Tag: subsidised homes

What Impact Will the Housing Plan Have on Construction?

25 March 2018

For the first time, Spain’s Housing Plan may create incentives for private housing developments. Specifically, the Spanish government included subsidies of up to 36,750 euros per home that developers build for the residential long-term rental market in the program.

The government intends to boost the stock of residential housing in Spain, at a time when growing demand and the shortage of new housing are pushing prices up in some cities. Developers are cheering the measure, but question whether it will have a significant impact on the market.

Alberto Delgado, director of operations at Aedas Homes, noted that it is “vital to shorten the deadlines for the processing of the different licenses involved in the construction of homes and the creation of building-ready land.” In his opinion, “the delays in licensing and the shortage of building-ready land are two of the big obstacles that builders face. In a recent statement to the CNMV, the developer, which will sell 2,000 homes this year, said it took an average of six months for a construction license to be granted. In regions such as the Costa del Sol, this period can last up to eight months.

Increased costs

Neinor Homes took a similar position, stating that the measures included in the Housing Plan are unlikely “to affect the sector.” “Public subsidies can be an additional supplement, but housing sales can only fully recover if employment continues to grow and young people have the purchasing power to buy their first home,” the developer explained.

Metrovacesa affirmed that the “measure is positive”, but that there is a “need” to put “new homes that respond to the demands of citizens” on the market. Referring to the Housing Plan, the company controlled by Banco Santander and BBVA explained that “it is still early to determine its impact, although these measures always help to boost the market.”

All three companies agree that the stock of homes that the market currently has on offer is “insufficient” in certain regions. Last year some 80,000 new construction permits were granted, a figure notably lower than the 150,000 that analysts believe the market requires to respond to the overall demand.

“It’s not easy, construction costs have grown 10% in the last year. There exists a lack of contractors and labour. We have few crews, and it is not easy to train new professionals,” a real estate consultancy stated.

Original Story: ABC – G. Ginés

Translation: Richard Turner

Sevilla: Town Hall Unblocks Land for 3,000 Homes

16 February 2018 – Eje Prime

Sevilla is creating land for new homes. Last Thursday, the board of the Urban Planning Department at the Town Hall of Sevilla unblocked urban development projects that will allow the construction of 3,000 homes.

According to ABC, the three areas of the city where these projects are located include: the plot of the former Cruzcampo and Abengoa factory in Nervión (land owned by Heineken); the plot of the former glass factory in Miraflores; and several unused plots on Avenida de las Ciencias in Sevilla Este.

According to the forecasts set out by the Town Hall, work may start on the first developments at the beginning of 2019. The main plot corresponds to the former Heineken site where 1,900 homes are going to be built (800 of which are going to be subsidised properties).

Original story: Eje Prime

Translation: Carmel Drake

AVRA Sold 21,000 m2 of Land for Social Housing in Córdoba in 2017

31 January 2018 – 20 Minutos

That is according to a statement by the Ministry of Development and Housing, which noted that four operations were closed in total for around €6 million. Most of the land sold by the Ministry in the province of Córdoba was assigned for residential use, for the development of homes for social housing purposes, up to a total of 21,258 m2 with capacity for the construction of almost 400 VPO homes in the capital’s expansion area of Huerta Santa Isabel.

The plots were awarded to the municipal housing company, Vimcorsa, which will undertake the upcoming construction of almost 300 subsidised homes, which will be added to another 78 units that the regional Administration is also planning to build in this enclave.

Moreover, plots with a total surface area of 688 m2 were awarded in the municipality of Obejo, for the construction of six private market homes, for €68,923.

Most of the plots sold were owned by the Agency for Housing and Rehabilitation in Andalucía (AVRA), which took the decision at the start of this legislature to focus again on selling land as one of its strategic lines. It had slowed down that activity in previous years, during the most critical period of the crisis, according to the regional delegate from the Ministry of Housing and Development, Josefina Vioque.

The delegate indicated that “the drive to manage the properties owned by AVRA has become a priority. The objective is to put these assets on the market to serve business initiatives that promote economic development and the generation of employment in the construction sector, one of the hardest hit during the crisis”.

