Spain’s Ministry of Development Looks to Acquire Land from Sareb

25 November 2019 – Spain’s Ministry of Development (Ministerio de Fomento) is looking to create a partnership with the bad bank Sareb to help it achieve its goals under the Plan 20,000 housing policy. The government hopes to build 20,000 affordable rental homes to alleviate a lack of residential housing on the market and is considering buying land for the new developments from Sareb.

Original Story: El Economista – Alba Brualla & Rubén Esteller

Adaptation/Translation: Richard D. K. Turner

Podemos Pushes Increased Social Housing in Pact with PSOE

18 November 2019 – Podemos, the left-wing populist political party led by the political scientist Pablo Iglesias, signed a pre-agreement with the PSOE to create a governing coalition. The accord includes topics that the party, which was created in 2014, has espoused throughout its short life. One of the ten points included in the platform is a constitutional right to housing. Iglesias added that his party had not agreed to enter into a coalition with the centre-left PSOE because they were unable to agree on the subject beforehand.

Podemos is now looking to create a right to housing as a basis of the country’s constitution, with legal guarantees. Some of the proposed measures would directly affect the rental market, with indefinite rental contracts, with transparent grounds for justified termination and automatic extensions where the tenant is especially vulnerable and the landlord a large property owner. The party also supports increasing the stock of social housing by 50,000 flats per year through the compulsory transfer of empty homes held by funds, banks and Sareb, for example, for use in the rental market.

The announcement led to share declines for some of the largest Spanish socimis, including Merlin and Colonial.

Original Story: El Confidencial – Ruth Ugalde

Adaptation/Translation: Richard D. K. Turner

Developers in Spain Need to Build 2.5 Million New Homes to Satisfy Demand

14 October 2019 Foreign and domestic investors have recently poured a larger and larger amount of money into Spain’s residential rental market. In the last two years, large investment funds and developers like Blackstone, Ares, Greystar, TPG, Aedas, Quabit, Metrovacesa, Vía Célere have invested in the sector, going after the relatively high yields available.

The increasing investment in the sector is due to a series of factors. The last few years have seen major price increases, for both home sales and rentals, in Spain’s biggest cities, particularly in Madrid and Barcelona. The high cost of buying a home is also leading many Spanish families to forgo potentially buying a home, as they would have in the past when prices were more affordable.  Those families are now in the market for rentals.

Considering that the rising prices are due to an imbalance between supply and demand, common sense would suggest that a relatively easy solution would be to great increase the supply of homes for sale and rent. The total number of homes for rent in Spain is equivalent to 23% of the total housing stock, 9% lower than the European average of 34%.

To reach the European average, therefore, developers would have to build another 2.5 million homes, taking the total for Spain to 8.5 million homes. Building that many homes in the next fifteen years would require that developers construct approximately 167,000 houses per year during that period. That amount of development would require a total investment of roughly €300 billion, or 25% of Spain’s current GDP.

The need for that kind of investment in affordable rental homes to help curb rising prices is beginning to be addressed in a series of measures by some political parties, such as the PSOE. One of the proposals includes a law that would facilitate the transfer of the surface rights for public lands to developers which agree to building affordable housing, a measure that developers have demanded for years.

One of the biggest obstacles to such large-scale development is the complexity of managing and aligning interests between the municipal, regional and central governments. Market sources recommend common regulatory frameworks to facilitate the creation of greater legal certainty and the agility to obtain the necessary licensing and permits.

Original Story: El Confidencial – Elena Sanz

Adaptation/Translation: Richard D. K. Turner

Locare & Tectum to Launch New Fund as Rental Market Heats Up

14 October 2019 Locare RE and Tectum Real Estate Investments are preparing to launch a new €240-million fund aimed at the affordable rental housing market. The new fund, Tectum II, comes hot on the heels of a similar, €120-million fund the two firms launched just a few months ago. The investments come at a time when foreign investment and rising real estate prices, especially in Spain’s major cities, are driving families further out of city centres.

The first fund allowed the two firms to acquire seven plots of land, enough to build 1,000 affordably priced rental homes in the Community of Madrid. The plots of land are located in Torrelodones, Villalba, Móstoles, Arroyomolinos, Valdemoro (two plots) and Alcalá de Henares. The fund expects monthly rents to cost between 500 and 900 euros per month.

