Barcelona Fines Two Funds €2.8M for Leaving 24 Flats Empty

4 March 2019 – Eje Prime

The mayor of Barcelona, Ada Colau, has fined two investment funds €2.8 million for leaving two properties empty for more than six years on Calle de Aragó and Calle Pau Claris, in the Eixample district. The fine has been issued under the Right to Housing Act from 2007, which establishes penalties for the poor use of homes that have a social function and which ought to be inhabited.

If a property remains vacant for more than two years, its owner may be fined by between €90,000 and €900,000 per home. In total, the buildings subject to these fines comprise 24 homes.

Colau defended her housing policy and pointed out that the fines form part of a comprehensive approach by her government that includes the construction of 70 new developments, the requirement for private developers to build 30% social housing and conditioning any help for renovations on maintaining rental prices.

The fines could be reduced if the owners agree to let the Town Hall include the flats in their social housing stock.

Original story: Eje Prime

Summary/Translation: Carmel Drake

Spain’s Banks Estimate That 70,000 Homes Are Illegally Occupied

30 April 2017 – Expansión

Significant impact in Madrid and Barcelona / Almost 80% of Spain’s illegally occupied homes are owned by financial institutions.

The illegal occupancy of homes has become a significant problem for a large part of the financial sector in Spain. Years of economic crisis and unprecedented levels of unemployment and a still cautious recovery (with no obvious changes in access to housing) are some of the causes that explain the high levels of misappropriation recorded by the Spanish banks with respect to their housing stock.

According to data from the sector, currently, between 85,000 and 90,000 homes in Spain are illegally occupied. Of those, around 80% (and maybe more) belong to financial institutions. In other words, at least 70,000 properties of the stock controlled by the banks (and related companies such as Sareb) are inhabited illegally.

One of the entities most affected by illegal occupation is Bankia. Although the bank, which is controlled by the Frob, transferred the majority of its real estate assets to Sareb, it still has almost 5,000 homes with tenants in an illegal situation. Meanwhile, Banco Popular has 1,635 such homes. Other large financial institutions have chosen to not disclose individual figures, but they acknowledge that this phenomenon is representing a growing management problem.

The volumes are substantially lower for the smaller entities. In this way, Ibercaja reports 390 properties with illegal tenants. Kutxabank, meanwhile, states that its stock of illegally occupied homes amounts to 300 units, according to its most recent figures.

All of the sources consulted in the sector indicate that the highest volumes of illegal occupancies are recorded in Madrid and Barcelona. Spokespeople for the entities talk about misappropriation percentages that are proportionally higher in those two capital cities, not only due to the impact of Spanish legislation, which they consider to be “very rights-based (sympathetic towards tenants)”, but also because of the greater permissiveness of the authorities there.

According to various sources in the sector, this permissiveness is so great that, together with the phenomenon of occupations by vulnerable groups, the number of misappropriations by problem groups has soared. The groups “back this route to obtain access to housing”, because they are protected by what the banks consider to be a “right to occupy”, and are incited by social players such as the anti-eviction citizen platforms and those affected by mortgages.

There is a certain amount of conflict between the financial institutions and the administrations regarding how to consider certain occupancies. The entities themselves calculate that only between 35% and 50% of illegal tenants are vulnerable, whilst the Town Hall of Barcelona for example, estimates that the percentage exceeds 95%. Meanwhile, the Town Hall led by Ada Colau limits the percentage of “problematic occupancies” to 4.5%, whilst the Town Hall of Madrid increases that figure to 13.1%. These misappropriations have a significant impact on the value of the asset, with entities being forced to apply discounts of up to 52% on prices in order to place them.

Original story: Expansión (by Nicolás M. Sarriés)

Translation: Carmel Drake

Carmena To Construct 4,000 Social Homes By End Of Term

19 April 2016 – 20 Minutos

After the Europa Press Breakfast on Monday, the mayoress of Madrid, Manuela Carmena, announced that the Town Hall has set itself the objective of ending its term with 4,000 social homes, as part of its efforts to alleviate “the humanitarian disaster resulting from mortgages foreclosures”. She argues that in a society with the level of wealth and development such as ours, it should be possible to achieve the objective of “ensuring a home for everyone that needs one”.

Carmena revealed the preliminary details of her social housing construction plan, which will be formally announced “in September or earlier” because she considers that it is “quite embarrassing” to talk to the mayors of Paris and New York and tell them how “little social housing the Town Hall of Madrid has to offer”. Especially given that the Municipal Home and Land Company (EMVS) has 6,000 applicants at the moment.

One of the options proposed by Carmena involves “increasing the buildability” of renovation projects. To that she adds the possibility of the banks allowing some of their foreclosed homes to be rented out, as well as the option of building on land that the Town Hall has available. The Town Hall is also exploring ways of providing more security to owners who grant their properties for social use.

The option of offering a “zero rent” arrangement is also being considered for cases of “absolute emergency” and Carmena announced the new configuration of the Mortgage Mediation Office, which will provide support and advice to affected citizens from 1 September. (…).

Original story: 20 Minutos

Translation: Carmel Drake