Spanish Supreme Court Rules Against Barcelona’s Tax on Empty Properties

2 July 2019 – Richard D. K. Turner

The Third Chamber of the Supreme Court dealt Ada Colau a setback, ruling against a penalty on empty dwellings in the hands of financial institutions. The Supreme Court upheld the Superior Court of Justice of Catalonia’s ruling stating that the Barcelona City Council does not have the power to impose such a tax.

The municipal ordinance had set a rate of 633 euros for each case opened upon discovering an empty flat and 286 euros for each additional requirement in cases where the owner failed to comply with the municipal order.

Original Story: El Confidencial – Elena Sanz

 

Barcelona Fines Two Funds €2.8M for Leaving 24 Flats Empty

4 March 2019 – Eje Prime

The mayor of Barcelona, Ada Colau, has fined two investment funds €2.8 million for leaving two properties empty for more than six years on Calle de Aragó and Calle Pau Claris, in the Eixample district. The fine has been issued under the Right to Housing Act from 2007, which establishes penalties for the poor use of homes that have a social function and which ought to be inhabited.

If a property remains vacant for more than two years, its owner may be fined by between €90,000 and €900,000 per home. In total, the buildings subject to these fines comprise 24 homes.

Colau defended her housing policy and pointed out that the fines form part of a comprehensive approach by her government that includes the construction of 70 new developments, the requirement for private developers to build 30% social housing and conditioning any help for renovations on maintaining rental prices.

The fines could be reduced if the owners agree to let the Town Hall include the flats in their social housing stock.

Original story: Eje Prime

Summary/Translation: Carmel Drake

Barcelona Reserves 8 Plots on which to Build 512 Social Housing Units

17 January 2019 – La Vanguardia

Barcelona is going to reserve eight plots on which to build around 512 social housing units for young people, the elderly and other groups with social needs, together with public facilities, through a Modification of the General Metropolitan Plan (MPGM).

The Town Hall of Barcelona’s Commission for Ecology, Urban Planning and Mobility approved the revised MPGM to incorporate those 8 plots into the social housing system yesterday, with votes in favour from the municipal government, the Demòcrata, ERC and CUP groups, and the unassigned councillors Gerard Ardanuy and Joanjo Puigcorbé. There were abstentions from Cs, PSC and PP.

According to a statement from the town hall, the plots are located in Gràcia (2), Ciutat Vella (2), Eixample (2), Sants-Montjuïc (1) and Horta-Guinardó (1).

Four of the plots are owned in their entirety by the municipality, whilst the town hall will acquire the two that are completely private as well as the private plot of another site of which it is only part owner.

The eighth plot is on Via Laietana, 8-10, and currently houses the headquarters of the National Institute of Statistics and the Electoral Census Office, which is owned by the Town Hall of Barcelona and several other public administrations.

Specifically, this new plan proposes incorporating the plots into the housing system, which also includes plans for facilities on the ground floors.

The procedure is based on the fact that the law allows a maximum of 5% of land classified as local public facilities to be dedicated to social housing.

On the basis of the land that this MPGM is activating, the actions carried out and/or forecast in the current plan represent approximately 2.81% of the plots only, according to reports from the Town Hall.

This MPGM now enters a period of public consultation for one month and so its provisional approval in the Plenary of the Municipal Council and definitive approval by the Sub-Committee for Urban Planning in Barcelona, a body of La Generalitat, could be completed before the end of the mandate of the mayor Ada Colau.

This is the second MPGM that the municipal government has carried out in the current mandate to activate plots to build social housing.

In December 2016, the Town Hall approved a first plan that reserved six plots for the development of 519 homes. Specifically, two of those were located in Gràcia, two in Sant Martí, one in Sants-Montjuïc and another in Horta-Guinardó.

Original story: La Vanguardia 

Translation: Carmel Drake

Town Hall of Barcelona Buys a 114-Home Social Housing Block

27 December 2018 – La Vanguardia

On Thursday, the Town Hall of Barcelona announced the completion of the purchase of a building located at number 7 Calle Encuny containing 114 protected homes. The property, located in the heart of the Marina del Prat Vermell neighbourhood, belonged to the entity Proviure CZF Parc d’Habitatges, a company formed by BBVA and the Consorci de la Zona Franca de Barcelona (Consortium of the Zona France of Barcelona). “With this operation, we ensure that the housing block will not be sold to vulture funds”, said the mayor of the city, Ada Colau, who referred to the purchases that such investment groups have been carrying out in various cities.

