Barcelona’s Town Hall Buys 2 Buildings In Ciutat Vella For €6.5M

17 July 2017 – Eje Prime

Ada Colau’s Town Hall is continuing to grow its real estate portfolio for social housing purposes. The Town Hall of Barcelona has completed the purchase of two residential properties at numbers 7 and 11 on Calle Lancaster for €6.5 million, according to sources close to the operation. According to the same sources, the municipal Government will pay above the market price when it fully closes the operation.

Both assets had attracted attention from an international real estate fund, which had already signed  a “contrato de arras” to carry out the transaction, for which it was going to pay €5 million. However, according to sources involved in the operation, the Town Hall of Barcelona was negotiating in parallel with the owner of the property and ended up agreeing the purchase price of €6.5 million. The Town Hall has not made any statement about the deal.

The purchase of this building forms part of the acquisition policy that Ada Colau’s team has been working on in recent months. In order to avoid the eviction of residents, the Town Hall has purchased at least four buildings across Barcelona, which may otherwise have fallen into the hands of real estate investment funds, had it had not disrupted the process.

At the beginning of last year, the Town Hall of Barcelona purchased the building located at number 44 on Paseo de Joan de Borbí, in the Ciutat Villa district. The acquisition of that building, which was owned by the General Treasury for Social Security, involved an investment of €3.6 million by the Town Hall and the property was allocated for social housing. The acquisition of these types of buildings is one of the solutions that Colau’s team is adopting to increase the stock of social housing assets.

This year has been one of the most active for the Town Hall in terms of these types of acquisitions. The Town Hall announced the purchase of number 37 on Calle Leiva, located in the Sants neighbourhood for €2.7 million. The procedure was the same as that followed with the property in Calle Lancaster: in this case, an investment fund named Vauras Investment was willing to acquire the property from a financial entity (Anida, owned by BBVA).

The Town Hall made use of its right to sound out and withdraw, with the aim of avoiding the eviction of the property’s tenants. The residents had been working on an intense protest campaign for months, which had resonated across the whole city. In the last two years, Colau’s government has purchased 167 homes for €17.5 million (…).

Original story: Eje Prime (by C. Pareja)

Translation: Carmel Drake

Airbnb Pulls 1,000 Listings From Barcelona In The Wake Of Fraud Claims

10 July 2017 – El País

On Tuesday, Airbnb, the short-term home rental site, announced that it has taken down 1,000 listings in Barcelona’s downtown district of Ciutat Vella over the last week. The move comes just days after news emerged about cases of fraud involving homes listed on the popular vacation rental website.

It is also a follow-up to a pledge made by company officials in February, when they said they would introduce a one-host, one-home policy in a part of the city that is under increasing pressure from high levels of tourism. The gesture, meant to reduce the supply of short-term rentals in the area, was also viewed as an olive branch for Barcelona city authorities, who have been critical of Airbnb’s practices.

Back then, Mayor Ada Colau dismissed the gesture as “a joke” and said that what the city wants is for Airbnb to pull all the illegal listings from its site. Local authorities note that tourist apartments require a special license to operate as such, known as HUT under its Catalan acronym.

Now, Airbnb has released an open letter to Barcelona City Hall entitled: “Here’s why City Hall is wrong to turn its back on local families who share their homes.”

“Airbnb wants to be regulated in Barcelona, and we have zero tolerance for bad actors,” states the message. “We want to work with City Hall to clamp down on business operators who break the rules, while protecting local families who share their homes to boost their income and support their families.”

The letter is signed by Sergio Vinay, of the company’s public policy department, which is in charge of negotiating with local and regional authorities.

“In Barcelona, this guiding principle hits a roadblock. Unlike other major cities across the world, Barcelona has no rules for local families who occasionally share their homes,” the letter goes on to say. These rules are currently being worked out at the regional level.

“In the absence of such a collaboration, Airbnb has already taken steps to tackle issues facing Barcelona,” says Vinay in the letter. “In the last week alone, Airbnb has removed more than 1,000 listings that could affect long-term housing availability, as part of our ‘One Host, One Home’ policy. For context, that’s almost double the number of tourist dwellings that have ceased to operate following City Hall action.”