Short-term plans for Tectum II aim to start advertising approximately 1,500 new rental homes already in 2020.

Original Story: El Confidencial – E. Sanz / C. Hernanz

Photo: Locare

Adaptation/Translation: Richard D. K. Turner

Málaga Leads the Construction Sector in Andalucía with an Occupancy Rate of 88%

10 May 2019 – Expansión

Málaga is leading the ranking of house sales in Andalucía with 32,438 transactions and a market share of 32%, almost doubling that of its nearest rival, Sevilla (17.4%).

According to the participants of the round table organised by the Association of Property Developers and Construction Companies in Málaga (pictured above), the province is currently the driving force behind the construction sector and is home to some of the highest employment rates in the country (88.5%). That means that the sector now employs 62,700 people of the 70,200 surveyed in the Active Population Survey (EPA) when just five years ago, that figure amounted to just 57%.

In terms of the challenges facing the sector, the most important ones are rising rental prices and the generation of buildable land. In this context, the General Secretary for Housing at the Junta de Andalucía, Alicia Martínez, took advantage of the round table event to announce a new housing plan called ‘Plan Vive Andalucía’, which includes a greater commitment to affordable housing, the reactivation of obsolete urban areas and the promotion of R&D in the sector, amongst other initiatives.

Original story: Expansión (by Juan A. Gómez)

Translation: Carmel Drake

Carmena’s New Housing Plan: Rezoning in Exchange for Subsidised Housing

8 February 2019

The Madrid City Council is offering to rezone an industrial plot as land to residential in exchange for “30%, 50% or 70%” use as social housing.

Madrid is now following in Ada Colau’s footsteps, asking for investments in social housing from private developers. The Madrid City Council will offer to rezone an industrial site on the condition that part of it is converted into subsidised housing (VPO). José Manuel Calvo, the Councillor for Sustainable Urban Development, announced the decision in an interview with EjePrime. The initiative is a reflection of the Madrid City Council’s desire to invest in social housing.

Since the public stock of homes began falling in 2010, the government in Madrid has been unable to return to the levels seen before the crisis. When Manuela Carmena arrived at City Hall, the municipality had less than 6,000 public housing units. The mayor committed to adding another 4,000, half of which has been achieved four months before the end of her term.

The City Council of Madrid is now offering to work with private developers to increase the public stock of housing during the next government mandate. The idea is to rezone industrial lands so that developers can build homes, a percentage of which would have to be allocated to subsidised housing.

Carmena’s government requires any plots of land for subsidised housing to be independent

“I can tell developers that I will rezone the land as residential and then ask for 30%, 50% or 70% [for subsidised housing],” says Mr Calvo. While the exact figures have yet to be determined, the City Council believes that the developers’ investments must be “profitable” while the “municipality wants to receive the greatest possible number of homes.”

Carmena also insists that any plots used for subsidised homes be independent to avoid the Ada Colau’s situation in Barcelona. Ms Colau wants to oblige developers to set aside 30% for social housing buy her “proposal has run into legal difficulties because the homes are owned ‘proindiviso’,” meaning that the City Council jointly runs the residential associations with the developers.

In such cases, “as an administration, maybe you need the housing for needy families and the community can deny it,” says Calvo. “The proposal in Barcelona does not work,” he concludes.

The councillor is suggesting an alternative to Ada Colau’s proposal

Colau’s proposal was approved in a plenary session of the Barcelona City Council last September, with favourable votes by all political parties except the Ciudadanos (Citizens) who abstained, and the PP, which voted against. According to the municipality’s forecasts, the monthly rent for social housing of about 80 square meters should be 512 euros or €136,000 to buy. Taking into account that 1,114 apartments are built each year, the City is planning on 334 new homes per year.

The City Council’s proposal was not well received by developers, who met that same week in a commission to study the measure. The Catalan Association of Developers (APCE) questioned the legality of the proposal and warned that it could mean an end to new developments.

