The closing of the 41st Federal Congress of the PSOE, this Sunday in Seville, left an announcement on which the Government has been working discreetly for around a year. The Ministries of Finance, Economy and Housing are finalizing the formula and legal instruments for the launch of a large public company that, in the words of President Pedro Sánchez, is capable of “building and managing housing.” “We have put in a huge amount of budget, we are going to continue contributing a larger budget, but we have to accelerate the pace and converge all operators, public and private, to achieve that goal” of reaching one and a half million affordable homes, this stated. Tuesday the minister of the branch, Isabel Rodríguez, in a interview on TVE.
In the days following the Congress, in which Sánchez confirmed his intention to protect in perpetuity in the Constitution the public nature of housing built with public resources, the Executive has been slipping its plans for this new public company, which will manage and promote housing from the General State Administration. These are some keys to a tool with which the Executive wants to address one of the great challenges of this legislature, which has brought tens of thousands of people onto the streets in recent months.
How is the new public housing company going to be created?
The Executive does not start from scratch. As indicated by the Minister of Housing and Urban Agenda, Isabel Rodríguez, the base of the new company will be the State Land Entity (Sepes), the body in charge of recovering public land for the promotion of affordable housing and for industrial developments. The objective now is to “convert and strengthen” this instrument so that, “in a comprehensive manner, it addresses all the capabilities that the General Administration of the State has,” explained Rodríguez, who pointed out that administrations such as the Ministry of Defense or Adif have “a lot of soil.”
“This company that we already have, Sepes, is going to be implemented with other actions and instruments, such as the Official Credit Institute (ICO) or the assets that we have in administration, which are real estate assets that can be translated into affordable housing,” the Minister has pointed out. The Government’s objective is to incorporate other assets into this new entity, “that represent the failure of the PP’s policies, such as Sareb.” The objective of the so-called “bad bank” is to get rid of the toxic assets generated after the 2008 financial crisis and the bank rescue before 2027, but the Executive has already begun to make part of these properties available to the public housing stock in affordable rent. The question now is whether to dissolve the company, as planned, change its mandate or divert part of the housing to social or below-market rent.
What are you going to do and who are you inspired by?
Sánchez made it clear that the objective of the public company is “to build and manage housing.” From Sepes, the Executive intends for the entity to proceed with the “urbanization, construction, mobilization and management” of housing, Rodríguez has developed. The minister has cited as an “example to follow” the work carried out by the company in the metropolitan area of Barcelona (AMB) and the public company in Euskadi.
He AMB is the body in charge of defining land and housing policies in the metropolitan area of Barcelona and promotes affordable housing promotions with private collaborators, through a mixed company, 50% owned by public partners and a private partner. In Euskadi, where public housing is forever and cannot end in the free market since the approval of a decree in 2003, there are two business models: Visesain charge of promoting protected housing for rent, and Alokabide, which promotes the mobilization of empty homes, both public and private, through guarantees for owners in exchange for a rent below the market price.
At the state level, the then President of the Government, José Luis Rodríguez Zapatero, created a Public Rental Company in 2005. The operation was simple: the owner made the property available to the Company for rent at a reasonable price and the Company acted as guarantor. “The problem we are trying to alleviate is very clear: in Spain there are many empty homes, approximately 3.2 million, and there are many young people and many families without the possibility of accessing a home. It is a truly paradoxical situation that does not benefit either the owners who have empty homes or those who are looking for a home,” said former vice president María Teresa Fernández de la Vega almost two decades ago, in a speech that is still replicated today.
Mariano Rajoy’s Council of Ministers authorized the dissolution of the Public Rental Company in 2012, alleging that it had only managed to manage a maximum of 9,000 of the 24,000 planned homes and that it had accumulated losses of 37 million euros.
Who is going to build the homes?
The promotion of new housing will be done, Rodríguez said, “in collaboration with construction companies.” “It is a very strong sector and it is essential. We have to promote a lot of housing, we are facing a problem that has to do with supply,” he developed, indicating that “households are growing” and that the Ministry will intervene “via supply.” But also with regulation. Specifically, he mentioned the prosecution of fraud with seasonal rentals or price limits in those areas declared as stressed.
The National Construction Confederation, integrated into the CEOE, has indicated that the public company “will not solve housing problems.” “The Government is wrong in its diagnosis,” he said in a statement, in which they advocate streamlining the bureaucratic procedures for construction. “We have the best companies in the world to solve housing problems. We do not need a public company, but we need to end legal uncertainty to increase supply, streamline procedures, optimize efforts, shorten action periods and work in a united and coordinated manner, away from political noise,” highlighted its president, Pedro. Fernández Alén.
How many houses are needed?
The minister has estimated the public housing deficit at one and a half million. In Spain, this park represents only 2.5% of the total, well below the European average, around 9%, which is higher in countries such as Austria (20%) or the Netherlands (35%). The Government is aware, however, that to achieve this objective it will need the participation of other actors. “I ask other public administrations to do the same thing that we do, which is to provide all the resources,” said Rodríguez, who assures that “if any administration says that it can do it alone, it is lying.”
Does it invade powers?
The general secretary of Junts, Jordi Turull, expressed his fear that the state public housing company is “an excuse to recentralize again.” “In Catalonia, we don’t need it,” he stated in a press conference to present his measures in this matter, which also include expanding the public and rental stock.
Powers regarding housing are transferred to the autonomous communities. The central State can finance, coordinate policies and regulate rentals. In the budgetary sphere, the Government has the capacity to influence municipal or regional policies, conditioning these funds to certain actions, such as rehabilitation, construction or different aid. In the case of social or affordable housing developments, until now the Executive had made state-owned public land available to other administrations, so that they could build. This is the case of Operation Campamento, in collaboration with the Madrid City Council, where 10,700 homes will be built on land that the Ministry of Housing acquired from Defense, under the commitment that they will be “affordable” forever, both for purchase and rental. . “We are going to establish a mechanism to set prices that we consider affordable,” ministerial sources stated at the time.
The change now is substantial, because it implies that the central State itself gives itself the capacity to promote and build housing, directly or through public-private collaboration. “Given the complexity (of the problem), we are adopting measures,” defended Rodríguez, aware that increasing the public park “will take more time.” The ultimate objective is to have “more capacity so that, from the development of the land, the delivery of keys and the management of rentals, it can be completed by the General Administration of the State to respond as soon as possible to the needs of the families who Today they need a home.”
Homes, for sale or for rent?
The key to the measure is that the homes are affordable. “What our country is suffering from is that before it was owned by owners and now it is impossible to be an owner and one finds oneself suffocated in the rental market,” acknowledged the minister, who indicated that “what must be guaranteed when buying or renting It is accessibility.” Rodríguez has opted for “prudence” when it comes to ruling on the possible beneficiaries of the homes managed by this public company, something that will be known in “a few weeks.”
“There is a part that is already being promoted with the push of the Government of Spain by other administrations,” he said, mentioning the Recovery Plan, with which 25,000 properties will be activated.
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