An operation characterized by “its transparency and competitive competition.” This is how the Ana Botella City Council described the sale of 1,860 officially protected homes from the Madrid Municipal Housing and Land Company (EMVS) to the Blackstone vulture fund for 128.5 million euros. A maneuver undertaken in 2013 that, under the pretext of guaranteeing the financial solvency of EMVS, ended with 18 promotions of public rental houses and rent-to-own houses in the hands of the companies Fidere Gestión and Fidere Vivienda, now renamed Testa Residencia. . That is, in the hands of subsidiaries of the Blackstone vulture fund.
The decision returns to the fore in a context of housing crisis that has already led to a social outbreak. In the draw held last Friday the 28th for 400 affordable homes from the EMVS (less than a quarter of those sold by Botella), the current vice mayor Inmaculada Sanz preferred not to give her opinion on that controversial sale of social rental apartments when consulted for this newspaper. He did not dare to classify it as an error and instead chose to highlight what in his opinion are the main lines of José Luis Martínez-Almeida’s housing policy.
“We are committed to being the public developer and the company that builds the most housing in Spain. When we arrived there was less housing, we already have more than 8,000 and we want to reach 15,000. The policy of this Government team is very clear, although we also need to increase the offer in the city of Madrid so we are going to continue working on public-private collaboration,” said the vice mayor in response to a question from Somos Madrid.
“From that dust, this sludge,” says Arantxa Mejías, president of the Association of People Affected by the sale of public housing by EMVS (AAVVE). He gives this answer to this newspaper’s questions about the relationship of the current housing crisis with the sale of his home and that of 1,859 other families to Blackstone. “At that time there was already a housing crisis with continuous evictions, it was absurd that the City Council would think of getting rid of the little housing assets it had at its disposal. [en concreto de un tercio del total]. And even more so at a ridiculous price,” he adds.
Eleven years later, although he continues to live in the same home, the wound from that maneuver has not finished healing. Mejías’s parents paid around 500 euros per month when the City Council granted them their officially protected housing around 2004. Now they pay around 1,100.
But the worst thing, he says, was the opacity and uncertainty that the process aroused: “We found out everything when a neighbor received the eviction notice. The City Council left us sold and helpless. “It was shocking and devastating.” His family filed a complaint for coercion after Fidere refused to renew the contract. Once admitted for processing, they achieved a negotiation that allowed them to “enjoy the right to opt for this home like any neighbor, without being discriminated against for having fought for our house.”
The sale to Blackstone was also the first contact for many citizens with the concept of “vulture fund”, increasingly present in the public debate as its proliferation and control of properties in large cities grew: “It is very dangerous, and even more so that there is no effective control of the administrations. It is also likely that rental housing will become the monopoly of a few large owners, something that will end up being a problem even for small landlords. Not to mention that the conversion of the houses purchased into tourist rentals causes the charm of the neighborhoods to be lost and generates a horrible neighborhood coexistence. And not just in the center.”
A “harmful” operation that “ignored contracting regulations”
In the sale of thousands of public homes, the Botella Government “violated the most basic rules of good management,” according to a report from the Madrid Chamber of Accounts published in 2016. The opinion listed over 66 pages a host of of irregularities on the part of EMVS in the disposal of its housing portfolio. Among them, that the Madrid City Council provided privileged information to four companies (Azora-Morgan Stanley, Lone Star, Harbor Group-Álvarez & Marsal and Magic Real State-Blackstone, the final winner) about the conditions of the sale, before making The operation was publicized on May 3, 2013.
The Chamber concluded that the decision to sell these promotions was made “at least between December 12, 2012 and before April 2, 2013.” In other words, “there was no public concurrence” when it came to selling that portfolio of social apartments. In fact, they had submitted offers before the process was open.
Finally, the Provincial Court of Madrid and then the Supreme Court ended up acquitting Botella; the former CEO of EMVS, Fermín Oslé and the representative of Fidere, Alfonso Benavides. On the administrative side, the Court of Accounts convicted the former mayor and seven senior members of her Executive in the first instance, but the sentence was later revoked. Two councilors appointed by the PP freed Botella from a million-dollar punishment worth 25.7 million. Mejías assures that “unfortunately all these acquittals were foreseeable and expected because there are families and surnames that are very difficult to touch.”
The acquittal of the Court of Accounts, by two votes to one, was signed by the former Minister of Justice in the first government of José María Aznar, Margarita Mariscal de Gante, and José Manuel Suárez Robledano. The vote against was Felipe García, a councilor proposed by the PSOE, who maintained the arguments put forward by the organization in its first conviction: the sale operation was “harmful” to municipal assets and did not comply with the principles of “publicity, concurrence, transparency and objectivity” in the procedure.
According to the report of the Chamber of Accounts, the municipal company of the City Council failed to establish the mandatory specifications. With this, “not only the internal contracting rules but also the Public Sector Contracts Law” were ignored, as well as the reports of need and technical and legal feasibility of the operation. The result was that “it ignored its obligation to establish an objective appraisal of the value of the assets to be sold.” Thus, for the Chamber of Accounts the EMVS “not only ignored the contracting rules,” but also “the criteria of rationality, economy and effectiveness that must govern the management of public interests.”
The small print of that letter also showed how the municipal Executive was bowing to Blackstone’s demands. The fund reduced its already “final and binding” offer by two million euros, arguing that there were more neighbors who did not pay the rent than those announced, an assumption that EMVS accepted “without the slightest proof.”
In addition to those directly affected, there were thousands of indirectly affected by disregarding a citizen right such as social housing, which any family should be able to access to live with dignity.
Arantxa Mejías
— President of the Association of Affected Men and Women by the sale of EMVS public housing
The City Council also did not act when the fund did not materialize the 2.3 million euros in the rehabilitation and improvement of the houses that it detailed in its purchase offer. The Accounts Chamber highlighted that it remained “a mere intention, not a real commitment.” Not in vain, the company claims to have invested 2.1 million, but “without documentary proof of this point given that the majority of invoices provided cannot be considered investment but simple maintenance.” Fidere even pointed out that this contribution “is not part of the obligatory content of the transaction.”
Arantxa Mejías says that already at that time they understood that they were the ones directly affected, but that Botella’s decision would leave “thousands of indirectly affected by undermining a citizen right such as social housing, which any family should be able to access to live with dignity”. He believes that “it is very dangerous that in the 21st century we cannot access decent and affordable housing, that we leave so much of what we earn on a roof.”
A home and a decent life that for her is not limited to the shelter of a roof and four walls, but includes “having a certain number of square meters in which to have a family or live alone with full conditions.” And he adds: “They are attacking this right and making us feel that satisfying it at a reasonable price, paying our rent and supplies, is demanding a life beyond our means.”
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