Requests for Building Licenses for New Developments Fall by 72% in Barcelona

6 August 2019

After the regulation requiring new developers to reserve 30% of the flats in new developments above the size of 600 square meters for subsidised housing, the number of applications for building licenses for those projects fell by 72% year-on-year in Barcelona, from 234 to just 64.

When the government announced plans for the new measure, the Catalonian Association of Developers recommended that its members bring forward the submission of any potentially affected projects, likely aggravating the fall.

Original Story: Idealista

Photo: Unsplash

Adaptation/Translation: Richard D. K. Turner

Carmena’s New Housing Plan: Rezoning in Exchange for Subsidised Housing

8 February 2019

The Madrid City Council is offering to rezone an industrial plot as land to residential in exchange for “30%, 50% or 70%” use as social housing.

Madrid is now following in Ada Colau’s footsteps, asking for investments in social housing from private developers. The Madrid City Council will offer to rezone an industrial site on the condition that part of it is converted into subsidised housing (VPO). José Manuel Calvo, the Councillor for Sustainable Urban Development, announced the decision in an interview with EjePrime. The initiative is a reflection of the Madrid City Council’s desire to invest in social housing.

Since the public stock of homes began falling in 2010, the government in Madrid has been unable to return to the levels seen before the crisis. When Manuela Carmena arrived at City Hall, the municipality had less than 6,000 public housing units. The mayor committed to adding another 4,000, half of which has been achieved four months before the end of her term.

The City Council of Madrid is now offering to work with private developers to increase the public stock of housing during the next government mandate. The idea is to rezone industrial lands so that developers can build homes, a percentage of which would have to be allocated to subsidised housing.

Carmena’s government requires any plots of land for subsidised housing to be independent

“I can tell developers that I will rezone the land as residential and then ask for 30%, 50% or 70% [for subsidised housing],” says Mr Calvo. While the exact figures have yet to be determined, the City Council believes that the developers’ investments must be “profitable” while the “municipality wants to receive the greatest possible number of homes.”

Carmena also insists that any plots used for subsidised homes be independent to avoid the Ada Colau’s situation in Barcelona. Ms Colau wants to oblige developers to set aside 30% for social housing buy her “proposal has run into legal difficulties because the homes are owned ‘proindiviso’,” meaning that the City Council jointly runs the residential associations with the developers.

In such cases, “as an administration, maybe you need the housing for needy families and the community can deny it,” says Calvo. “The proposal in Barcelona does not work,” he concludes.

The councillor is suggesting an alternative to Ada Colau’s proposal

Colau’s proposal was approved in a plenary session of the Barcelona City Council last September, with favourable votes by all political parties except the Ciudadanos (Citizens) who abstained, and the PP, which voted against. According to the municipality’s forecasts, the monthly rent for social housing of about 80 square meters should be 512 euros or €136,000 to buy. Taking into account that 1,114 apartments are built each year, the City is planning on 334 new homes per year.

The City Council’s proposal was not well received by developers, who met that same week in a commission to study the measure. The Catalan Association of Developers (APCE) questioned the legality of the proposal and warned that it could mean an end to new developments.

Original Story: EjePrime – Marta Casado Pla

Translation: Richard Turner

Construction Companies Look for Land in the Canary Islands for 2,000 Subsidised Homes

3 October 2018

The Association of Construction Companies is analysing Sareb’s real estate portfolio, which includes 2,900 properties on the Islands.

The builders are looking for land in the Canary Islands to finalise a “quick and complementary” housing plan before the end of the year that benefits the most disadvantaged segments of the population. The Association of Construction Companies and Developers of the Province of Las Palmas (AECP) met yesterday with a delegation from the Bank Restructuring Asset Management Company (Sareb), Spain’s so-called bad bank, to analyse the company’s assets on the Islands and potentially acquire the land necessary to follow through on their plan.

The president of the association, María de la Salud Gil, stated that the construction of some 2,000 subsidised homes, both for sale and for rent, is the goal of the initiative. “We have decided to develop a public-private housing policy and treat housing needs from a generalised perspective, creating a housing policy capable of serving every stratum of the population in function of their profiles,” she stated. For this, the builders are negotiating with different financial entities and developers to locate plots of land and “unfinished assets.”