Vinay also takes issue with City Hall urban planning official Janet Sanz, who has been critical of Airbnb: “Janet Sanz is wrong to say that City Hall ‘is not fighting home sharing’ or local families who share their homes. It is – and by choosing to promote a campaign of fear and confusion over workable solutions, it’s local families who stand to lose most.”

The San Francisco-based firm claims that the average Airbnb host in Barcelona is a homeowner who makes an extra income of €5,500 a year on average for “sharing their home” around 70 nights a year. “More than two-thirds of hosts say they share their primary residence and almost a quarter say that sharing their home has helped them avoid eviction or foreclosure.”

Last month, it emerged that a Barcelona woman had rented out her apartment to a long-term tenant, who then illegally listed it on Airbnb and began subletting it. Unable to reach her tenant, the woman was forced to rent out her own place through Airbnb, at which time she changed the lock and reported the case to the authorities.

Original story: El País (by Clara Blanchar)

Translation: Carmel Drake

Anticipa Wants To Become Spain’s Largest Rental Home Manager

3 April 2017 – El Economista

Anticipa, the real estate subsidiary of the US fund Blackstone, wants to become one of the largest rental home managers in Spain. To achieve its objective, the company plans to consolidate its assets in different Socimis, which will be listed on the MAB, according to comments made to elEconomista by sources close to the fund.

Anticipa is the former real estate platform of Catalunya Caixa, which was acquired by Blackstone in 2014. That same year, the fund signed the purchase of its first major mortgage portfolio from the same entity. Known at the time as Project Hércules, the operation involved the transfer of 40,000 problem loans, for which Blackstone paid €3,615 million.

Since the acquisition was closed definitively, in April 2015, Anticipa has been in charge of managing these assets along with those from another six portfolios, which have a combined value of €7,000 million.

According to the same sources, Blackstone’s objective is to continue acquiring portfolios to reach 17,000 rental homes by the end of this year, which would make its subsidiary one of the largest residential managers in the country.

Anticipa already has 12,000 homes up for rent or in the process of being put up for rent in the short term and has placed a package of 5,000 units on the market through the Socimi Albirana, which debuted on the stock market last week. Those assets, located mainly Barcelona and Madrid, were inherited from Project Hércules.

In order to continue implementing its strategy, the fund is already working on the launch of a new Socimi, given that it considers that to be the most efficient way of structuring its portfolio. Socimis have a special tax regime in Spain and pay Corporation Tax at zero percent. In addition to Albirana, Blackstone registered two other Socimis last year, under the names Pegarena and Tourmalet.

Led by Eduardo Mendiluce Fradera, Anticipa has been in charge of managing the enormous portfolio of loans to individual borrowers, on a case by case basis, which it inherited from Catalunya Caixa.

To handle this task, the firm, which already had extensive experience in the real estate sector, expanded its workforce to incorporate more financial profiles, growing the team to include 330 professionals.

The 40,000 mortgages that Blackstone purchased in 2014 include loans with varying degrees of delinquency, from up to date to NPLs. Of the total, 3% have involved social housing cases, but none have ended in eviction.

Since Anticipa began managing this portfolio two years ago, it has managed to reach 10,000 agreements, of which the majority are “daciones en pago” and the remainder are debt restructurings.

Having freed up the asset, the firm’s objective is to allocate around 70-75% of its homes to rent, and to sell the rest – generally, it will sell those homes that are located in places where there is no demand for rental properties. (…).

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

Bank Of Spain: Home Evictions Down By 20%

21 July 2016 – El Mundo

A total of 17,939 homes were evicted by court order in 2015, up by 11.3% compared with 2014, of which 77% related to primary residences. Nevertheless, only 902 of those properties were occupied, which represents a 20.1% decrease compared with 2014, according to data from the Bank of Spain, which shows that the aforementioned increase was concentrated in the eviction of empty primary residences (35.7%).

