Spain needs to create 800,000 social rental homes

by Deborah Cater
Social rental homes requies large investment in Spain

In the next fifteen years, Spain wants to make 800,000 more social rental homes available. In addition to the €1billion already earmarked, this would require a further two billion euros investment.

The plan comes from Spanish non-profit housing associations, real estate employers and employee organisations. For its realisation, the government needs to invest €3.45billion over the next three years. The plan has been signed by 34 real estate organisations; a significant number of which are from Catalonia.

Semi-private real estate projects

Carme Trilla, Chairman of the Observatorio Metropolitano de la Vivienda de Barcelona, ​​calculated Spain needs a total of two million social housing units to meet current demand. Of those two million, experts say 40% ought to be combined public-private new construction projects. Based on an average house price of €114,000, a calculation arrives at a required €23,000 (20%) government investment per house. Multiply the house cost by 50,000 homes per year, and the result is an annual government investment of €1.15 billion.

The plan sets out a number of measures to supplement government investment. In addition to making building land available, private investors must receive a guarantee from the official credit institute ICO for 80% of the necessary financing and the VAT rate on the homes must be reduced from 10% to 4%.

ASSSA - health insurance in Spain

Large part of the budget goes to more sustainable homes

The €1billion already pledged by the Spanish government comes from the €6.82billion from the European emergency fund intended to adapt the homes in Spain. Most of this will go on making homes and offices more sustainable. This a result of an EU condition for a future low-carbon economy.

The Spanish government’s current housing plan ends this year. The Ministry of Transport, Mobility and Urban Agenda is due to approve a new plan at the late 2021/early 2022. According to Carme Trilla, the Spanish government has not yet released anything  regarding the level of investment in the housing market, but must start with a billion euros to define later which investments will follow.

Spain has the least, the Netherlands the most social rental homes in Europe

Within Europe, at 1.6%, Spain is one of the countries with the lowest percentage of social rental homes. According to the housing associations which presented the new plan, Spain spends only 0.1% its gross domestic product on social expenditures and housing. Meanwhile, the European average is 0.6%. When it comes to the percentage of social rental housing, the Netherlands is the European leader with 30%.

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