CCOO proposes creating a fund that attracts private savers, public funds or institutional investors, and co-financed by the European Investment Bank (EIB), to finance the generation of 50,000 housing units affordable rent per year.
This Thursday, the union presented its proposal to create a public investment fund for affordable housing (FIVE), which would be public management and would have 6,250 million euros annual financing.
The long-term objective of the fund is to contribute to the creation, in the next decade, of “the two million affordable public housing that our country needs”explained the general secretary of CCOO, Unai Sordoat the presentation of FIVE. This fund would finance “actors committed to the long-term management of permanent affordable housing”, with “capable and reasonable” returns.
These management entities dwelling permanent affordable entities (which can be public, social economy, non-profit or limited-profit entities) would dedicate that financing to buying already built homes and building new homes, always on public land.
The 50,000 housing affordable annual rents could have rents of between 7 and 11 euros per square meter per month, prices that, in any case, would be set with a determination system based on cost, which would allow these entities and FIVE to be viable. “The homes that are built or acquired must be classified as Permanent Protected Homes, without their subsequent disqualification,” Sordo explained.
FIVE Financing
To achieve this, the fund wants to attract the stagnant savings of families and institutional investors with a long-term investment vocation and that incorporate a social and environmental objective, as well as public, European or national funds; and have co-financing from the EIB.
Half of the financing of the fund (6,250 million euros) would come from the EIB, explained the Secretary of Public Policies of CCOO, Carlos Bravoso that FIVE would only need to mobilize 3,125 million euros annually.
In this way, the fund wants to channel the savings of small savers, remunerating them at an interest rate that would be set by the State, but which would be higher than that currently offered by financial entities and in line with the interest rates of the European Central Bank (ECB) and the Euribor.
Sordo has recalled that the Bank of Spain estimates that in 2023 the family savings kept close to 50,000 million euros of extraordinary savings, which could be directed to financing the FIVE. It would also rely on investment from employment pension funds, collective investment instruments or foundations, which have a vocation for socially responsible investment and medium and long-term investment capacity.
This investment would be channeled through the issuance of financial instruments, such as bonds, with maximum guarantee and aligned with the interest rates of the State Bonds (around 3%); while it could also receive public funds, whether European or national.
Bravo has indicated that they will soon present their proposal to the Government and that several social entities and private operators in the real estate world have already expressed their interest in participating in an initiative like this. For Sordo, this is a measure to provide short-term habitability solutionsbut it is not enough.
“To reduce the price of housing, actions must be combined: building housing, regulating prices in some situations, policies to mobilize stock and programs that limit the duration of rentals, in exchange for social and affordable prices. All at the same time and for quite some time,” he added.
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