Original Story: EjePrime – Marta Casado Pla

Translation: Richard Turner

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

Construction Companies Look for Land in the Canary Islands for 2,000 Subsidised Homes

3 October 2018

The Association of Construction Companies is analysing Sareb’s real estate portfolio, which includes 2,900 properties on the Islands.

The builders are looking for land in the Canary Islands to finalise a “quick and complementary” housing plan before the end of the year that benefits the most disadvantaged segments of the population. The Association of Construction Companies and Developers of the Province of Las Palmas (AECP) met yesterday with a delegation from the Bank Restructuring Asset Management Company (Sareb), Spain’s so-called bad bank, to analyse the company’s assets on the Islands and potentially acquire the land necessary to follow through on their plan.

The president of the association, María de la Salud Gil, stated that the construction of some 2,000 subsidised homes, both for sale and for rent, is the goal of the initiative. “We have decided to develop a public-private housing policy and treat housing needs from a generalised perspective, creating a housing policy capable of serving every stratum of the population in function of their profiles,” she stated. For this, the builders are negotiating with different financial entities and developers to locate plots of land and “unfinished assets.”

Ms Gil explained before the meeting that the Government of the Canary Islands has full powers and jurisdiction in housing matters. “Therefore, it can structure procedurally agile rules and eliminate all the bureaucracy surrounding the creation of subsided housing.” She also stressed that housing and developments must attend three basic parameters: price per square meter, people who may buy or rent the properties and any support received by the interested parties.

Real estate assets

Sareb, which was formed in 2012, as a result of the nationalisation of four Spanish banks, has assets in the archipelago valued at 240 million euros. The portfolio is made up of some 2,900 properties, including land and housing, representing 2.5% of the company’s holdings in the country as a whole. Sareb has one thousand homes and 300 plots of land in Las Palmas, while it has 450 houses and 130 plots of land in Santa Cruz de Tenerife. The value of Sareb’s loans, which are secured by properties, is €550 million. In the Islands, the so-called bad bank has about 1,000 financial assets, representing 2% of the company’s total.

Ms Gil also explained that the development of subsidised housing is not linked with the construction of free housing or any size of homes. “It’s not just about building subsidised housing; it’s about addressing the housing market from a universal perspective,” she said. Even so, she explained that the association is trying to convince developers not to abandon subsidised housing because she believes that it helps “structure and balance the market and rental prices.”

Despite noting that the sector is currently held back by the delay in signing the pending state agreements, the president of the AECP stated that the construction industry already has “the muscle” to address the initiative.

Original Story: La Opinión de Tenerife – A. Rodríguez

Translation: Richard Turner

Euskadi Will Be Allowed to Expropriate Homes That Remain Uninhabited for More Than Two Years

2 October 2018

The Constitutional Court endorsed fundamental aspects of the Basque housing law that the PP government appealed in 2016.

The Constitutional Court (TC) has endorsed the ability of the Basque Government (Euskadi) and regional municipalities to proceed with the forced expropriation of homes that remain uninhabited for a period of more than two years without just cause and are located in areas where there is a proven demand for public or social housing. The institutions will have the power to place the properties on the social housing rental market when a need is found in the areas they are located.

“This does not mean that the Government or the municipalities are going to move ahead with a wave of expropriations,” the Basque housing councillor, socialist Iñaki Arriola, stressed. The pronouncement by Spain’s highest court let a decree stand that would permit the forced rental of homes in areas that have remained unoccupied for an extended period and where there is an elevated demand for social housing. It is, said Arriola, a “balance between policies incentivising social housing and punitive measures in the case where properties, such as housing, are not adequately put to use.”

The latest census of empty and uninhabited homes in the Basque territory will be made public tomorrow by the councillor, who has so far declined to cite the figure. The previous report, with data for 2015, noted that there were 86,325 empty dwellings (8.3% of all Basque households). Of these, almost a third (32%) were used as seasonal housing, and the remaining 68% were classified as unoccupied. Of the 58,697 unoccupied homes, more than half (35,647) were not on the market to rent or sell.

Homes will not be considered unoccupied when they are second homes and when their inhabitants are temporarily absent due to relocations stemming for work, health, dependency and social emergency reasons that justify the absence, Arriola said. Before declaring a dwelling unoccupied, the relevant institution must open a file, summon the owners for a hearing and later determine whether the situation merits forcibly placing the property on the social housing market through a temporary expropriation.

