Spain’s government has approved a plan to boost its stock of low-rent homes as part of an effort to counter spiralling housing costs.
The initiative will see the government sell 21,000 homes from the Sareb “bad bank” – the nation’s equivalent of Ireland’s National Asset Management Agency (Nama) – which was created to absorb assets from failed lenders during the euro-zone crisis, to local administrations to be used as public housing. Another 14,000 Sareb properties which are already occupied will have their status formalised and 15,000 more properties will be built on land belonging to the bad bank.
Properties destined for social housing make up only about 2.5 per cent of the total in Spain, among the lowest in the EU, where the average is 9 per cent. The Socialist prime minister, Pedro Sánchez, has pledged to raise Spain’s social housing to a fifth of its total.
Economy minister Nadia Calviño said that the new plan, approved by the cabinet, aimed “to pay back to Spaniards part of the cost of the bad bank that they shouldered in 2012 and to maximise the social and economic performance of the legacy of the response to the [euro-zone] crisis”.
Spanish rental costs increased by 10 per cent in the year to March and 5 per cent compared to the previous quarter, according to figures released by the Fotocasa property website. The Balearic Islands saw the sharpest annual rise, of 32 per cent, with the Canary Islands and the Madrid region also registering large increases.
Fotocasa analyst María Matos said that “it does not look as if the situation is going to stabilise in the short term, which makes having access to rental accommodation all the more difficult”.
Spain has one of the highest home ownership rates in Europe. However, with youth unemployment at 29 per cent, young people in particular are often locked out of the market.
[ Why does Ireland have Europe’s most expensive housing market?Opens in new window ]
The leftist coalition government has also drawn up a housing law, which seeks to control rental costs. It is due to be debated by Congress in the next few days.
The opposition has criticised the social housing initiative as a cynical ploy ahead of municipal and regional elections on May 28th.
Alberto Núñez Feijóo, leader of the conservative Popular Party (PP), unveiled housing proposals of his own on Tuesday. They include a one-off €1,000 subsidy to help young people with costs associated with renting or buying property. Mr Feijóo also outlined plans to toughen up the legal framework in order to prevent squatting.