The acquisition has involved an investment of €5.8 million by the Town Hall. This building is the largest that Ada Colau’s government has purchased to date, which so far in its mandate, has acquired another 21 entire blocks. In total, including this new property, the Town Hall has acquired 661 flats since 2015, which has involved a total disbursement of €64.12 million. “It takes a long time to build social housing units. And we have to respond to a problem that is worrying a lot of citizens”, said the mayor.

According to Colau, of the 114 flats that are going to be incorporated into the Town Hall’s public stock, around 59 are empty, but in a very good condition (the development was built in 2007), and so it is expected that around 30 will be incorporated into the social emergency pool in January, where around 480 family units are still waiting to be assigned a home.

“We need the Generalitat to start making housing policies in Barcelona”, said the mayor Colau, who has accused the regional government of not fulfilling its obligations in this regard. “The Town Hall takes care of 78% of the demand from the social emergency pool when it should be covering 40%. It is assuming a responsibility that corresponds to the Generalitat”, said Colau.

Original story: La Vanguardia (by Raúl Montilla)

Translation: Carmel Drake

Colau Halts Investments in Barcelona’s 22@ District

10 December 2018 – Catalunya Press

Colau’s municipal government has halted several investments in the 22@ district of Barcelona, which affects companies such as Acciona, Värde Partners and Metrovacesa.

According to sources in the real estate sector, several multinationals will also end up missing out, including the French company Bouygues, the family business Espais and private funds, such as Semillas Fito.

The histories of each firm are very varied. Shaftesbury purchased an abandoned factory in 2017, where it wants to build an office building spanning 16,000 m2, a turnkey project where the multinational technology firm Cisco is going to open a research centre for intelligent cities. The land purchase involved an investment of around €10 million, according to El Confidencial.

The US firm Värde spent €50 million in total during 2017 buying land in the area affected by the revised plans of Colau, who now wants to modify the urban planning arrangements, which will mean the suspension of all projects. It was one of the largest land operations of last year in Barcelona, involving 52,000 m2 of buildable office space. At stake, a €70 million investment, which is now under threat.

Acciona has been in the area since 2001 and is the owner of an entire block between Calles Perú, Bolivia, Fluvia and Selva de Mar, which spans a surface area of 53,380 m2 and where it wants to build 33,200 m2 of office space.

Sources in the real estate sector indicate that the suspension of all of these projects, involving approximately 2 million m2 of office space, is only going to serve to put more pressure on prices in the consolidated 22@ area, which has now been completed south of La Diagonal, where Torre Glòries and the other offices are now occupied. In other words, prices will rise.

Original story: Catalunya Press

Translation: Carmel Drake

Barcelona to Build Social Housing on the Rooftops of Schools & Markets

7 December 2018 – Eje Prime

Barcelona is adding a new twist to its efforts to increase its stock of public housing. The Town Hall of the Catalan capital, governed by Ada Colau, is planning to build social housing units for rent on the rooftops of public buildings such as libraries, markets, schools and even a metro station.

The first test of this new housing model will be carried out in the Gràcia neighbourhood. The Town Hall’s urban planning area is also looking at other areas in the city such as the Gothic neighbourhood, El Raval, Ciutat Vella, Sant Antoni and the Sagrada Family district, according to El País. Another idea that the Town Hall is considering is building flats on top of the Fontana metro station in Gràcia.

The Town Hall is searching for public buildings that have not used up all of their buildability into which to incorporate social housing. The benefit of this model is its speed, given that the procedures would be streamlined by the absence of the need to modify the current urban plan.

This new proposal from the Town Hall of Barcelona forms part of the Housing Plan 2016-2025, which Ada Colau’s government launched two years ago. Another formula that the Town Hall is going to use is Aprop, whereby homes are constructed inside (shipping) containers.

Moreover, this week, Colau received the green light from the Generalitat de Catalunya to establish her star measure involving new-build projects. Barcelona is going to modify its metropolitan general plan (Mgpm) so that 30% of all new build and renovated residential developments must be allocated to social housing.