In addition, the issuing bank states that 82% of the mortgages that gave rise to forced evictions of occupied homes, both primary residences and others – corresponding to 1,112 properties, down by 18.2% – were originated in or before 2007.

The lower level of activity in terms of evictions is also observed in the data relating to law enforcement involvement in property evictions. In this way, only 14 such interventions were recorded in 2015, down by 44%. Of those, less than half were carried out in primary residences.

If we add together the legal and voluntary proceedings during 2015, there was a 3.8% decrease in the total number of homes handed over, to 36,929 – i.e. 0.57% of all mortgages – which in the case of primary residences amounted to 2.4%, with 29,327 properties.

More than half of the homes handed over were done so voluntarily

The number of voluntary home hand overs decreased by 14.8% last year, to 18,990, with a reduction of 20.1% in the case of primary residences. Thus, voluntary home hand overs accounted for 51.4% of the total.

On the other hand, there were 16,175 “daciones en pago”, down by 12.4% compared with 2014, which accounted for 85.2% of all voluntary home hand overs. Of those, 81.5% related to primary residences, down by 19.9%.

Other data provided by the Bank of Spain indicates that the total number of mortgages granted for house purchases amounted to 6.3 million at the end of 2015, down by 1.1% compared to a year earlier.

Original story: El Mundo

Translation: Carmel Drake

Anticipa Has Accepted 2,400 ‘Daciones En Pago’ In 1 Year

18 April 2016 – El Periódico

Anticipa Real Estate, the real estate manager that the fund Blackstone acquired from CatalunyaCaixa, began by purchasing a portfolio of non-performing mortgage loans from the former savings banks for €3,600 million. The portfolio included 40,000 mortgages worth €6,400 million. In addition, it bought portfolios of property developer loans from Sareb and CaixaBank. Since April 2015, when that operation was closed, Anticipa has worked to recover those loans and the underlying collateral – the repossession of the asset -. During this period, it has signed agreements with 3,000 borrowers, of which 2,400 have resulted in ‘daciones en pago’ – “the handing over of homes in exchange for the cancelation of debt” – and 600 have resulted in the renegotiation of the loan, in such a way that the borrowers can make their mortgage repayments, according to Anticipa’s own summary of its first year of management.

The servicer – which is also responsible for managing the real estate assets of CatalunyaCaixa, now BBVA – bought the portfolio on 15 April 2015 and between then and 30 March 2016, it has closed around 400 operations per month. “We have signed 20 operations per day”, say sources at the entity. “And we have prioritised friendly relationships to enable both parties to reach an agreement”. The entity highlights that this process has been carried out whilst maintaining a good understanding with the platforms of people affected by mortgages (PAH), although they acknowledge that there are certain discrepancies with the PAH in Barcelona, which regards Blackstone as a “vulture” fund, even though it is a long-term real estate investor, which is firmly committed to the rental management business in Spain.

Anticipa highlights that it applies the code of good practice under Spanish legislation, whereby those families who have nowhere to go after a ‘dación en pago’ are offered social housing. In fact, 25% of the borrowers of the 40,000 mortgages pay their monthly instalments on time. Anticipa sends out an invoice each month and collects the corresponding funds. Of the remaining 75%, some (25%) of the borrowers pay intermittently and the rest (50%) do not pay at all. The company prioritises enabling those borrowers who pay intermittently to become regular payers, through the refinancing of their loans. “We apply a partial discount, we amend the term, the interest rate and the loan principal, to reduce the instalment and whereby facilitate the payment”, explains the entity.

Case by case analysis

If the borrower is still unable to pay, he is offered a ‘dación en pago’, and the remaining debt is cancelled in most cases. “Each case is analysed on an individual basis”. Anticipa helps the borrower to find a home if he has to leave or offers him a property to rent “at market price” or by means of “social housing”, as appropriate.

The entity does not rule out mortgage foreclosures when there is no other way of reaching an agreement with the borrower…But, “we have not carried out any evictions”, say sources at the entity…and the objective is to negotiate in order to avoid eviction in all cases”, they add.

