2023-10-01 08:59:42
Spain faces a serious problem, especially in its main cities. The increase in the percentage of people who opt for rent after the burst of the 2008 bubble, together with the price increases and how they have been detached from salaries, the average effort of families to pay their income has increased. According to the Idealista real estate portal, on average, Households allocate 30% of their income to pay their rentbut this percentage is much higher in locations with demand: it reaches 33% in Madrid, 37% in Palma de Mallorca or 40% in Barcelona.
The average net income per householdwith data from the National Institute of Statistics (INE), has increased around 23.5% since 2015; while the rental price, at the national level, has increased cases 74%, three times salaries, according to real estate data platform Brains Real Estate. This, in many regions, does not represent an accessibility problem because the supply of housing is sufficient, but in those with high demand it causes problems for lower incomes.
Juan Velayosone of the most experienced managers in the real estate sector, currently developing advisory, consulting and investment work from his own boutiqueJV20, points the problem of accessibility to housing, “is not only the biggest problem in Spain, but one of the biggest in the developed world”. David Martínez, CEO of the developer Aedas Homes, also highlights that “there is a real need for housing” and warns that “its manufacturing requires capital that comes from outside Spain.” In this same line, Alejandra Morafounding partner of Anheros, adds: “The housing crisis is not exclusive to Spain, it is a problem at the European level. The European Commission has given a mandate to the European Parliament so that the problem becomes a political priority for the framework 2024-2029 because it is seriously affecting other fundamental pillars, such as employment, social inclusion and the health of democracy itself.
Generate more offer
Most of the measures proposed by the sector, in addition to greater legal certainty, which will be discussed later, are expand the rental housing stock at affordable prices, since the existing one is very small. The formula proposed by the experts is public-private collaboration, in which an administration gives plots to private companies to develop apartments that will be rented at a limited price agreed upon in advance. “The real estate sector has to take this bull by the horns and the public sector has to let us do it because it is not capable of doing it on its own,” Juan Velayos graphically summarizes.
David Martínez defends the Live Planthe public-private collaboration program of the Community of Madrid, in which it is present, as “a great example of good functioning and what collaboration between the public and private sectors should be like“. “In this way, developers can access public land and put affordable housing on the market, especially in the case of rentals, which also allows young people to access affordable accommodation. “We are developing the project with great enthusiasm, demonstrating proven execution capacity and establishing ourselves as one of the most relevant industrial partners in the Spanish real estate sector.”
According to Alejandra Mora, what Spain first needs is for collaboration between the public and private sectors in affordable and social housing to be formally and normatively defined. “The definition must involve talking about the conditions of the two parts of the collaboration. Suppliers and managers must put on the table the returns with which they are willing to work and the legal structures that work for them. Not all capital is willing to work with surface rights, or public concessions, or to give up past profitability. The Administration must provide the support, the budget and the management and maintenance conditions of the park. Collaboration does not make sense with a budget that has not reached 0.5% of GDP annually in the last ten years. To make a comparison, the City Council of Vienna, with a population equal to that of Andalusia, has a budget of 2.5 billion euros per year. This is not just about the transfer of land, more is needed.” In addition, the Anheros partner highlights that Spain must be standardized in regulations: “The United Kingdom, the Netherlands, Austria and Germany already have social housing providers regulated, the aid public for years and public financing circuits. Also, for example, there are limited benefit Housing Laws in Austria.”
Mora also demands funds, both public and private. “In the United Kingdom there are 1,300 associations that provide social and affordable housing to 11% of the population. None was born from the capital of conventional real estate investment, like the one we are used to seeing in Spain. Putting these machinery into operation can be done at through a millionaire donationsome in England were born like this, or with public budgets sustained for decades“, he points out. The partner of Anheros, one of the greatest experts in Spain of what is known as affordable housing, maintains that housing is a “lucrative investment”: “It must continue to be that way in order to have the enormous amounts of money that we need in Spain and Europe to alleviate the existing deficit.” On the other hand, he recognizes that this business “cannot expect to make double-digit returns.”
Finally, in terms of supply, the experts interviewed highlight that within the generation of new housing supply, more supply of the raw material to build them, land, is also needed. “We have to improve planning tools to get more land on the market. It is ridiculous and the greatest failure of this country not to be able to generate more land where more needs to be built. households. If we increase the supply and generate more land, the price of housing will drop and not understanding it will be a failure of the political class,” concludes the former director of Neinor Homes, PwC or Alantra.
In this same line, David Martinez, places duties on the public sector: “The development sector can help solve the problem of access to housing, but it needs the support of the public administration, which develops land, the raw material for housing. Furthermore, it depends on the administrations “streamlining the administrative processing of housing production, providing security, certainty and credibility.” On this point, the Government, now in office, began the legislative process to approve a new Land Law, but the departure of Isabel Pardo de Vera from the Secretary of State for Transport, Mobility and Urban Agenda, together with the call for early elections, paralyzed the norm.
More legal security for owners
Miriam Nasserresponsible for the legal area of Rental Insurance, summarizes the problem of lack of supply in that “many owners, mostly small holders, already They do not want to rent their homes because they no longer feel supported “The origin, according to Nasser, lies in “the multitude of legislative changes in recent years.” “We find a protectionist tendency for the tenant, and an increasing lack of protection for the landlord,” he adds.
Among the factors that most slow down supply, within the legislative changes introduced by the Housing Lawthe person in charge of the legal area of Rental Insurance highlights the greater obstacles when initiating an eviction procedure due to non-payment of rent or because the contractual period has expired: “This delays the recovery of possession of the home, increases the monthly rent owed and causes damage to the landlord without any type of compensation in return.”
For Miriam Nasser the solution is to incorporate “new legislative changes that allow the landlord to feel supported by quick justicewhich allows the recovery of possession of the home and the rents due within a reasonable period of time, without undue obstacles or delays due to the tenant’s situation.” “It is essential that these measures come hand in hand with tax incentives in the perception of the rental income for landlords, as well as economic and social aid that makes it possible to alleviate the vulnerable situation of tenants, without transferring that responsibility to the landlord,” he concludes.
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