“Social crisis”, “Spain’s biggest problem”, “a great emergency”. This is how sector experts refer to the problems experienced around housing and the difficulty of accessing it. A problem that, according to many reports, has its origins in the lack of social housing.
The production of protected housing (VPO) in our country plummeted after the outbreak of the bubble real estate and the subsequent financial crisisgenerating a deficit of social apartments that experts estimate at around 350,000 units.
political inaction in terms of public housing in The last ten years has led to a critical situation for the Spanish population, which faces an expensive and inaccessible housing market. In fact, according to the latest report from the Bank of Spain, “around 45% of the population that lived in rentals at market prices was at risk of poverty or social exclusion in the period 2015-2023.” “This proportion is the highest in all European economies, standing some 13 percentage points above the EU-27 average,” explains the report.
While the rental formula has been gaining ground over ownership as a way of life, with a growth of 60% in the last 16 yearsthe production of apartments for social rental has been slowed down. In fact, one of the factors that has led to Spain having one of the poorest public housing parks in Europe is the fact that in the midst of a construction boom, efforts were focused on building VPO housing for sale and not for rent, decapitalizing public assets.
In this sense, the Bank of Spain points out that “the reduced public housing stock for social rental that exists in Spain is the result of the commitment in previous decades to a housing policy focused on publicly owned subsidized housing (VPO) and the low budget allocation for social rent, both at the state level and in the Autonomous Communities”.
Thus, remember that the current deficit in social rental housing in Spain occurs despite the fact that in the past, specifically from the 1980s until the first decade of the 21st century, there was a high investment effort in public housing.
The number of protected homes qualified in the state and regional plans in the period 1990-2014 exceeded 1.3 million homes, a figure that represents 6.7% of the main homes in 2023. However, between 2015 and 2023 there was no Not even 100,000 units have been reached, according to the most recent data from the Ministry of Transport and Sustainable Mobility.
On the opposite side is the demand. The Rental Observatory estimates, based on the data provided by the autonomous communities, that Last year alone, some 375,000 social rental requests were registered.
According to the X-ray of social rental and homelessness in Spain, prepared by the Rental Observatory promoted by the Seguro Rental Foundation, the Rey Juan Carlos University and the social SOCIMI tuTECHÔ, In Spain around 432,000 homes are covered by some type of public protection figure.
“This is a completely insufficient figure. to meet the demand and needs of the entire population. “The requests to access a social rental, most of which do not even come from homeless people, completely overwhelm the resources available to public administrations,” this report states.
At the tail of Europe
The figures handled by the Bank of Spain are even more critical. Thus, he explains in his study that the increase in the supply of rental housing by individuals in the recent period has not been complemented by an increase in public investment in social rentals.
This has led to “the social rental stock in Spain being very small in the context of advanced economies, with an estimated figure in 2023 of this type of housing located around 300,000 units, which represent around 1.5% of the main homes and 1% of the total housing stock”, details.
This ratio contrasts with the relative weight of the social rental housing stock in the average of European economies or the Organization for Economic Cooperation and Development (OECD), which is, in both cases, around 7% of the stock. of housing, and reaches significant figures, for example, in France (14%), the United Kingdom (16.7%) or the Netherlands (34.1%) (OECD, 2024).
For Spain to be comparable to the average ratios of advanced economies, it would require the incorporation of a figure of around one and a half million additional homes under social rental regime.
Social vs. affordable
Beyond these social units, Spain has another need, which is affordable rent. It is common to confuse or unify these two products when they respond to different problems. The first serves a segment of the market that does not have the capacity to pay a higher rent than the 300 -350 euros per month. These are people in vulnerable situations that encompass a wide spectrum of cases.
On the other hand, it would be affordable rent that would fall within a price range higher, which depending on the market in which we speak (there is a great disparity in prices between the different populations), It is around 600-800 euros per month.
In the political environment, they have recently placed great focus on increasing the production of this type of housing through public-private collaboration agreements. Thus, the different administrations give up public land so that private investors can allocate their capital to build complete buildings of rental apartments at limited prices, generally with discounts that range between 25-35% compared to market prices. These investors will be in charge of managing the rental of these apartments for 5 or 7 decades and once that period has passed, the properties will revert back to public assets without having spent a single euro of investment.
According to experts, Spain would need almost one and a half million affordable rental homes to reduce the tension that exists in prices of rental homes on the free market. This has led to a situation of overstretching when it comes to paying rent. Thus, the Bank of Spain points out in its report that “the aggregate magnitude of renting households in a situation of overexertion also depends on the total number of renting households.”
“In Spain, the percentage of this group over the total number of households has grown largely due to the increase in the market rental regime, with overworked tenant households increasing from 3.7% of the total number of households in 2007 to an average close to 6% in the period 2015-2023. This proportion is above the average of the EU-27 economies in this period, which is 4%,” he explains.
Bet on rent
Currently, the different administrations are aware of the importance of forging a robust public rental stock and in this context, they have announced objectives and measures to modify the orientation of their housing policy and increase their investment effort to achieve a progressive increase in the public rental stock. housing for social rent. For example, The Affordable Rental Housing Plan aims to increase by 184,000 homes the public housing stock for rental in the coming years.
As explained by the Government, this objective would be achieved with 123,000 new homes in programs promoted by the Ministry of Housing and Urban Agenda (MIVAU), 50,000 mobilized by Sareb and 11,000 from the Social Rental Housing Fund.
The homes promoted by the MIVAU will be mobilized through an ICO loan line of 4,000 million euros, complemented by a public guarantee of up to 50% of the amount of the loans subscribed, for the construction and rehabilitation of homes (43,000 units) , the construction of affordable housing on public land from the Public Land Business Entity (Sepes) (36,000 units), the use of European funds from the PRTR to build housing for social rent in energy efficient buildings (20,000 units), aid to CCAA of the State Housing Plan (14,000 units) and agreements with local entities (about 10,000 units).
“Compliance with this objective would mean significantly increasing the recent production figures for subsidized rental housing promoted in the state and regional plans, which stood at around 2,300 homes per year with the definitive classification of subsidized rental housing in the average for the period 2022-2023”, explains the Spanish side
Likewise, in this same period The provisional ratings of new subsidized rental housing in the aforementioned plans stood at around 3,500 housing units on an annual average.. “These figures show the modest production of new social rental housing in the recent period, and illustrate the quantitative magnitude of the effort that will be required to substantially and sustainably increase the production of this type of housing to achieve the objectives set, as well as the challenges which means converging to the average social rental ratios in advanced economies,” the organization concludes.
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