Anticipa, led by Eduard Mendiluce…employs 360 people, of which almost 150 are dedicated exclusively to negotiating with borrowers. (…).

Original story: El Periódico (by Max Jiménez Botías and Olga Grau)

Translation: Carmel Drake

INE: Primary Residence Mortgage Foreclosures Fall By 12.4%

4 December 2015 – ABC

During Q3 2015, 5,959 primary residence mortgages were foreclosed, which represents a decrease of 12.4% compared with the same period in 2014, according to the mortgage foreclosure statistics published on Thursday by the National Institute of Statistics (INE). In inter-quarterly terms (the third quarter compared with the second quarter), mortgage foreclosures involving primary residences decreased by 31.3%.

The primary objective of this statistic is to provide information about the number of mortgage foreclosures initiated and registered in the Property Registers during the quarter in question. INE points out that not all mortgage foreclosure procedures that are launched end with the eviction of tenants. During the third quarter, 19,403 mortgage foreclosures were launched, 17.8% fewer than during the same period in 2014 and 32.9% fewer than during the second quarter. Of those, 18,344 related to urban properties (including homes) and 1,058 related to rural properties.

The number of mortgage foreclosures over urban properties decreased by 18.5% with respect to Q3 2014 and by 33.2% with respect to the previous quarter. Of the urban properties, 11,584 foreclosures related to homes, i.e. 59.7% of the total, and this figure represented a decrease of 15.6% compared to the same period in 2014. In terms of homes, mortgage foreclosures over homes owned by individuals amounted to 7,590 during the third quarter (down by -13.8% YoY), of which 5,959 were the primary residences of those individuals, whilst 1,631 were not the owners’ primary residences. The number in the latter category decreased by 18.4% with respect to the third quarter 2014.

Meanwhile, there were 3,995 mortgage foreclosures over homes owned by legal entities during the third quarter, a decrease of 18.9% with respect to the same period last year. According to INE, mortgage foreclosure procedures were initiated for just 0.03% of the total stock of family homes in Spain (18,378,100) between July and September 2015.

Decreasing trend for new builds and second-hand housing

Of the total number of mortgage foreclosures recorded involving homes during the third quarter, 9,971 related to second-hand homes, which represented a YoY decrease of 13.3%. Foreclosures over new homes amounted to 1,613, i.e. 27.8% fewer than during the same quarter in 2014. The statistics also reveal that, during the third quarter, 20.3% of the home mortgage foreclosures launched related to mortgages constituted in 2007; 17.2% related to mortgages granted in 2006; and 11.3% corresponded to mortgages signed in 2008. Put another way, 59.8% of the mortgage foreclosures initiated during the third quarter related to mortgages constituted between 2005 and 2008.

Between July and September, mortgage foreclosures over land amounted to 615, representing a YoY decrease of 55.9% and a QoQ decline of 49.5%. Meanwhile, mortgage foreclosures relating to commercial premises, garages, offices, storerooms, warehouses and other urban buildings amounted to 6,145, i.e. 16.8% fewer than during the third quarter last year and 31.9% fewer than during the previous quarter. Finally, there were 1,059 mortgage foreclosures involving rural properties during the third quarter, which represented a YoY decrease of 3.7% and a QoQ drop of 27.2%.

Andalucía leads the ranking

By autonomous region, Andalucía led the number of foreclosures involving homes during the third quarter, with 2,984 in total, followed by Valencia (2,339) and Cataluña (2,022). At the opposite end of the spectrum were Navarra and País Vasco, with just 63 foreclosures each. In terms of the number of foreclosed properties, Andalucía also led the ranking, with 5,019, followed by Valencia (3,718) and Cataluña (3,207). At the tail end were Navarra (99) and La Rioja and Cantabria (112).

