2024-09-28 22:33:24
Sunday 29 September 2024, 00:33
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No one opposes it. In cities, access to housing, whether buying or renting, is increasingly difficult in relation to income, especially for young people or low-income families. For example, between 2015 and 2020, the average rental price in Valencia rose by 52% compared to only a 17% increase in the average income per family; in Malaga, rent became more expensive by 45% but the average income only increased by 17%; In Madrid the rental price went up by 41% but the income only by 12%, according to data from EsadeEcPol. And so in many cities. And the gap between prices and salaries has only widened.
The government has proposed measures in three areas: financial control, welfare and increasing housing supply. Among these three points are the rent caps in stressed areas, the ICO recommendations, the Land Law project and the promotion of the private sector of the social enterprise, among others. Sumar, partner of the Coalition of the Government, has also suggested temporarily prohibiting the purchase of housing in areas of stress that are not to live in or for affordable rent and the reduction of tourist apartments.
The solution to the housing problem requires multiple actions and takes time. At that time young people who wanted to free themselves or build a house did not have. Simply put, what happens is that there is more demand than supply and that drives up prices. But some measures can have the opposite effect to what was intended.
Experts have warned that price controls threaten supply. The Housing Act allows rental prices to be capped in distressed areas (if the autonomous community declares it). However, it may cause an increase in low-cost rents in stressed areas, as they will tend to ‘stick to the ceiling’. The rent control activated in Catalonia in 2020 caused a decrease in the supply of apartments and an average decrease in price, especially in the most expensive ones, but increased in the cheapest ones, according to the study conducted by José García Montalvo , Joan Monrás and José María Raya. According to this study, the lowest rental prices rose by almost 7%, although the most expensive ones fell by 2.9%.
There are other international studies that conclude that there are four effects of rent control. First, the investment for the maintenance of the building is reduced (if profits are low, costs are cut); There is no incentive to rent a house and the supply decreases (in the long run, new rental houses are not built); a negative ratio occurs, since there is more demand than supply, the landlord can choose and bias the selection, promoting discriminatory practices; Finally, the owners try to ensure that their rent is not in the regulated sector and the underground economy is emerging (bribes and black payments are frequent in markets with price limitations).
In rental assistance (mostly used in Spain and focused on young people and small and medium-sized houses), the evidence shows the risk that a significant part of the amount of the assistance ends up being transferred to the costs and benefits for the owner of the apartment. instead of a tenant. According to several studies on rental subsidies in Europe, obtained by EsadeEcPol, the owner ends up borrowing between 10 and 66% of the subsidies in the United Kingdom, 78% in France, between 30 and 57% in Finland, 46% in Finland. The United States.
The increased supply is the size that can facilitate the most access to the house. To achieve this, there is no way you can abandon it. Build new properties, renovate old buildings, collect empty buildings. Land to build houses takes between seven and ten years to be available for development and construction due to the many administrative and governmental processes involved. The reform of the Land Law of the Ministry of Housing has been tried twice to be pushed through the Congress without success aiming to implement these principles.
Rent
Up to 66% of the subsidy ends up benefiting the home owner and not the tenant
The numbers can be overwhelming. Funcas estimates the annual number of new homes needed at 200,000 (double what is currently being built); The Bank of Spain estimates that in 2025 Spain will lack 600,000 homes. To cover this deficit, the administrator advocated innovation, private-sector cooperation in raising rents, financial assistance and transfer of public land for housing development for social or affordable rent. Some of it is being done, but too little and too slowly. There is no effect yet on the currency reduction. On the contrary, the increase in prices has accelerated in the last quarter.
The annual rate of completed houses will have to be multiplied by four to equalize the current gap between supply and demand or, otherwise, it will take at least seven years to achieve what should be achieved in two, according to the scope of Real Estate. OBS News Market, led by Carlos Balado, director of Eurocofin. There is consensus that Spain needs to promote 1.2 million affordable rental homes (761,000) and social rentals (442,000) until 2030 to meet the demand of the Spanish population with difficulties in accessing a home.
The Government Agreement between PSOE and Sumar includes increasing the public housing stock to 20% of the total, which currently stands at 2.5% of the total, a quarter of the European average. That will require, according to EsadeEcPol, adding as many houses to the social stock every year between now and 2043 as those added in total to date. A city that is difficult to imagine.
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