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Spain's central government has signed just this Monday the agreements that will release six billion euros to fund the building or refurbishment of 43,000 affordable or social housing units. These homes will be rented out under these conditions for at least fifty years. The President of the Spanish government, Pedro Sánchez, was present at the signing along with ministers from his government.
Sánchez recalled that during his investiture as president of the national government he pledged to put more than 180,000 affordable homes onto the market. He went on to state that, as of today, "there are more than 80,000 homes in different stages of development." He acknowledged that access to housing is quite the "drama experienced by millions of citizens", but that the market "cannot be expected to provide a solution as if by magic". "It is a problem", he stressed, "that challenges all those of us in charge."
The agreements signed by the Minister for Housing and the Urban Agenda, Isabel Rodríguez, the Minister of Economy, Trade and Enterprise, Carlos Cuerpo, and the President of the Official Credit Institute (ICO), José Carlos García de Quevedo, will release these six billion euros in the form of loans and guarantees for public and private developers. Of these, four billion euros are European funds linked to the Recovery, Transformation and Resilience Plan (PRTR). These will be channelled through the ICO for projects that increase the stock of social or affordable housing rentals either through new builds or refurbs, also including financing for the purchase of land or suitable buildings. In addition, Sánchez's government has created a line of credit to the tune of two billion euros to guarantee up to 50% of these loans free of charge.
The four billion euros of EU funds will be used to provide loans at lower interest rates than current market rates. Also a longer grace period will be given to public or private developers who build or refurbish and lease those properties for a minimum period of fifty years for rental at an affordable price - around 20 to 25% below market rates - or at social rent prices. The rental price will be set by the Ministry of Housing and the corresponding regions.
According to Ministry of Housing sources there are already more than fifty developments awaiting these loans to build 16,500 rental homes, of which 6,500 will be developed in the Madrid region.
"The government's commitment is to increase the public housing stock to European standards, at least 9%, and we are going to achieve this by relying on public-private collaboration. I believe that this is the prototype of the model that we have to extend in order to expand this objective of securing more public housing stock", stated the Minister of Housing. At present the public stock of social and affordable housing represents barely 2.5% of total housing stock in Spain compared to the European average of 9.3 per cent. Moreover, according to data from the Ministry of Transport, Mobility and Urban Agenda, social housing stock in Spain barely covers 1.6% of households.
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