Recession Marks the End of Subsidized Housing

8/04/2014 – Cinco Dias

In less than two years the subsidized houses in Spain will go down in history due to public policy based on granting various types of  financial aids to developers and families for purchase of their own house.

Firstly, for the reason that the new four-year plan (2013-2016) no longer foresees support for development of subsidized houses destined for sale and the very few being finished will be intended for rent.

Secondly, as still an enormous amount of new stock lingers without being sold nor rented, many of the properties might be converted into state-protected units, on condition that they meet legal requirements.

Finally, the crisis haunting the country since 2008 caused a halt in financing for this type of housing and significant budget cuts that drove the subisidized houses nearly to extinction. Moreover, their prices almost leveled with those found in the free market, so they lost their attractiveness. (…).

The new subsidized housing performance showed a sharp decline from 43.262 units in 2010 to mere 7.483 units in 2012. This suggests a drop-off by 82.7% in two years and by 40% only between 2011 and 2012. The last year data has not even been revealed by the Ministry of Development. (…).

What is more, the emergency federal funding for tenants almost dimished during the aforementioned period of time. (…) For over one year the financial support shrank by 74.2%, from 18.780 beneficiaries in 2011 to only 4.838 receivers in 2012. The six following provinces have not even spent a red cent in 2012 on tenant funding: Catalonia, Valencia, Castilla-La Mancha, Castilla León, the Balearic Islands and Aragón.

The Ministry assures that the number of receivers is to be tripled, from 70.500 beneficiaries when the socialdemocrat PSOE was in office to around 200.000 tenants. In regard to subsidized land, there has been no transaction carried out across the country.

 

 

Original article: Cinco Días (by Raquel Díaz Guijarro)

Translation: AURA REE

38