Tag: affordable rental housing

Madrid to Avoid Price Controls on Rental Flats

4 January 2020 – José María García, the Community of Madrid’s General Director for Housing and Rehabilitation, explained to idealista/news in an interview that the government of Madrid will not intervene in the market to place limits on rental prices in the region. Such measures have generally proven counter-productive in other European cities. The government has instead opted to concentrate on increasing the supply of rental housing to combat the recent price inflation.

A regional plan, called the Plan Live in Madrid, will use publicly owned land for the development of affordable rental homes. At the same time, the government intends to invest in urban renewal to take advantage of existing, though possibly degraded, properties. Young buyers, under the age of 35, will also receive deductions on interest payments on mortgages.

The Spanish government has already identified sufficient land to build approximately 15,000 homes and expects to find enough for at least another 10,000.  The land is spread out around Madrid, in areas such as San Sebastián de los Reyes, Alcobendas, Getafe, Alcalá de Henares and Tres Cantos.

José María García, Director General de Vivienda y Rehabilitación de la Comunidad de Madrid, ha explicado a idealista/news en una entrevista que el gobierno de Madrid no intervendrá en el mercado de alquiler para poner límites a los precios en la región de Madrid. Dichas medidas generalmente han producidas resultados contraproducentes en otras ciudades europeas. En cambio, el gobierno ha optado por concentrarse en aumentar la oferta de viviendas de alquiler para combatir la reciente inflación de precios.

Un plan regional, llamado Plan Live en Madrid, utilizará terrenos de propiedad pública para el desarrollo de viviendas de alquiler asequibles. Al mismo tiempo, el gobierno tiene la intención de invertir en la renovación urbana para aprovechar las propiedades existentes, aunque posiblemente degradadas. Los compradores jóvenes, menores de 35 años, también recibirán deducciones en los pagos de intereses sobre hipotecas.

El gobierno español ya ha identificado suficientes terrenos para construir aproximadamente 15,000 hogares y espera encontrar suficientes para al menos otros 10,000. El terreno se extiende por Madrid, en zonas como San Sebastián de los Reyes, Alcobendas, Getafe, Alcalá de Henares y Tres Cantos.

Original Story: Idealista – P. Martinez-Almeida & Luis Manzano

Translation/Summary: Richard D. Turner

Spanish Government to Create Land Bank for the Development of Affordable Rental Housing

28 October 2019 – The Spanish Government announced that it was working on a plan to cede public land for the development of affordable rental housing through a series of auctions. The head of the Ministry for Development, José Luis Ábalos, stated that the ministry is working on a plan to auction the surface rights to public land for 50 years so that private developers can build and manage affordable rental housing. The government is looking to address the recent increase in prices.

The ministry is looking to create a single land bank, using land from several different ministries. The government hopes that this management model, if successful, will be replicated at a regional level.

Original Story: Cinco Dias

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

La Generalitat Approves a Law to Limit Rental Prices in Cataluña

21 May 2019 – Eje Prime

The executive led by Quim Torra has approved a royal decree to limit residential rental prices in Cataluña so that they will not exceed 10% of the reference index in neighbourhoods and cities with an “accredited lack of affordable housing”.

That percentage increases to 20% in the case of new or completely refurbished homes for the five years following the building work. Meanwhile, for flats with exceptional views, swimming pools or gardens, the percentage may rise to 25%.

The decree considers areas with a “tense housing market” to be those municipalities where the provision of affordable rental housing is at risk. In particular, it makes reference to towns where rental prices have grown sustainably by more than average and where the increase in the demographic density is not being matched by the growth in the housing stock, amongst other factors.

Original story: Eje Prime

Translation/Summary: Carmel Drake

Locare Buys a Rental Home Development from Vía Célere

15 May 2019 – El Economista

In just one year, Locare Real Estate has become one of the main drivers of affordable rental housing in Spain, with a portfolio of more than 700 homes at different stages of completion. To this end, the firm has just signed an agreement with the property developer Vía Célere to acquire one of its developments in the Madrilenian town of Valdemoro.

Locare is already working on another development in the same town and together the two estates will contain 180 homes and will involve an investment of €23 million. The homes will be adapted to Locare’s style, which means that they will be suitable for rental.

This operation represents the first step by the property developer led by Juan Antonio Gómez-Pintado into the rental market and sees the firm follow in the footsteps of Aedas Homes and Metrovacesa.

In its first year of life, Locare has already disbursed €90 million of the €120 million in funding that it raised and has launched five other developments in Móstoles, Torrelodones, Collado Villalba and Alcalá de Henares, containing almost 1,000 units in total. The firm is already working on the launch of a second fund to continue its work in this field.

Original story: El Economista (by Alba Brualla)

Translation/Summary: Carmel Drake

Barcelona Activates 72 Public Plots for the Construction of 4,644 Affordable Rental Homes

11 September 2018 – Inmodiario

The activation of new public developments forms part of the Plan for the Right to Housing 2016-2025, and the current data indicates a level of output never seen before in terms of the construction of new homes for public rental in the city (of Barcelona).

On the basis of all the actions planned, the municipal Government will increase the public stock of affordable rental homes in the city by 50% in six years.

72 projects

The 72 projects underway have been accelerated in recent years, and 80% of the public housing that is going to be constructed will constitute affordable rental properties.

Construction of 11 of the developments has now been completed, comprising 648 homes, some of which have already been handed over. In other cases, the final procedures are being completed so that they can be handed over to the families soon.

On thirteen public plots, construction work has begun or permission has been granted for the construction of 574 homes. The package of projects includes both those developments that are in the process of being awarded to construction companies and those that have already been built.

On 29 of the plots, public tenders to select the companies to carry out the projects have already started; the work on those sites will generate 2,331 homes. Finally, 19 other developments are in the preparation phase, and the procedures to carry out their public tenders have been started with a view to building 1,091 new homes.

More affordable homes in the medium term

In addition to the 72 plots mentioned above, work is being performed on 52 other sites to activate the construction of homes over the medium term; they are in different phases of the urban planning process to ensure that they are dedicated to the right to housing service (…).

With the objective of growing the stock of public housing still further and bringing it in line with those of other European cities, it is hoped that a group of sites pending planning permission will be granted the condition of plots so that they can also be dedicated to the construction of public housing. Most of those sites are located in areas of the city that are already undergoing transformation, such as La Marina, 22@ and La Sagrera.

Municipal resources for rental housing

In just 8 years, the growth in the stock of rental housing is going to add as many new homes for public rental as have been created over the last 80 years. Moreover, the process is mainly being carried out (95%) using municipal resources, and with support from the European public bank, given that the participation of the Generalitat de Catalunya and of the State is at its lowest level since 1981.

Besides the construction of public housing and management of land permits, the Town Hall has boosted the acquisition of homes through various instruments established to that end in the governing legislation, such as the right of first refusal, direct purchase and assignment of usufruct.

In this context, 531 homes have been purchased and another 251 are in the process of being acquired. By the end of the current mandate, more than 750 homes are expected to have been purchased and €70 million will have been invested using municipal resources only (…).

Original story: Inmodiario

Translation: Carmel Drake