Original story: Eje Prime

Translation: Carmel Drake

La Generalitat Blocks Colau’s Initiative to Dedicate 30% of New Builds to Social Housing

21 November 2018 – Eje Prime

The Government of Cataluña is blocking Ada Colau’s star initiative in terms of public housing, for the time being at least. The mayor of Barcelona has faced a setback following the decision of the Sub-Committee for Urban Planning, which has decided to postpone the ratification of the municipal agreement stating that 30% of new build properties in the city must be dedicated to social housing.

Colau was outraged by the decision, which she blamed on the Catalan Ministry for Land and Sustainability, which reports into La Generalitat and which “is now seeking to include changes and increase the extensions”, lamented the mayor.

“I do not want to think that La Generalitat has yielded to the pressures of any of the very powerful real estate groups”, added Colau. She is surprised because PDeCAT and ERC, allies in the regional government, “want to introduce reductions when those same parties approved the measure in the Town Hall”.

“The Sub-Committee for Urban Planning does not have to give an opinion on this measure, it just has to approve it”, said the mayor. “It is unacceptable: La Generalitat should not downgrade a municipal proposal, which in this case is also well argued legally and economically and which has already been approved”, said Colau.

Original story: Eje Prime

Translation: Carmel Drake

30% of the New Builds in Barcelona’s 22@ District will be Social Housing Units

19 November 2018 – La Vanguardia

The mayor of Barcelona, Ada Colau, neighbourhood organisations and economic and social change agents have signed an agreement to modify the 22@ district, to provide it with more social housing and public transport and to avoid the gentrification of the neighbourhood. In this way, the main transformation will be that the percentage of land reserved for social housing in the northern area of the Catalan capital will increase from 10% to 30%. And most of that will be rental housing, although the plan is to also grant some land to cooperatives and social entities so that they can build protected flats in another form. Similarly, The Town Hall wants the 22@ district to be a space for trials and experimentation in the search for solutions to issues relating to housing and mobility.

The 22@ district comprises 200 hectares in Barcelona, which started to be transformed in the year 2000 and which has turned Poblenou into a hub for small and large technological companies. It is a model for long-term success that is now going to change its strategy to obtain a mixture of uses between tertiary and residential. For that reason, on the 80 hectares that are still left to be developed – above La Diagonal – the surface area dedicated to public housing is going to be increased. In total, between 5,000 and 6,000 new flats will be constructed in the space.

Ada Colau has highlighted the critical efforts that many players have made to be able to sign the document that reviews the 22@ district after 18 years of development. “It is a transcendental agreement for the city. Technological innovation is not enough to make a city”, said the mayor. In this sense, she highlighted the importance of building more housing to bring life to the neighbourhood.

The agreement that has been signed this morning establishes two areas within the technological district that will require Modifications to the General Metropolitan Plan in order to carry out the new transformation. On the one hand, the neighbourhoods of Provençals del Poblenou and Maresme, and on the other hand, the areas of Bogatell, Trullàs and Plata del Poblenou. Whilst in the first spaces, the idea is to obtain an equilibrium between offices and housing, increasing the land available for the construction of public homes, in the second, the plan is to declassify the whole area to preserve the old fabric of Poblenou. The experts understand that these buildings, due to their morphology, are not ideal for housing technological activities (…).

Original story: La Vanguardia (by Silvia Angulo)

Translation: Carmel Drake

Juan Velayos: “Spain Needs to Create a Large Rental Player”

22 October 2018 – Eje Prime

Neinor Homes is going to reach “cruising speed” in 2019. The listed property developer is working to close the year with the delivery of almost 1,000 homes, half the number planned for next year. In the growth plan for the real estate company for the next few years, its CEO, Juan Velayos, does not rule out selling entire developments to a large rental home manager, a type of player that “Spain needs to create”, assured the director at a breakfast meeting held yesterday in Barcelona.

Velayos recognises that, for the time being, there are not any real estate companies specialising in rental “with such a large volume that would allow them to offer us an attractive margin, but we would be delighted to negotiate with any of them”.

The possibility of expanding its portfolio of clients through agreements with large asset managers could prove attractive for one of the property developers with the largest land bank in Spain and which forecasts starting to hand over 4,000 homes per year from 2020 onwards.

In total, the listed company has buildable land on which to construct 13,500 homes spread over 180 developments all over the country. The external valuation of this portfolio amounts to €1.813 billion, according to sources at Neinor.

“The company has already started to hand over homes and generate a positive cash flow and result”, highlights Velayos. The property developer currently has cranes at sixty developments, which will introduce 5,000 homes onto the market. Following the latest purchases of land in Bilbao, Sevilla and Madrid, “we have the land bank covered until 2021”, confirms the director.