Vioque expressed that “the decision to recover this activity, involving the sale of regional land, was taken in light of the fact that the market was starting to show signs of recovery in terms of real estate activity. The main objective is to generate revenues to allow us to resume other activities, such as the construction of social housing for families with housing needs and scarce or zero possibilities of affording a home in the private market, like the ones we are now promoting in Córdoba”.

The VPO activities that are going to be promoted, in addition to the developments in Córdoba, will be located in Cádiz and Málaga, where the Ministry is already working to draft the technical plans, whilst the process to obtain the necessary financing to undertake these activities is being finalised.

The land sale activity resumed by AVRA since the beginning of this legislature has resulted in the award of almost 300,000 m2 of land, of different types, at the regional level, for a total amount of €50.7 million, over the last three years.

The sum of the industrial land sold during this period, 183,055 m2, once again places that use as the one that generates the best results in terms of awarded surface area. Residential land awarded over the last three years spans almost 110,000 m2. Those plots have the capacity for the construction of 1,476 homes, of which 891 will be subsidised housing and the remaining 585 will be private homes.

Original story: 20 Minutos

Translation: Carmel Drake

Work Begins on the First 142 Homes in Hacienda del Rosario (Sevilla)

8 January 2018 – Emvisesa

Today, the mayor of Sevilla, Juan Espadas, together with the representative for Urban Habitats, Culture and Tourism, Antonio Muñoz, the representative for the Este-Alcosa-Torreblanca District, Adela Castaño and the manager of Emvisesa, Felipe Castro, have visited the new housing development in Jardines de Hacienda del Rosario (Sevilla), where the first 142 homes are now being built on a site where more than 2,000 new homes are planned. In total, the urban development planned in the PGOU affects more than 460,000 m2 of space including residential land, open spaces, green areas and other facilities.

“This development shows that the large projects planned in the PGOU are being unblocked and that the housing sector is reactivating, which should contribute to the city through new developments and renovations to generate opportunities, especially for young people, to reduce unemployment and to increase the population registered in Sevilla. It must always be done in a sustainable and balanced way”, said the mayor of Sevilla, who highlighted that the model also includes a mix of private and subsidised homes, like in the case of Hacienda del Rosario. Of the 2,000 homes planned there, 824 will be social housing properties.

The urban development has been initiated by Aedas Homes, with the first of seven private residential buildings, inside a residential complex with more than 33,000 m2 of open space, including garden areas, a social club and children’s play areas. In total, 142 of the 1,000 homes planned are being constructed and the idea is that these first properties will be handed over at the beginning of 2019.

This same urban development is one of those included in the strategy to urgently expand the public stock of homes designed by Emvisesa with the aim of building 1,000 social housing properties over the next few years. To this end, the paperwork has been started by the Urban Planning Department to grant Evisesa the first plot in Hacienda del Rosario so that it can build 218 subsidised homes there on the plot measuring 9,044 m2.

Juan Espadas has confirmed that Emvisesa’s Board of Directors has already given the green light to the provision by the Urban Planning Department of a plot for the construction of a first set of 218 homes at affordable prices, to be constructed and promoted by Emvisesa. Therefore, there will be a harmonious development of affordable and private housing, like has been seen in other neighbourhoods in the city.

“Many projects are being unblocked, which reflects the economic reactivation that is being achieved in the city”, explains the mayor of Sevilla. In fact, the volume of building permits granted in 2017 exceeded €230 million, almost double the volume granted in the previous year. Moreover, more than 1,000 housing licences were granted, equivalent to the sum of all of those granted in the years 2011, 2012, 2013 and 2014.

In this sense, the mayor highlighted the importance of the definitive approval at the recent Plenary of the modification to the Ordinance Regulating Construction Work and Activity (OROA) issued by the Town Hall of Sevilla to streamline the procedures and facilitate the opening of new projects in the city, as well as the process that is entering its final phase to unify the services of Urban Planning and the Environment.