The Government of the PP appealed the Basque Housing Law in 2016 before the Constitutional Court, requesting that the court rule that several of the law’s precepts exceeded the regional government’s powers and encroached on the powers of the Spanish state. The Basque law, which establishes the subjective right to dispose of a home, was approved in June 2015 on the initiative of the PSE with the support of EH Bildu and UPyD. The PNV and the PP voted against the measure.

The last census stated that there are 58,697 uninhabited homes in Euskadi, the Basque territory

The appeal by Rajoy’s government was based on the fact that the Basque legislation imposes a new form of regulatory oversight on the right to own property, stating that ownership brings with it the duty to inhabit the residence. The State Attorney challenged 13 articles and several sections, most of which refer to the definition of uninhabited housing and the regional government’s tools for dealing with those unoccupied households and which are considering to be in contravention of their social function as established by law.

Councillor Arriola stated that the TC’s ruling validates “without any restriction” the ability of Basque institutions to intervene with unoccupied dwellings that “do not fulfil a social function.” The regulations give the Basque Government and municipalities the ability to determine when a house is considered to be uninhabited and provides those institutions with the instruments “to encourage their occupation or penalise their lack of use.”

The Minister of Housing approved of the court’s ruling which, in his opinion, grants the Basque government the “full jurisdiction” to regulate the sector with legal certainty. The court, however, also ruled that the article granting financial institutions, their real estate subsidiaries and asset management entities the ability to subject property owners to forced expropriation for the temporary use of dwellings subject to eviction proceedings for foreclosure is unconstitutional.

Original Story: El País – Mikel Ormazabal

Photo: Luis Sevillano

Translation: Richard Turner

Barcelona’s Town Hall Declares the Whole City an Area of First Refusal for Land & Property Purchases

2 October 2018 – Inmodiario

The plenary session of the Town Hall of Barcelona has approved two pioneering measures to defend its citizens’ right to housing: firstly, it will apply protected status to 30% of new developments and major renovations; and secondly, it will declare the whole city as an area of first refusal, with the objective of ensuring that the Town Hall will be able to acquire buildings and plots of land on a preferential basis.

Both measures have received support from Barcelona’s municipal groups En Comú, El Grup Municipal Demòcrata, Esquerra Republicana de Catalunya, El Partido de los Socialistas de Cataluña, La CIP – Capgirem Barcelona and the two councillors not assigned to a party, Gerard Ardanuy and Juanjo Puigcorbé, who have voted in favour of the measure. The Partido Popular de Cataluña voted against it. Ciudadanos voted in favour of declaring the entire municipality an area of first refusal but abstained from the vote to apply protected status to 30% of new projects.

The 30% reservation will represent an expansion of the public housing stock, especially in central neighbourhoods that suffer the most from real estate speculation and gentrification, and where the lack of available plots makes the construction of social housing extremely difficult. It is estimated that with the new regulation more than 50% of the new affordable homes will be located in those neighbourhoods.

Right of first refusal

That measure is accompanied by the declaration of the entire city as an area of first refusal, to enable the Town Hall to acquire plots and buildings on a preferential basis – which would include those 30% of protected homes – to expand the stock of public housing distributed across all districts.

The initiative, which involves the private sector, will affect both new buildings and major renovation projects exceeding 600 m2. Therefore, private property developers will be co-responsible when it comes to ensuring the right to citizens of a decent and adequate home.

It is expected that with the 30% reservation, around 330 homes will be incorporated into the stock of affordable housing each year, a figure that will help counter the abusive increases in rental prices (…).

The protected homes will operate under a general framework and it is calculated that 75% of Barcelona’s citizens will be able to access them. The affordable price of homes, which La Generalitat would determine, would currently be €512/month for an 80 m2 rental home and €136,400 in the case of a home purchase.

Social claim

These new regulations have been born out of the claim from entities that defend the right to a decent home and which have given a voice to the demand from citizens to put a stop to the real estate speculation that is forcing residents out of their neighbourhoods (…).

Original story: Inmodiario 

Translation: Carmel Drake