castille and Leon, Aragon, Galicia, Andalusia and the Canaries, while the rest will do so at the end of September or at the beginning of October.

The Ministry will invest €2.311 million and the regions €216 million in implementation of the whole Scheme. The rent subsidies solely will represent an expense of €480 million annually with expected private contribution of €1.27 billion more.

Together with the plan, that includes rehabilitations and subsidizing of 230.000 mortgage loans, the Monistry of Public Works contemplates creation of 36.000 jobs within the three years.

Such an indirectly protected tenancy is a very desired measure among the housing experts and the left-wing party. The previous Government has established it for the young (i.e. below 30) only, who received €210 monthly.

The new, €200 assistance will be universal. Last year, the Government estimated that throughout 2014, 48.000 grants will be given to poorer households.

When  it comes to renovations, 50.000 dwellings will receive them over the three years. From the socio-economic point of view, focusing on rehabilitation of the complete neighborhoods is considered the most efficient.


Original article: Expansión (by Juanma Lamet)

Translation: AURA REE