30 April 2017 – Expansión
Significant impact in Madrid and Barcelona / Almost 80% of Spain’s illegally occupied homes are owned by financial institutions.
The illegal occupancy of homes has become a significant problem for a large part of the financial sector in Spain. Years of economic crisis and unprecedented levels of unemployment and a still cautious recovery (with no obvious changes in access to housing) are some of the causes that explain the high levels of misappropriation recorded by the Spanish banks with respect to their housing stock.
According to data from the sector, currently, between 85,000 and 90,000 homes in Spain are illegally occupied. Of those, around 80% (and maybe more) belong to financial institutions. In other words, at least 70,000 properties of the stock controlled by the banks (and related companies such as Sareb) are inhabited illegally.
One of the entities most affected by illegal occupation is Bankia. Although the bank, which is controlled by the Frob, transferred the majority of its real estate assets to Sareb, it still has almost 5,000 homes with tenants in an illegal situation. Meanwhile, Banco Popular has 1,635 such homes. Other large financial institutions have chosen to not disclose individual figures, but they acknowledge that this phenomenon is representing a growing management problem.
The volumes are substantially lower for the smaller entities. In this way, Ibercaja reports 390 properties with illegal tenants. Kutxabank, meanwhile, states that its stock of illegally occupied homes amounts to 300 units, according to its most recent figures.
All of the sources consulted in the sector indicate that the highest volumes of illegal occupancies are recorded in Madrid and Barcelona. Spokespeople for the entities talk about misappropriation percentages that are proportionally higher in those two capital cities, not only due to the impact of Spanish legislation, which they consider to be “very rights-based (sympathetic towards tenants)”, but also because of the greater permissiveness of the authorities there.
According to various sources in the sector, this permissiveness is so great that, together with the phenomenon of occupations by vulnerable groups, the number of misappropriations by problem groups has soared. The groups “back this route to obtain access to housing”, because they are protected by what the banks consider to be a “right to occupy”, and are incited by social players such as the anti-eviction citizen platforms and those affected by mortgages.
There is a certain amount of conflict between the financial institutions and the administrations regarding how to consider certain occupancies. The entities themselves calculate that only between 35% and 50% of illegal tenants are vulnerable, whilst the Town Hall of Barcelona for example, estimates that the percentage exceeds 95%. Meanwhile, the Town Hall led by Ada Colau limits the percentage of “problematic occupancies” to 4.5%, whilst the Town Hall of Madrid increases that figure to 13.1%. These misappropriations have a significant impact on the value of the asset, with entities being forced to apply discounts of up to 52% on prices in order to place them.
Original story: Expansión (by Nicolás M. Sarriés)
Translation: Carmel Drake