Ms Gil explained before the meeting that the Government of the Canary Islands has full powers and jurisdiction in housing matters. “Therefore, it can structure procedurally agile rules and eliminate all the bureaucracy surrounding the creation of subsided housing.” She also stressed that housing and developments must attend three basic parameters: price per square meter, people who may buy or rent the properties and any support received by the interested parties.

Real estate assets

Sareb, which was formed in 2012, as a result of the nationalisation of four Spanish banks, has assets in the archipelago valued at 240 million euros. The portfolio is made up of some 2,900 properties, including land and housing, representing 2.5% of the company’s holdings in the country as a whole. Sareb has one thousand homes and 300 plots of land in Las Palmas, while it has 450 houses and 130 plots of land in Santa Cruz de Tenerife. The value of Sareb’s loans, which are secured by properties, is €550 million. In the Islands, the so-called bad bank has about 1,000 financial assets, representing 2% of the company’s total.

Ms Gil also explained that the development of subsidised housing is not linked with the construction of free housing or any size of homes. “It’s not just about building subsidised housing; it’s about addressing the housing market from a universal perspective,” she said. Even so, she explained that the association is trying to convince developers not to abandon subsidised housing because she believes that it helps “structure and balance the market and rental prices.”

Despite noting that the sector is currently held back by the delay in signing the pending state agreements, the president of the AECP stated that the construction industry already has “the muscle” to address the initiative.

Original Story: La Opinión de Tenerife – A. Rodríguez

Translation: Richard Turner

Helena Beunza, General Secretary for Housing: “The Government Is Not Looking at Limiting Rental Prices”

9 August 2018

Helena Beunza has just arrived from the Valencian government to her new position as the General Secretary for Housing within the Ministry of Public Works. Like many other people who come to Madrid, she had to look for a flat. The PSOE-affiliated minister, responsible for housing policy in Spain, decided to rent.

An idealista/news exclusive interview with the new General Secretary for Housing at the Ministry of Public Works. We went deeper into the measures previously announced by the Minister José Luis Ábalos regarding rental policy, an increasingly important market for the sector and the Spanish government; the current state of Spain’s stock of housing, especially empty houses; the articulation of urban planning and the future of social housing in the country.

The current government wants to reformulate its housing policies to align them with the current state of the rental housing market. Ever more Spanish households are opting to rent, whether it is by need or conviction, and the sector requires better regulation.

The minister José Luis Ábalos already announced in the Congress of Deputies that the current government intends to upend the residential rental market with three big sets of reforms:

On the one hand, the government intends to amend the Urban Rental Act (LAU), which was signed into law in 2013 under the government of the PP. “In this amendment, we would return once again to a model of five-year contracts and three-year extensions. We would also revisit the regulations for security deposits,” Helena Beunza summarised. “On the other hand, we will establish a generalised understanding of the holiday home and tourist rental sector, so that the relevant authorities can then define the corresponding legal regimes in each Regional Community,” she said.

Action plan for 20,000 subsidised rental homes

The Minister of Development also announced the Spanish government’s initiative to allocate 20,000 subsidised homes to the rental market for young people and low-income families in those areas where the rental price has skyrocketed.

“It is a very ambitious project that not only covers legislation but the management on the part of the State at a fundamental level, in coordination with the Regional Communities and the city councils,” the general secretary noted. “Obviously, this measure alone will not solve the problem. These 20,000 homes, which will involve both new construction and renovations, are not enough, but it is a way to begin working with town councils and the CCAA (Regional Communities) for the creation of a public stock of rental housing that can be managed both publicly and through public-private partnerships,” Ms Beunza clarified.

The third group of measures that are important to highlight are the those aimed at improving the transparency of the Spanish real estate market. We know that greater access is needed, for everyone, to data and added information not just regarding the housing market, but also that for land.