Original story: Emvisesa

Translation: Carmel Drake

Ciudadanos Blocks the PP’s House Building Plans for Alcobendas

24 November 2017 – El Confidencial

Ciudadanos has decided to block one of the most important urban planning operations left to be developed in the Community of Madrid, specifically, in the town of Alcobendas (114,000 residents). On Friday, the PP, which has a minority government, submitted a new attempt to the Urban Planning committee to approve the partial plan for Los Carriles, a new neighbourhood where the plan is to build 8,600 homes. The PP, with 12 councillors, who have been trying to get this project off the ground for years, do not have support from the majority opposition parties – PSOE, IU, UPYD and Sí se Puede—, which comprise another 12 councillors.

The decision lies in the hands of Ciudadanos (three councillors). Previously, those party members supported the PP’s plans (…) but they decided to vote against the project in the meeting on Friday and will do so again in the plenary session on Tuesday. (…). This new block puts in limbo the development of 2,172,909 m2 of land (5% of the surface area of Alcobendas) and business of around €2 billion.

The owners of the affected land include the town hall, the Archdiocese of Madrid and several landowners from the municipality, such as the Serrano Alberca family and the company San José del Taller de Nazaret, which owns 320,691 m2 of land, making it the largest individual landowner in this sought-after development.

A lot of money and a lot of interests have been buried in Los Carriles for 14 years now, waiting for the various political parties to reach an agreement. The initial idea for this development arose under the Socialist Government of José Caballero, who, in 2003, backed by the IU, started the first version of the project, which included 14,000 homes, 50% of which were due to be social housing properties. Nevertheless, that project never received the blessing of the regional Government, led at the time by Esperanza Aguirre.

Four years later, the PP took over the town hall once again and started a new plan, but with 40% fewer homes (8,600 in total). (…). But, even though the PP had an absolute majority in Alcobendas and in the Community of Madrid for many years, the project never ended up being finalised. (…) until September 2016 when the PP found an unexpected ally, the only councillor from Izquierda Unida.

The plenary for this month was called to approve the partial plan, which increased the number of social housing properties to 3,870. But the Madrilenian management of the IU did not support its councillor and he had to back down in the end. It was then that Ciudadanos called the project an “urban planning outrage”. “We do not support it. There is no sufficient demand for 9,000 homes. We do not want to build up Alcobendas to the hilt” (…).

In the face of the block, the PP decided to create a working group to try to reach an agreement, focusing in particular on Ciudadanos, its investiture partner.

In the end, after much too-ing and fro-ing, the agreement was signed between Ciudadanos and PP (…). The PP says that it has started to fulfil the agreement (…) but Ciudadanos does not see it like that (…) and has accused the PP of cheating them. “The matter has reached the Assembly of Madrid this week and, there, the Director General of Urban Planning in the Community of Madrid has explained that the partial plan does not comply with the law (…).

As a result, Los Carriles is going to continue in a dry ditch. Moreover, Sí se Puede and environmental groups say that the planned development is going to harm the ecosystem in Valdelatas, where there are a lot of oak trees and a sizeable population of wild boars. The project includes plans to build 800 luxury homes next to the regional park, a protected space. Without forgetting that the plan’s mobility study reveals that the new neighbourhood will add 156,932 daily journeys to the municipality, of which more than 95,000 would be in private vehicles. That would collapse the area even further (the exit to the north of Madrid from the A-1) which already suffers from serious traffic problems.

Original story: El Confidencial (by David Fernández and Ruth Ugalde)

Translation: Carmel Drake

Social Housing Tenants Can No Longer Buy Their Homes In Madrid

22 June 2017 – El Confidencial

The Community of Madrid will abolish the framework that allows tenants of social housing properties to be granted an option to buy their homes. In other words, those who wish to access a subsidised home may now only do so on a rental basis or as owners, but they may not rent and then subsequently purchase the home that they have lived in as tenants, in a change to the legislation applicable until now. That is according to the draft bill that will be presented today in the plenary session of the Assembly of Madrid and which will grant tenants greater guarantees in the event that their homes are transferred or sold to a third party.

According to José María García Gómez, Director General of Housing and Renovations at the Community of Madrid, this decision is motivated by “the change in the cycle that the housing market in Spain has experienced, which means that in some areas of Madrid, the price of private housing is less than the price of social housing. Nowadays, this option is not as attractive, it is a system that has been made obsolete and which goes against the real estate cycle, hence the decision to eliminate it”, he added.