Original story: ABC

Translation: Carmel Drake

Carmena Halts The Sale Of 2,000+ EMVS Homes

29 July 2015 – Cinco Días

Manuela Carmena, the mayoress of Madrid has announced that the Town Hall of Madrid will not sell any of the 2,086 rented homes, owned by the EMVS (Municipal Company for Land and Housing or ‘Empresa Municipal de la Vivienda y Suelo’), to vulture funds and that it will put a stop to 70 planned eviction processes. Her statement came after a meeting on Tuesday with the “Yo no me voy” platform, supported by more than 220 residents in five of the affected buildings in the ‘Centro’ neighbourhood of the city.

The beneficiaries of the social housing rental properties owned by the EMVS across the city started to receive notifications and visits in 2012, informing them that their contracts would not be renewed. Previously that was something that had happened automatically, every two years, provided two requirements were fulfilled, in accordance with Decree 100/86: the household income must not exceed a certain level and the tenants must not own any property in the Community of Madrid. In total, 2,086 contracts of this type are currently in place across the city’s 21 districts.

The EMVS started proceedings against tenants who refused to leave their rented homes. “To date, there are 70 processes underway, but these families have now recovered their homes. No-one is going to be kicked out on the street. The Town Hall of Madrid is going to withdraw all of those processes. For us, the right to housing, as recognised by the Constitution, is fundamental”, said Carmena. The EMVS’s commitment extends to 2,086 homes. (…).

Manuela Carmena said that the Town Hall is now “making contact” with residents who are currently “confused” because they think that their social housing contracts are going to be terminated and that their homes are going to be sold. We will explain to them that the contract “is valid and that they will not lose their homes”.

The councillor has not denied the “immense distress” that these tenants have gone through, after finding out that they had to leave the homes they had lived in for more than 20 years. (…).

Original story: Cinco Días

Translation: Carmel Drake

Andalucian Gov’t May Exercise Withdrawal Of Eviction Orders

22 June 2015 – Europa Press

At their first meeting on Friday, Susana Diaz’s new Executive Board approved the launch of the proposed draft bill for the withdrawal of evictions, which will allow the Government to exercise the right of withdrawal in the case of mortgage foreclosures conducted over free (non-subsidised) housing by financial institutions.

The decision was announced by Manuel Jiménez Barrios, the Vice-President of the Government and Minister for the Presidency and Local Government, at a press conference. He explained that the Government may exercise the right of first refusal on purchasing homes or buildings that are subject to mortgage foreclosure or the settlement and payment of mortgage-back debt.

“With the legal alternative of withdrawal, our main objective is to obtain social housing for rent, in order to provide a solution for families that have been deprived of their homes as a result of the eviction process”, said the Vice-President of the Government.

Jiménez Barrios insisted that that Andalucian Government is pursuing a “triple objective”, namely: to enable affected families to stay in their homes; to increase the Government’s stock of public residential housing linked to social policies; and to ensure that there is sufficient supply in the hands of the Administration aimed at vulnerable people and those with special difficulties.

The Vice-President also said that the aforementioned legislation will be rooted in the approval of the Regional Housing Plan, which is now in its final stages; according to his estimates, it will be approved “within the next three months”.

The draft bill also amends the penalty regime in terms of social housing in order to strengthen the protection for consumers on the buy-side of transactions. (…).

The bill establishes the creation of withdrawal areas, where the Government may intervene and whose limits are defined in the Regional Housing Plan. These geographical areas are determined on the basis of the economic situation of resident families, demand for housing, the characteristics of the properties and the historical incidence of evictions in those areas. On an exceptional basis and where duly justified, the withdrawal formula may be applied elsewhere as well.

Moreover, the Regional Housing Plan will specify the socio-economic criteria that people affected by evictions must fulfil to activate intervention by the Administration. Once the withdrawal has been exercised, the affected persons will have the right of first refusal to rent the property that has been their habitual residence. (…).

Original story: Europa Press

Translation: Carmel Drake

INE: Home Foreclosures Drop By 6.5% To 17,800 In Q1 2015

8 June 2015 – Cinco Días

During Q1 2015, 30,952 mortgage foreclosures (i.e. procedures to force the sale of properties resulting from unpaid mortgages) were recorded in Spain’s property registries. Of those 30,952 procedures, 17,780 related to homes, i.e. 6.5% fewer than during the first quarter 2014. The foreclosure of individuals’ primary residences amounted to 8,802, i.e. 6.9% fewer, according to data from INE.

The statistics institute highlights that not all mortgage foreclosures are the result of the legal removal (eviction) of owners from properties, and that in some cases, a single property is subject to several foreclosure procedures. The Bank of Spain has other statistics relating to evictions.

In general, non-payment results in foreclosure after a period of between six and 12 months, therefore the foreclosures completed during Q1 2015 related to mortgages that stopped being paid during the first half of 2014. Moreover, in addition to the 17,780 home foreclosures, INE recorded 10,316 other (foreclosure) processes involving premises, garages and offices and 1,361 relating to rural properties.

Most of the mortgages that result in the seizure of homes were signed during the last few years of the real estate bubble: 21.1% were signed in 2007, 15.2% in 2006 and 11.8% in 2008. Mortgages signed in those three years account for 48.1% of all foreclosures, although we should take into account that at that time, more than 100,000 mortgages were being granted per month, compared with current volumes of 20,000 per month. In relative terms, the worst year is still 2007, with 0.3% of the mortgages that were signed that year being foreclosed during Q1 2015, followed by 2008, 2009, 2013 and 2012 (between 0.21% and 0.25%).

By region, the effect of the real estate bubble is also leaving is mark: the highest rates of home foreclosures form a rainbow in the shape of the Mediterranean Coast. Andalucía leads the ranking (with 0.29% of the mortgages foreclosed last quarter), followed by Murcia (0.25%), Valencia (0.25%), Cataluña (0.23%). In the País Vasco, the rate is 0.02%.

Original story: Cinco Días

Translation: Carmel Drake

High Court Repeals Andalucían Anti-Eviction Law

27 May 2015 – Expansión

The temporary expropriation by banks of homes in the process of eviction is unconstitutional. That was the ruling issued by the High Court (HC) following its in-depth analysis of the controversial decree law governing the Social Function of Housing, approved by the Government of Andalucía in June 2013, which was challenged by the Central Government.

Until the HC suspended this law, as a precautionary measure, 121 expropriation demands were filed, over a three-year period. The law was later reissued, although without any significant changes

According to the ruling, articles 1.3 and 53.1 of the regional law have been annulled. Previously, those articles imposed on the owner of houses “the duty to effectively use property for the residential purposes provided for by the law”, since the essential content of the rights of ownership pervade; an area “prohibited” for the decree law of the autonomous community. This law does not affect individuals.

For the same reason, the ruling issued by the HC declares the imposition of fines on financial entities that own uninhabited homes to be unconstitutional. To date, the Andalucían Government has imposed fines on various banks – including Popular for €5.8 million and BBVA for €1.6 million – for not putting empty subsidised (VPO) homes at the disposal of the municipal registries for claimants.

Encroachment of competencies

Alongside this ruling, the HC considers that the regional legislation deals with the state duties provided for by the Constitution, such as “coordinating the planning of economic activity”, whereby nullifying the second additional provision of the decree law “aimed at ensuring the right to adequate housing”.

The ruling also explains that “it constitutes a significant obstacle for the effectiveness of the measures taken by the central Government”, which issued legislation that provided for the possibility of suspending the introduction and promoting the creation of a social fund containing the properties owned by the entities to facilitate their lease to evicted persons.

In this sense, it is worth noting the agreement of disparate legal figures regarding the same reality – the suspension of the introduction of state legislation and the expropriation of the use under the regional legislation – “makes the joint application difficult”.

The HC also advises all of the regions that the State should determine “the extent of the public intervention” and indicate “certain guidelines in the mortgage market”, and should do so in such a way that “it is compatible with the proper functioning of that sector”.

As a result, this “prevents” the regions from “adopting provisions that affect this market in a more intense way”.

Original story: Expansión (by Lidia Velasco)

Translation: Carmel Drake