Regarding taxes, we will work with the IRPF and with the IBI

To coordinate all these measures, the Ministry of Development will participate in an interministerial working group to define the legislative and tax policies that will be implemented in the housing sector. “It’s too early to talk about concrete measures. Those measures are expected to emerge from the discussions held within the interministerial working group. Regarding taxes, we will work with the IRPF and with the IBI, but the Ministry of Finance will have a leading role regarding the formulation of the tax measures that we would eventually adopt.”

Minister Ábalos stated that improvements to the tax regime associated with housing, which will go back to offering tax deductions (IRPF) and incentives to encourage property owners to place their homes on the rental market. Although it will be his colleague, María Jesús Montero, at Treasury, who will decide upon and implement any measures.

Any measures that would impact the Real Estate Tax (IBI) would have to be included in the Revised Text of the Local Authority Regulation Act, and the town councils would have to decide on their application.

The government also announced that it has ruled out any artificial limits on rental market prices. “We must differentiate between limiting rental prices from the limitation of prices that are set as a mere reference. This government has no plans to consider these issues,” says the general secretary for housing at the Ministry of Public Works.

Another one of the measures that were discarded, and the secretary states that was not even discussed, is the calculation of the IRPF (income tax for individuals) accounting for rental income.

Expand legal protections for rentals

The government does not want to limit its work to tax matters, but also intends to look at improving the legal protections within the rental sector so that the small owners can have guarantees and adequate compensation for placing their home on the rental market.

“We have to work on legal protections for both landlords and tenants, for both parties,” says Helena Beunza. “We need policies that treat housing as what it is, a fundamental right. We would have liked that the existing current speedy eviction law contained additional measures to take into account families that are occupying a home because they needed housing since we need to differentiate that occupancy from other types of occupancies.”

Secretary Beunza believes that a great deal of work will be needed to coordinate the various administrations to find a housing solution for families at risk of social exclusion. “Families need to be evaluated, and there needs to be coordination with social services so that we can help the people that want to enter the system, and who can meet the necessary conditions to sign contracts for public housing.”

From tourist rentals to empty homes

Real estate experts and regular citizens have their opinions as to the cause of the increase in rental prices. Blame is usually given to the growth in tourist apartments, the high number of empty homes and the socimis investments in the residential market. The general secretary analysed each point.

“There is a multiplicity of causes that have come together at a given moment and that have given rise to the situation in which we find ourselves now. It is too simplistic to state that tourist rentals have been the sole determinant in the increase in rents. While that could have been the primary factor in some places, but it is a very specific impact in very specific areas. The same thing holds for the increases in rental prices. We cannot speak of similar increases throughout Spain, but there have been huge variations in the increases, depending on the regions and cities involved, “the minister added.

Certain regions have already created registries of both empty homes and people seeking homes. “Yes, it is true that there are a lot of empty homes in Spain. One empty home is already too much. However, the first thing we need to understand is exactly how much empty housing there is in Spain and then we can work together with the CCAA. We need to improve data and transparency,” Ms Beunza stated.

How VPO (subsidised housing) fits into the housing stock

The Government of Pedro Sánchez has had little room for manoeuvre since taking office but has also found that many policies and items were already approved, starting with the General Budgets for 2018.

Regarding housing, the previous Minister of Public Works, Íñigo de la Serna, presented the general guidelines of the State Housing Plan for the period 2018-2021 last March. “It is not our plan, but we understood after listening to the CCAA that the priority was to sign the agreements so that the CCAA could begin to act on and process their files, mainly for calls for rental subsidies, which is he most urgent matter,” Secretary Beunza said.

The general secretary did criticise, however, is the current social housing plan (VPO), which the minister stated the PSOE would begin work on right away. “One of the issues that this Government has detected is the need to rethink the concept of official social housing. Moreover, we must take a look at all those lands which are already qualified in our country to be used in the VPO. In the current state housing plan, the word VPO does not appear.”

Land cannot again become a subject of speculation in this country

She also emphasised policies regarding land ready for development (finalist land). “We must coordinate our land policies with our housing policies because both the rental and sales markets need them to be aligned. Spain has land that is ready for development. That land is not necessarily where the developers want to build, but there is land in both Madrid and Barcelona. Another consideration is the price of that land. That is something we must consider because we can’t allow a repeat of what happened in our country before. Land cannot become a subject of speculation in this country again,” she argued.