In fact, according to data from the Community of Madrid, “only 10%-15% of those who choose to rent with the option to buy end up exercising that right. In some cases, this happens because the tenants are unable to obtain financing, but in other cases, it is because they prefer to continue to rent”, he said. “The majority are renewing their rental contracts, whilst others have left their homes”.

According to sources at the Community of Madrid, the new measure will enter into force once it has been published in the Community of Madrid’s Official Gazette – the plenary session will be held today, where the measure is expected to be approved – but the same sources clarify that it will not affect those developments or plots of land that have already been granted that classification.

No more sales of subsidised homes to vulture funds

The new rules will also include two changes that are intended to protect tenants. To understand them, it is necessary to explain that although some subsidised homes are owned by the town halls and regional governments, others are owned privately (…).

When homes are owned by the Community of Madrid, they may not be sold to third parties other than the tenants or their successors. However, according to José María García Gómez, “the intention of the government led by Cristina Cifuentes (pictured above) is that not a single social housing property be sold. Nevertheless, in the event that a decision is taken to sell, then the tenants would have the right of first refusal. In other words, they would have preference over any other buyer”, he explained. “The idea is to avoid selling off public assets”.

By contrast, in the case of homes that have been constructed by private developers, the new law establishes a preferential acquisition right for legal entities with “a recognised commitment to the management of subsidised housing for social purposes, with the obligation for the new owner to abide by the conditions, terms and maximum rents established, subrogating the rights and obligations (…)”.

These measures will prevent these subsidised homes from ending up in the hands of the so-called “vulture funds”, for example, like has happened in the past (…).

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Town Planning Paralysis In Madrid: 60,000 New Homes On Hold

2 February 2017 – El Economista

Paralysis is the word that best defines town planning in Madrid at the moment. And, the people who are ultimately paying the price for these stoppages in the capital are its citizens. The shortage of supply is pushing up land prices, which is, in turn, driving up house prices, forcing many families out of the city centre.

That is the scenario that Madrid is currently facing.  Construction of more than 60,000 homes has been suspended, in the north and south of the city alike, projects as iconic as Operación Chamartín with 17,000 homes, Valdebebas with 1,000 homes, Residencial Metropolitan with 400 homes, Berrocales with 22,000 homes and Operación Campamento with 11,000 homes, are being affected. And these are just a few of the most high profile examples that are still waiting to receive the green light from the Town Hall of Madrid.

The paralysis of these projects has created a lack of supply in terms of housing, which is forcing people to move to towns on the outskirts of Madrid. For example, in the north of the capital, buyers are moving towards Alcobendas and San Sebastián, and in the south they are moving towards Rivas. “These towns are aware of the significant demand that they are generating and in the end, that is causing prices there to rise. In fact, the supply has almost run out in Rivas”, explains Ignacio Ortiz de Andrés, analyst at Foro Consultores.

According to the politician Bosco Labrado, spokesman for the Ciudadanos Party and President of the Committee for Town Planning at the Town Hall of Madrid, “in order to resolve town planning in Madrid, we at Ciudadanos propose obtaining consensus between all of the political forces and agents that participate in town planning – we demand greater legal certainty, updates and modifications to the General Town Plan – which is the tool that we use nowadays, but which is out of date – and finally, support for more public-private collaborations, which have already worked well, such as the renovation of the Beurko neighbourhood in Vizcaya, and efforts to try and strengthen them”.

Affordable (subsidised) housing is particularly scarce. If we look at the south of Madrid, demand has been forced out to towns on the outskirts due to the lack of supply. “If someone is looking for a subsidised homes for between €160,000 and €200,000 with three bedrooms, there is currently nothing available in Madrid. In the south, all construction work at Los Berrocales, where most of the land is owned by the Town Hall, has been suspended and demand has moved to Rivas”, said Juan José Perucho, CEO at the Ibosa Group.

And Los Berrocales is not the only area where work has been suspended. The situation is the same with Operación Campamento, owned by the Ministry of Defence (…). In short, in both the north and south of Madrid, the Town Hall has put the brakes on and Madrid’s housing supply is becoming increasingly limited.

