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