Speaking of land, one of the biggest dilemmas facing the construction and real estate sectors also came up: the state of urban planning in Spain. “We must try to make the Spanish urban planning system more flexible and simplified. The State, although it is not directly responsible, has a clear will to define a path to accompany the CCAA (autonomous regions) in this process. We cannot take eight or 10 years to approve a general plan, simply because the economic and social reality of a particular city is not the same when a plan is approved as when it began to be written.”

The sector has been denouncing the amount of litigation in the construction industry for some time. “The problem is not just the litigation, but also but also the cascading annulments of planning instruments. It has generated a serious problem in our country since, when a general plan is annulled due to formal or material defects, the rest of the planning instruments also become null and void,” the general secretary explained.

The ministry intends to build upon the work of the previous Executive to articulate legislation that will increase legal protections and simplify urban planning.

The general secretary for housing still sees a lot of work ahead before a true state-level housing policy is defined. “There is so much to do regarding housing policies that we need to start at the beginning, and the foundations of housing policy at a state level in Spain do not yet exist,” the Secretary concluded.

Original Story: Idealista – David Marrero & Luis Manzano

Translation: Richard Turner

 

Basque Municipality Sells its First Plot for Flats in Zorrotzaurre for €6.3 Million

30 August 2018

Last week, the Bilbao City Council approved a measure to sell a plot of land to build a hundred homes.

The Governing Board of the Bilbao City Council approved last week a measure to sell its first plot of land for the development of homes, as a part of the so-called Zorrotzaurre operation. The measure specifies that the Municipality must obtain a minimum of 6.32 million euros with the objective to develop two buildings with a total of more than one hundred price-controlled homes.

Specifically, the almost 2,900-square-meter plot of land is denominated SI-1 and is located on the right bank of the Deusto canal, next to La Tomatera’s recently opened rowing pavilion.

Two buildings, totalling 10,500 square meters, will be erected on the plot of land, with two- to three-bedroom flats. Garage floors and underground storage rooms will occupy more than 5,600 square meters, and almost another thousand square meters will be allocated to commercial premises on the buildings’ ground floors. It is the first housing operation launched in Zorrotzaurre by the Bilbao City Council and serves to reinforce the construction of housing in an area of urban intervention.

It was the last plot of land that remained to be activated in the strip of riverbank that looks over the Deusto canal, located below the areas of Ibarrekolanda and Sarriko. With the decision of the Aburto team, the five plots of land defined in the reparcelling plan are already in different stages of development.

SI-2, which is located next to SI-1, is owned by Visesa, the Basque government’s development company for dependant housing. The design of the two controlled-price residential blocks has already been awarded to an architecture studio. This means that, in all probability, the buildings themselves will be built directly by the public entity itself. In this case, Visesa will opt for the same formula it used to build the Official Protected Housing (VPO) skyscrapers in Bolueta: take over the development of the buildings and sell the flats directly to the future owners.

Down the river, the other two sites, SI-3 and SI-4, are also showing heightened activity. The developer Jauregizar has been building four apartment blocks for almost a year, the first two already sold to VPO applicants who were on the Etxebide list, for a total of 99 homes. On the other hand, the 132 flats in the two adjoining buildings will be sold at a free market price. All were sold under a cooperative regime, within the ViveZorrozaurre.

Finished structures

At present, the construction company is working at a good rhythm. The structure of the four apartment blocks have been finished, and work is proceeding on the interiors. The buildings that will house the VPO have eight floors, plus the ground floor retail premises, while the free market flats have ten floors plus the ground floor premises.

The last lot of riverfront land, the one next to the Sarriko school, is also owned by Visesa and was sold last July. The publicly-owned company decided to tender the land to a private developer to build 153 market-priced homes. Visesa will obtain a good return for the SI-5 since the minimum bid for the site is 22.65 million euros.

As for the design of the buildings, although each one may be designed by different architectural studios, all the residential blocks will have to have a similar aesthetic.

The Zorrotzaurre Board had already decided more than two years ago that the entire urban intervention, both on the right bank of the Deusto canal and all the buildings that will arise on the island in the future, will again have to have a similar aesthetic.

The first element in common is the format of the building, which will be similar to a chromosome (a kind of H), which the deceased urbanist Zaha Hadid drew up in his Master Plan, in an attempt to have as many flats as possible facing the estuary. The second is that all the blocks will have a similar height, between eight and twelve floors.

Over the next five years, the new residential area on the shore of the Bilbao river will gradually grow until it covers a linear front of almost 550 meters in length, which will be the first joint settlement carried out under the Zorrotzaurre operation.

Original Story: Deia – Alberto G. Alonso

Translation: Richard Turner

 

The Sevilla City Council, through Emvisesa, Formalized the Purchase of 18 Empty, Private Houses for Social Uses at the Cost of More than One Million Euros

29 August 2018

The Municipal Housing Company of Sevilla, Emvisesa, concluded a purchase agreement for the acquisition of 18 of the homes it had been offered through its First Program for Acquisition of Empty Houses, at a total investment of 1,043,684 euros, plus adaptation works expected to cost 100,000 euros and the corresponding expenses and taxes.

“This is the fulfilment of another of this government’s commitments by which we received a good response in our quest to incorporate new flats to the housing stock to cover the social needs of the population of Sevilla, given that the existing municipal public housing is already completely occupied,” the delegate for Social Welfare and Employment, Juan Manuel Flores, explained.

After awarding more than 600 homes during the present municipal mandate, Emvisesa has allocated the totality of its housing stock. The result is a strategy of urgent expansion of the public housing stock and the new Sevilla Municipal Housing Plan (PMVS), establishing disparate intervention initiatives in the housing sector to favour access to housing by citizens and respond to different types of the population’s needs, among which is the acquisition of empty homes.

These 18 homes, located in different neighbourhoods of the city, are now added to the 63 obtained through the Ramón Carande land exchange project that have already been delivered to the City Council, as well as those achieved through the rental acquisition program and the agreements signed with banking entities. The objective is included in the Municipal Housing and Land Plan, which established financing of more than 11 million euros for the different acquisition programs by Emvisesa, the Urban Planning Management, Municipal Assets, in addition to external financing. The objective established in the PMVS, consisting of the capture of between 15 and 50 homes per year between 2018 and 2023, will be largely exceeded in 2018, as 81 empty homes have already been acquired.

Emvisesa is already finalising a new campaign to capture vacant homes that will be permanently open, in a similar way to how the Empty Housing Uptake Program (Rental) works. The operation was already approved at the last Municipal Plenary, and the bases for its approval are being finalised in the coming weeks.

These measures will allow the immediate expansion of the municipal stock of housing alongside others planned in the PMVS, such as the development of more than more than 1,000 protected homes through new construction and rehabilitation.

Original Story: Emvisesa

Translation: Richard Turner

 

Andalusia Decrees Safeguards to Prevent Sale of Protected Housing to Vulture Funds

28 August 2018

Regulatory changes were approved to reinforce the social function of the stock of public residential housing.

The Governing Council of the Regional Executive approved a decree on Tuesday amending the Regulation of Protected Housing in Andalusia, in force since 2006, to strengthen the social character of the stock of  and shield it from private capital.

The norm, called Defence Decree for Publicly-Owned Residential Housing of the Autonomous Community of Andalusia, adapts the regulations to the current state of the real estate sector and increases the guarantees that prevent the properties from ending up in the hands of vulture funds, with the consequent damage for families with limited resources.

As a spokesman of the Andalusian Regional Executive explained in a press conference, the text expressly prohibits the sale of property owned by the public administration to legal entities, thus formalising a measure that the Junta de Andalucía already applies in practice. To date, the executive has never carried out this type of operation with profit-seeking private entities.

The approved decree, which enjoyed input from social agents through the Andalusian Housing Observatory, also incorporates measures that guarantee compliance with the housing’s social function. Among them are included further specification of the people who can use protected housing and in what situations it can be accessed, setting new mechanisms to ensure that the properties remain the habitual and permanent domicile of the chosen families.

Thus, the regulation establishes that only natural persons may be awarded residency and excludes legal entities, though not non-profits, which may be the official tenants provided that the end users belong to groups with special difficulties in accessing a home.

A response to increasing prices due to tourist accommodations

On the other hand, the text broadens the powers of administrations’ rights of first refusal and withdrawal over any protected dwelling, regarding both ownership and rent. Also, with the increase in rent as a result of the interest in tourist accommodations, added guarantees were introduced to prevent that any property is used by any party other than the authorised family.

However, the protected homes may now be used to carry out any economic activity, provided that it is the habitual and permanent residence of the person who exercises it. Likewise, swaps and transfers of protected homes owned by the same developer will not be considered as assignments. Consequently, those transfers will not be subject to the municipal registry by the claimants.

Finally, the decree also modifies the regulation of these registries, in effect since 2012, to give priority in the adjudication processes to registered people promoting housing cooperatives and not, as it has been the case to date, to plaintiffs who express their interest in forming part of them.

Original Story: Eldiário.es / Europa Press

Translation: Richard Turner

 

Kutxabank Sells 18,000-Square-Meter Plot of Land in Madrid to Top Gestión Madrid

23 March 2018 – EjePrime

The company will build a development with 154 publicly protected homes on the land, located in Alcalá de Henares.

The Basque Kutxabank is selling its real estate holdings. The bank sold the 18,173-square-meter site to Top Gestión Madrid, which has already announced that it will build a development with 154 publicly protected homes (Vppl – subsidised housing) on the land, located in Alcalá de Henares.

The plot, located in ​​Espartales Norte, belonged to the Basque savings bank Kutxa, which incorporated the land into Kutxabank when the three main Basque financial institutions merged in 2012.

The apartment blocks that were designed for the development have seven floors each with penthouses and will be built following the principles of sustainable architecture. The venture is a response to the currently elevated demand for residential assets in the Henares Corridor.

For Top Gestión Madrid, a newly created company, the operation involves “continued growth, while reinforcing the geographical diversification of our portfolio of land,” its general-director, María Emilia Alarcón stated. The company’s portfolio consists of fifteen ventures in various stages of development, including completed projects, works in progress and those about to go on sale, in Madrid and Andalusia.

Original Story: EjePrime

Translation: Richard Turner

Junta de Andalucía Puts 33,000 m2 of Land Up For Sale in Córdoba

4 February 2018 – La Vanguardia

The Junta de Andalucía’s Ministry of Development and Housing has launched its first regional land sale of the year in the province of Córdoba, comprising 15 residential and industrial plots, which span 32,989 m2 in total and with an asking price of €5.8 million.

In this regard and in statements to Europa Press, the delegate for Housing and Development at the Junta in Córdoba, Josefina Vioque, said that “with this initiative, we are continuing our strategy of selling some of the land owned by the Agency for Housing and Rehabilitation in Andalucía (AVRA), which obtained such good results in 2017, with the award of almost 22,000 m2”.

The objective, according to Vioque, is “to generate revenues that allow us to strengthen the promotion of our activities of a social nature in terms of housing, especially the promotion of subsidised housing”.

This new tender for the sale of regional land includes seven plots classified as industrial and tertiary, measuring 10,871 m2, and eight units classified as residential, with capacity for 238 homes.

Of the latter, four are reserved for the construction of 188 social housing properties, on a surface area of 17,374 m2, whilst the other four, spanning 4,743 m2, have capacity for 50 private homes.

According to the delegate, the industrial plots are located in the municipalities of Adamuz, Cabra, El Carpio and Córdoba, whilst the social housing plots are located in the provincial capital and in Rute, and the private housing plots are also located in the capital and in the municipality of Obejo.

The tender, which will be open for the presentation of proposals until 1 March, and which will be resolved after the envelopes are opened, scheduled for 12 March, at AVRA’s central headquarters in Sevilla, also includes nine retail premises and 19 parking spaces in Córdoba, Lucena and Rute.

According to Vioque, “the drive to manage AVRA’s owned properties has become a priority since the start of this legislature, give our aim to put these assets on the market at the service of business initiatives, to promote economic development and the generation of employment in the construction sector, one of the hardest hit during the crisis”.

Josefina Vioque said that “with this initiative, the Junta also seeks to reactivate the construction of VPO homes, to facilitate access to housing for families in most need, since these operations are going to allow us to resume, once again, the promotion of these types of subsidised homes, which are more affordable for people with fewer resources”.

Land sold in 2017

This tender follows others carried out during 2017, which saw the award of a total surface area of 21,946 m2  and the generation of revenues amounting to €6 million (…).

Original story: La Vanguardia

Translation: Carmel Drake

Madrid’s Town Hall is Blocking 105,000 New Homes in SE of the Capital

11 December 2017 – Idealista

Madrid has the potential for a large urban development at its disposal in the form of the PAUs located in the southeast of the city, covering a surface area of almost 37 million m2 and with the capacity for the construction of up to 105,000 new homes over the next 15 years. The plans have already been sketched out, and they have been approved by the Supreme Court, but clashes between property developers/landowners and the Town Hall led by Manuela Carmena have frozen the permits and licences for completing the development of the area and, therefore, the construction of affordable new homes, which are so necessary and so sought-after in the city.

The most worrying thing is not that the future of so many thousands of homes is up in the air, but rather that they are homes that would go to middle-class families and vulnerable groups: primarily young people and people with limited purchasing power, through social housing schemes, and with prices ranging between €160,000 and €240,000. Los Berrocales, Los Ahijones, Valdecarros and Los Cerros, known in the real estate sector as land destined for the construction of the most affordable housing in Madrid, are PAUs that find themselves on this journey through a desert. And the impasse has already lasted for more than a decade.

The strategy for the southeast started to take shape with the PGOU of 1997, under the PP Government when José María Álvarez del Manzano was the mayor, with the intention of joining together all of the potential in the towns to the south of Madrid, such as Getafe, Leganés, Alcorcón and Móstoles, with the Corredor del Henares.

After completing the PAUs policy in the north of Madrid, with Sanchinarro, Montecarmelo and Las Tablas, and also the PAU of Carabanchel in the 1990s, the municipal border of Madrid was reaching its limit in terms of developable land capacity. To the north, expansion had already reached Alcobendas and San Sebastián de los Reyes; to the west, the buildable land in Madrid was already bordering on Pozuelo and Majadahonda; and in the south, the PAU of Carabanchel already reached Alcorcón and Getafe. The only free area left in the capital was to the east.

And so the initiative to develop the southeast of the capital was launched, although it has been suspended for years by the courts and has been held back by the economic crisis. But now, when the economy has started to recover and the Supreme Court has approved the project, the building work has come up against a new problem: the position of the Municipal Government.

What is the problem?

(…) The Town Hall believes that the urban development proposal for the southeast does not meet the current needs of the city. The first main stumbling block is over the number of homes to be built.

Although the Supreme Court gave the green light in September last year to the plans that involve the construction of 104,737 homes, of which approximately 53% would have some degree of protection (subsidy), as well as to the building of offices and industrial warehouses (35% of the surface area will be destined to those developments), Manuela Carmena’s team considers that the capital will not have sufficient demand to justify the construction of so many homes (…).

Specifically, the Town Hall calculates that the city will have demand for approximately 6,000 homes per year over the next few years – that figure is well below those forecast by other researchers in the market. The IESE business school, for example, estimates that the Community of Madrid will need more than 25,000 homes per year until 2025, at least (…), a figure that falls to 12,000-13,000 in the case of the capital itself (…).

Another reason that the municipal government cites against the progress of these urban developments is that the city still has a significant stock of empty homes. But, again, research and official figures exist that call into question its claims (…).

The discussions are set for the long-haul.

A 10-year paralysis that could go on for another 10 years

(…) “Regardless, if we suppose that we obtain the necessary licences and that construction starts immediately, the first homes would not be ready to be handed over until 2022-2023. If to that timeframe, we add the years needed to change the General Plan (PGOU), in the end, we are going to be talking about another decade gone to waste”, said Javier López Linares, Manager of the PAU for Los Cerros (…).

Original story: Idealista (by Ana P. Alarcos, David Marrero and Alejandro Soto)

Translation: Carmel Drake