Congress Approves the New Rental Act

3 April 2019 – Eje Prime

On Wednesday, Congress approved the decree law containing the latest measures to regulate the rental market. The PSOE, Unidos Podemos, Esquerra Republicana, PDeCat, PNV, Compromís and EH-Bildu all voted in favour of the law; the PP and Ciudadanos voted against it; and the UPN abstained.

The decree containing the urgent rental measures entered into force on 6 March after being approved by the Council of Ministers. The law limits increases in rental prices to the rise in the Consumer Price Index (CPI) and extends the duration of contracts from three to five years, amongst other measures.

The bill also grants town halls and autonomous communities the power to decide their own housing policies in accordance with their respective fiscal frameworks.

Original story: Eje Prime 

Translation/Summary: Carmel Drake

Social Housing is in Very Short Supply in Málaga

17 March 2019 – Diario Sur

Social housing is in very short supply in Málaga. More than 27,000 families are registered on the waiting list for VPO properties, to purchase or rent, of whom 18,723 have been waiting for at least five years. 4,768 new families were added to the register last year alone. But only two out of every 100 families ever receive the good news that they have been selected to be awarded a home. Over the last few years, just 345 homes have been handed over.

Why are VPO homes not being constructed? There are several reasons, but one of the main ones is the lack of funding from the State and the Junta de Andalucía for public and private property developers. The most recent housing plans have focused on subsidising rental payments and undertaking renovation work rather than on the construction of new homes.

The Town Hall of Málaga has projects in the pipeline for the construction of 1,001 public housing units on land to the west of the extension of the Teatinos campus. The European Investment Bank (EIB) is willing to finance half of those homes, worth around €120 million, but the cost of that loan alone would have to be passed on to tenants in the form of rentals of €255 per month, which when combined with the cost of the financing the remaining 50% would not be affordable. Seven out of ten people waiting for a VPO home for rent earn less than €537 per month.

77% of applicants for a VPO home would prefer to rent, given that the option of buying is becoming increasingly less affordable. 72% of the applicants are aged under 35 years old. Public housing policies all but disappeared during the crisis and rents have risen significantly since then, hence the rise in the number of applicants on the register. In fact, the real demand for VPO homes is much higher as many families do not even bother to register given the limited chances they have of being awarded a property.

Across the province, according to data from the local council, 8,457 people are registered on the waiting list for a VPO home, with 1,613 in Torremolinos, 1,365 in Marbella and 1,359 in Estepona. Nevertheless, just 247 families have been awarded a home in any of the Málagan municipalities over the last seven years.

Original story: Diario Sur (by Jesús Hinojosa)

Translation/Summary: 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

Landlords Demand Revival Of Express Evictions For Rental Homes

6 December 2016 – Cinco Días

The u-turn made by Mariano Rajoy’s first Government regarding housing policy was accompanied by several draft legislative changes. In this way, in 2012 the Ministry of Development decided to stop financing the construction of subsidised homes (VPO) for ownership, to focus instead on boosting the rental sector (Spain is one of the countries with the lowest percentage of households living in rental properties in Europe) and the renovation of homes.

To this end, in 2013, it undertook a comprehensive reform of the Urban Leasing Law (LAU), which provided for the speeding up of the periods for processing evictions, amongst other things, with the aim of making it possible for owners to recover their homes sooner once judges order tenants to leave properties due to non-payment.

Nevertheless, in the opinion of some operators in the sector, the results, more than three years later, are quite disappointing given that the processes that culminate in the eviction of delinquent tenants are still taking between eight and nine months on average. That is now the main concern for many landlords.

“In a market in which demand clearly exceeds supply, the most urgent thing is to provide more legal security for the owners of homes that are susceptible to being rented out and to implement new incentives that favour both landlords and tenants who fulfil all their obligations”, said David Caraballa, Commercial Director at the brokerage company Alquiler Seguro.

In this sense, that company is demanding three specific measures: the approval of new incentives for leasing in the form of IPRF exemptions; the regulation of tourist rentals; and the creation of specific courts to handle cases involving non-payments and evictions.

In the case of tax incentives, Alquiler Seguro explains that during the last legislature, not only were incentives increased to encourage more owners to lease their properties, but also the fiscal pressures that they have to bear have increased, given that some of the benefits that they used to enjoy (such as from leasing homes to people younger than 35 years old) have disappeared. In this regard, they consider that it is very important that these exemptions be recovered and that progress be made in this vein so that leasing a home is attractive from a tax point of view, like acquiring a property used to be.

The second aspect that requires urgent reform, in Alquiler Seguro’s opinion, is the tourist rental sector. “There is a legal vacuum and a disparity in the rules between those autonomous regions that have decided to introduce regulations, which means that we have clients who admit that it is more profitable for them to rent their properties to tourists than as regular homes”, explained Caraballo. In this sense, the firm is in favour of emulating actions such as the one carried out in New York, where the minimum period for renting a tourist flat has now been set at one month.

In terms of the third aspect, Sergio Lusilla, Managing Partner at Pluslegal Abogados, says that although the timeframes for resolving evictions have been reduced (before the reform of the LAU such cases could take more than two years), the current average of 8-9 months could be reduced to just three with an increase in human resources dedicated to the activity.

“I think that a term of three months would be reasonable for both parties. On the one hand, the owner would recover his home without having to wait as long to put it up for rent again, and, on the other hand, it would give social services sufficient time to analyse the case of the tenant who is unable to pay the rent and take a decision in that regard”, said Lusilla.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake