Housing has become the first concern of Spaniards, but political parties continue to throw things at each other’s heads without providing efficient solutions to solve it. On the contrary, the plan presented this week by Sanchezaccompanied by a cohort of ministers, can cause a stampede of investors, which will further restrict the supply of apartments, both for sale and rent, instead of increasing it. Popular and socialists admit that the problem is the lack of developable land, but none of them dare to take steps to stop it.
The one that comes closest is the PP, which promises to “reduce the time in processing urban planning reports from 9 to 3 months” and a new Land Law, which it will present “in the coming weeks.” Your president, Alberto Núñez Feijooexplained after the meeting held last weekend in Oviedo, that, after three months without a response, “the statement will be understood as positive due to administrative silence.” The PP autonomies also commit to “eliminating regulatory barriers and promoting an open market.”
The PSOE, however, defends the opposite. The statement of Sánchez’s conference, Intervention in the housing marketit is quite a declaration of intentions. Instead of focusing on streamlining procedures so that real estate companies can build more and faster, it proposes transferring up to two million square meters to a new public company, which will have a series of privileges to acquire the land and put it on the market.
The problem is that neither Feijóo’s plan nor Sánchez’s plan expand the supply of developable land
Here is the first problempublic-private collaboration is left in the background, to focus on the opening of a society, which absorbs the land of two other state-owned companies, Sareb and Sepes, plus land transfers from other organizations or institutions such as the Army or Adif, the railway manager.
The Government persists in the error, because the model has already failed in countless companies of this type in the hands of city councils and autonomous governments. It is one thing for this company to be in charge of managing public properties, as is already done in other areas of administration, and quite another thing is for it to also act as a promoter and even as a construction company.
He second mistake It is the message that is sent to the market against foreign investment. The official project will limit the purchase of homes to non-resident non-EU foreigners and will change the taxation of SOCIMIs, which do not build housing at an affordable price. Thus, a free blow is given to foreign buyers, who, by residing in our country for 180 days, will be able to avoid the penalty. Last year only around 27,000 such transactions were carried out out of a total volume of 600,000. But, even if this were not the case and no more purchases were made by non-residents, the lack of housing would not be alleviated either, due to the low volume of operations and the fact that the cost of real estate is usually not within the reach of the majority of Spanish citizens. The measure will only serve to scare outside investors, thereby restricting supply. Something similar happens with socimis.
The third strategy of the Government consists of rewarding owners who rent their homes respecting the new reference price index, prepared by the Executive itself in the context of the Housing Law. In the case of individuals, it is considered demanding a 5% reduction in rents.
elEconomista.es has made the calculation for a monthly rent of one thousand euros and the tax savings, discounting the loss of income due to the reduction, would be about 300 euros per year for a person who earns only 18,000 euros gross per year. Tax savings rise exponentially for landlords with higher incomes, which will bring back trouble with their communist partners.
The Land Law and the ‘anti-squatting’ law, blocked due to lack of agreement between PP and PSOE
Sánchez thus skips autonomies like Madrid, which refuse to declare areas stressed by rising prices. But once again, the shot will backfire, because the moderation in prices will be temporary and at the expense of the public treasury. To expand the supply of rental apartments and, therefore, reduce prices, the Government forgets an essential element, the improvement of legal security. The new anti-squatting law, which promised to quickly evict delinquent tenants, sleeps the sleep of the righteous in Congress.
It is fine, finally, that tourist apartments pay their taxes as if they were a hotel establishment, but that will hardly have an impact on the cost of the homes, it is a marginal measure.
The main drawback of Sánchez’s package is that it does not take into account the law of supply and demand, which will result in a narrowing of the rental market and will not be able to speed up the construction of housing in the short and medium term. Of the 184,000 homes promised for this term, only 8,000 have been delivered, around 4%.
What the president said in the presentation of his plan is false: that there is scientific certainty that greater intervention and control over the market will reduce rents, but on the contrary. The Government presumes that the cost of rentals fell by 5% in Barcelona, but the supply was reduced considerably, which will cause a rise in prices in the medium term.
The text of the PP has positive aspects such as “making the regulatory framework more flexible to access publicly owned housing” or the repeal of the current Housing Law, which places caps on the cost of rentals. Likewise, “it demands the unblocking of the anti-squatter law – already mentioned – so that the properties can be evicted in 24 hours” or a new Land Law.
Its star measure, consisting of reducing the Property Transfer Tax (ITP) from 10% to 4% for young people in second-hand housing, or “extending the limit to access mortgage guarantees to 40 years”, which already offered by this Government, would also lead to greater pressure on prices, given the scarcity of the current housing stock. The promise revives the effect of tax breaks, which fueled the real estate bubble at the beginning of the century, despite the fact that seven times more homes were being built than today.
The initiatives of the two political formations focus on the protection of vulnerable claimants, such as young people, but without arbitrating measures to increase the supply of developable land. It’s like starting the house from the roof.
However, there are several common points such as the desire to streamline licenses, official guarantees for buyers or the rehabilitation of empty homes to put them on the market. And, above all, the promulgation of a new Land Law, which both are willing to address, and the anti-squatting law, to improve legal security and encourage owners to put their houses on the market.
A negotiation on these five major coincidences could lay the foundations for a broader agreement in the common interest, instead of throwing things at each other’s heads. But Feijoo expressly refuses any type of housing agreement with the Government.
Sánchez, for his part, does not really want to sit down and talk about these issues, because any transfer would anger his partners from Podemos or Sumar, who have reserved their opinions on their plan and demand even greater intervention from the market. Distrust politicians, they do not work to solve citizens’ problems, but their own. In short, housing has no solution.
P.S..- The breakdown of negotiations with the Government by Puigdemont which leads to the failure of the 2025 Budgets occurs at the worst moment for the first vice president, Maria Jesus Monterowho has just announced his candidacy to preside over the Andalusian PSOE.
The vice president, who was for 17 years at the head of the Ministries of Health and Finance with the governments of Chaves, Griñán and Diazhas ignored Andalusia’s underfinancing problems for more than five years. The singular financing, on which the Government coalition between PSC and ERC depends, would mean a cut of the order of 6,000 million in the funds that Andalusia receives each year to sustain its public services.
Montero resisted presenting his candidacy for months, but Sánchez left him no choice. The vice president has assumed her task, however, with enthusiasm, according to close sources, given the climate of provisionality that has been installed in the government due to the judicial scandals and the difficult relations with Puigdemont.
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