Original story: El Economista (by Luzmelia Torres)

Translation: Carmel Drake

INE: House Sales Rose By 17.3% YoY In Nov 2016

16 January 2017 – El Economista

House sales rose by 17.3% in November 2016 compared to the same month in 2015, to reach 33,806 operations, according to data published on Thursday by Spain’s National Institute for Statistics (INE).

This increase, which represents the tenth month of consecutive YoY increases, exceeds the rise recorded in October 2016, when those operations rose by 6.5% YoY.

Transactions involving second-hand homes rose by 19.8% with respect to November 2015, to reach 27,996 operations, whilst sales of new homes rose by 6.8% YoY to reach 5,810 transactions.

90.3% of the homes sold during the eleventh month of the year were unsubsidised and 9.7% were protected (unsubsidised). Sales of unsubsidised homes rose by 17.4% YoY in November, to reach 30,514 transactions, meanwhile operations involving protected (subsidised) homes increased by 16.5% to 3,292 transactions.

During the first eleven months of 2016, house sales recorded a cumulative increase of 14.2% compared with the same period in 2015, thanks to an increase of 18.5% in terms of second-hand house sales, whereas new build house sales declined by 1.4%.

In monthly terms (November 2016 compared with October 2015), house sales rose by 15.1%, their highest MoM increase in more than five years.

Andalucía leads the house sales ranking

In November 2016, the highest number of house sales per 100,000 inhabitants was recorded in the Balearic Islands (138), the Community of Valencia (133) and Andalucía and the Canary Islands (99 in both cases).

Andalucía was the region that saw the most absolute house sales during the eleventh month of the year, with 6,541 sales, followed by Cataluña (5,476), the Community of Valencia (5,216) and Madrid (4,563).

The autonomous regions that saw the lowest absolute number of house sales were La Rioja (233), Navarra (363) and Cantabria (440).

In relative terms, the regions that saw the highest YoY variations in the number of house sales were the Balearic Islands (+32.8%), the Canary Islands (+26.3%) and Aragón (+25.8%). YoY increases were recorded in every single autonomous region.

Increase in the total number of properties sold

If we look at rural and urban (homes plus other properties of an urban nature) properties, then property sales in November amounted to 143,470 in total, up by 6.8% compared to the same month in 2015, to reach the highest absolute figure since June. (…).

In November 2016, the highest number of property sales registered per 100,000 inhabitants was recorded in Aragón (628), Castilla y León (604) and La Rioja (577).

Original story: El Economista

Translation: Carmel Drake

INE: House Sales In Balearics Rose By 32.8% In Nov 2016

16 January 2017 – Diario de Ibiza

House sales rose by 32.8% YoY in November in the Balearic Islands, as 1,258 operations were closed, representing the highest increase of all of the autonomous regions.

Of the homes sold, 1,234 were unsubsidised and 24 were protected (subsidised); meanwhile, 232 were new homes, compared with 1,026 second hand, according to data published on Thursday by Spain’s National Institute of Statistics (INE).

The total number of properties sold on the islands in November 2016 amounted to 4,208, up by 2.9% compared to the same month a year earlier.

Overall in Spain, house sales rose by 17.3% in November with respect to the same month in 2015, with 33,806 operations recorded in the property registries, to complete ten consecutive months of increases.

According to the data from INE, house sales grew by 15.1% between October and November 2016.

This monthly rate is 10.6 basis points higher than that registered during the same period a year ago, when the increase amounted to 4.5%, and is the highest monthly variation since 2012.

Second-hand homes

The increase in sales in November was due yet again to the second-hand market, which increased by 19.8% to reach 27,996 transactions, whereby accounting for 82.8% of the house sales registered.

The number of operations involving new homes also rose although to a lesser extent, by 6.8%. 90.3% of all homes sold were unsubsidised compared with just 9.7% that were protected (subsidised).

By autonomous region, the sale of homes grew by 32.8% YoY in the Balearic Islands; by 26.3% in the Canary Islands; and by 25.8% in Aragón, which saw the highest increases. By contrast, La Rioja, País Vasco and Galicia recorded the lowest increases.

In total, the number of properties (rural and urban) registered as sold in the property registries during the month of November stood at 143,470, up by 6.8% compared to the same month in 2015.

In the case of property sales recorded, the increase amounted to 15.6%.

Original story: Diario de Ibiza

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