Ministry of Development Invests €870M In Housing Plan For 2017

23 November 2016 – Expansión

Yesterday, the Minister for Development, Íñigo de la Serna, announced in the Senate that the State Plan for Housing and Refurbishment 2013-2016, which is due to expire at the end of this year, will be extended for another year. The Government is finalising a Royal Decree to avoid “the subsidies for housing being suspended from 1 January”, said De la Serna. Thanks to this extension, which the Council of Ministers will approve over the coming weeks, the number of families receiving subsidies of up to €200 to pay their rent will increase to 100,000.

The ministry was unable to provide details about how many recipients currently benefit from the Plan, but the initial objective was to cover the needs of 200,000 families. So far, it has not managed to help even half that number, but that is the aim for next year.

The commitment to subsidise rental payments instead of awarding social housing was very well received by all social agents, as well as by the opposition party. Through the State Plan, the Ministry of Development pays for between 33% and 40% of the monthly rent of households with incomes of less than €22,365 per annum who rent homes for less than €600/month.

During the Government control session in the Senate, the Minister revealed that this one-year extension will allow the Ministry of Development to allocate more than €321 million to rental and refurbishment projects in 2017. Moreover, almost €90 million will be contributed by the regional governments in the form of co-financing and €458 million will be provided through induced private investment, taking the total investment to almost €870 million.

“The extension of the term will not only help lots of families pay their rent, but also will continue to incentivise participation in the private sector and create business opportunities, which will result in the generation of employment and, therefore, also in new resources for the State”, said the Minister. In fact, next year, “35,000 homes will be refurbished or renovated”, which will create 13,000 jobs, said De la Serna.

In parallel, more than 70,000 families will continue to receive help with their mortgage payments to acquire social housing properties in 2017. Another €150 million will be allocated to that cause.

The Minister also announced that the Sectoral Housing Conference will be convened on 15 December with all of the autonomous communities, to start to prepare a State Plan for the period 2018-2021. De la Serna said that this will be “the fruit of consensus and dialogue” not only with the autonomous governments, but also with agents, associations and other players in the sector. (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Constitutional Court Temporarily Supends Basque Housing Law

18 April 2016 – Cinco Días

The Constitutional Court (TC) has admitted the appeal filed by the central Government against the Basque Housing Law, which provides for the temporary expropriation of homes by banks, amongst other measures, and has suspended it as a precautionary measure whilst it decides whether or not it complies with the Constitution.

The Government filed an appeal of unconstitutionality against the Basque Housing Law, which, in addition to the aforementioned measure, makes provisions for other initiatives, such as the imposition of a fee on empty homes and the recognition of the subjective right to a home, which will be enforceable in court.

The Basque Parliament approved the Housing Law in June 2015, following lobbying by PSE and with the support of EH Bildu and UPyD. It was rejected by the PP and the PNV. In its appeal, Mariano Rajoy’s Government requested that the admission procedure for the law be temporarily suspended until the substance of the matter has been resolved, as it is allowed to do under the Organic Law of the TC.

The court of guarantees issued a ruling in which it declared the appeal admissible and suspended the law, which does not determine the final outcome, but rather grants a period of five months, which may be renewed, during which time the aforementioned law will not apply and a decision can be taken regarding its future.

In its acceptance and suspension ruling, the TC announced that it will transfer the file “to the Congress of Representatives and the Senate, through their respective Presidents, as well as the Basque Government and Basque Parliament, through their respective Presidents, so that they can make an appearance and formulate the allegations that they deem appropriate, within a period of fifteen days.

Original story: Cinco Días

Translation: Carmel Drake

Sareb Expects Its Business To Normalise By Start Of 2016

20 October 2015 – Expansión

Sareb is close to restoring the cruising speed of its business. That is what its President, Jaime Echegoyen, confirmed yesterday before the Senate’s Finance Committee: “From what we are seeing and given the pressure we are exerting to ensure that the migration of assets (to the new managers: Haya, Altamira, Servihabitat and Solvia) is completed as quickly as possible, I think that we will be back to providing a normal level of service by the first quarter of next year”.

This (migration) process caused Sareb’s turnover to drop by 10% during the first half of 2015. Echegoyen confirmed that the arrival of the new managers is already being felt in the second half of the year, despite the fact that the handover will not conclude until the beginning of 2016: “During the second half of the year, we are already in a much better position to fulfil our objectives and undertake our commercial activity than we were during the first half, and that will all be reflected in the numbers”, he said.

The transfer of assets was one of the points of interest during Echegoyen’s appearance in the Senate, together with the new accounting circular pursuant to which Sareb will have to make extraordinary provisions at the end of the year.

“In the likely event that capital requirements arise, the company has €3,600 million of convertible subordinated debt, which is more than sufficient to meet the requirements of the accounting circular”, explained Echegoyen. In response to questions from members of parliament, the President of Sareb went even further and said that “these own resources are sufficient to enable the company to fulfil its mandate and its business plan over the remainder of the entity’s twelve year life”.

Social housing

Echegoyen also used his appearance to announce that Sareb will double the number of homes available for social purposes, from 2,000 to 4,000, through the agreements it has in place with several autonomous regions and town halls, such as Madrid and Barcelona.

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Echegoyen Confirms That Sareb Will Have To Convert Debt

20 October 2015 – Expansión

The President of Sareb also announced that the entity will increase the number of social housing properties (from 2,000) to 4,000.

Yesterday, at a meeting of the Senate’s Finance Committee, the President of Sareb, Jaime Echegoyen, discussed the recent developments to affect the so-called ‘bad bank’, which announced its results for the first half of the year last Friday, reporting a reduction in losses of 23%.

Echegoyen confirmed that the application of the new accounting standards, defined by the Bank of Spain’s Circular published in September, will affect the solvency of Sareb. The new standards require Sareb to assign an individual market value to each one of the entity’s assets, with the consequent need for new provisions. However, the President confirmed that the group’s convertible subordinated debt, amounting to €3,600 million, will be more than sufficient to cover this eventual hole in its solvency.

The senior executive of Sareb also acknowledged that the hiring of third parties to manage the asset portfolio slowed down sales processes during the first half of the year, due to the complexity and length of time involved in the process to materially transfer the management of those assets. Nevertheless, he appeared confident that the cruising speed of sales will be recovered again during the second half of the year.

During the first half of the year, revenues decreased by 10%.

When questioned by several senators about the hedging swap contracted by Sareb in 2013, Echegoyen explained that this contract would mature in 2022. Until then, all profits and losses associated with it are “theoretical”, since the actual result will only be known upon maturity. Nevertheless, the banker commented that during the first half of the year, the contract generated theoretical gains of €400 million.

Social housing

Echegoyen also used his appearance to announce that Sareb has increased its stock of social housing available to autonomous regions from 2,000 to 4,000 homes. That means that the bad bank is making available an additional 2,000 homes to the regional administrations.

Currently, Sareb has collaboration agreements in place in Cataluña, Aragón, Galica, País Vasco and the Balearic Islands and is waiting to sign two more in the Canary Islands and Castilla y León. The President added that the entity is also in advanced talks with Castilla La Mancha, Valencia, Cantabria and Madrid and he announced that discussions have also begun in Andalucía, Asturias and Extremadura.

Original story: Expansión (by M.R.)

Translation: Carmel Drake