In financial terms, Neinor recorded revenues of €78.9 million during the six months to June. That figure reflects a lot of activity in the marketing area. As at 30 September, the property developer had pre-sold 3,000 of the 7,000 homes that it had on the market, resulting in revenues of more than €1 billion for the company controlled by the Israeli fund Adar Capital.

“We will reach cruising speed in 2019”.  

Velayos trusts that the increase in productivity this year will allow Neinor to reach “cruising speed in 2019”. Next year, the listed company will have more than 120 developments underway, with a percentage of pre-sales that already exceeds 75%.

On this roadmap to lead the Spanish residential segment, Neinor trusts “wholeheartedly” in Cataluña, confirmed Velayos. It represents the firm’s current “star” location, as proven by the fact that 50% of the 5,000 homes that the property developer currently has under construction in Spain are located in this region and, primarily, in the metropolitan area of Barcelona.

“We are working on quite a few operations in the first ring”, said the director. In terms of the profile of the property developer’s buyers in Cataluña, young couples stand out, accounting for 39% of its customers, ahead of families with children (33%). In this sense, it is worth noting that 15% of its clients are investors, a percentage that exceeds Neinor’s average at the national level (11%).

Regarding the moratorium that Ada Colau is planning to launch in Barcelona, and which will oblige 30% of all new developments to be reserved for social housing, Velayos is clear: “That measure will not affect us because we won’t buy land in Barcelona” (…).

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Juan Velayos: “Neinor will Not Buy Land in Municipalities that Oblige 30% of Developments to be used for Social Housing”

19 October 2018 – El País

Next week, the ‘Meeting Point’ real estate fair is going to be held in Barcelona and the atmosphere is palpable: property developers are angry about the obligation to allocate 30% of new developments to social housing, a measure approved recently by the Town Hall of Barcelona, which may be extended to other municipalities. In an informative breakfast on Friday, the CEO of Neinor Homes, Juan Velayos, added fuel to the fire. Velayos explained that this “manifestly illegal” measure, will generate legal uncertainty and hinder the purchase of land for construction. In the case of Neinor Homes, Velayos confirmed that his firm will not buy land in any municipalities that adopt the obligation to allocate 30% of developments to social housing.

The measure approved by the municipal government led by Ada Colau will oblige property developers to reserve 30% of all new and renovated residential developments spanning more than 600 m2 to social housing. “The need to create social housing is a reality in the city, but the measure is very unfortunate. It is great for winning votes, but not for resolving the problem of housing”, said the CEO of Neinor Homes. In his opinion, the obligation established by the Town Hall, which does not discriminate by area or reflect the specific needs of neighbourhoods, only serves to restrict the action of property developers. They will not have the same incentives to buy or build and, in his opinion, that will affect buyers, who will see prices continue to rise.

For the time being, the measure does not affect Neinor Homes, given that the real estate company only has 40 homes in the city of Barcelona. Its activity is focused on the municipalities of the metropolitan area. When asked about the possibility of those cities also adopting the measure, Velayos said that Neinor “would not buy land, or it would only buy it for a much lower price, because it would be land with a worse output”. “Municipalities that adopt this measure are going to deter investment”, he added. Velayos also criticised the ruling from the Supreme Court that establishes that it should be the banks, and not customers, who bear the cost of the Documentation Registration Tax (AJD) for mortgages. In the opinion of the CEO of Neinor, this is another measure that “will generate legal uncertainty” and it is the buyers who will have to take out more expensive mortgages.

Uncertainty due to the independence process

Despite this “legal uncertainty”, which has also been linked to the independence process in Cataluña, Velayos insisted that the region “is a very important location”. Neinor Homes has 34 developments in the autonomous community, comprising 2,700 homes in total. Of those, four developments, containing more than 200 homes, have already been sold.

In Spain, Neinor owns land for the development of 180 projects and 13,500 homes. Of those, 5,000 homes are under construction. The land owned by the property developer is worth €1.8 billion. The firm plans to hand over 1,000 homes in 2018 with more than 100 developments underway, followed by around 2,000 homes in 2019 with 120 developments underway, before reaching its “cruising speed” with the delivery of between 3,500 and 4,00 homes in 2020 and 120 developments underway.

Original story: El País (by Josep Catà)

Translation: Carmel Drake