The application of rent limits that comes into force today in the 140 largest municipalities in Catalonia has already paralyzed all projects to build social housing and rent-free housing, according to the agreement of the various agents in the real estate sector.
"Except for the projects that were already under construction, everything has stopped," acknowledges Miles Leonard, manager of the capital market area of the Cushman consultancy
Some international pension funds have built entire rental housing complexes in Catalonia. This is the case of the Dutch APG, the Germans Patrizia and DWS, or the American CBRE IM. For these companies, the sale of these practically new homes to individuals will allow them to leave Catalonia with profits, because the lack of flats has caused their prices to increase in recent years.
Not only have the projects to build rent-free housing, but also social housing, although theoretically this is a priority of the Spanish Government. "Today a bank has already told us that they will not give us a single euro. And without funding we can't build flats", explained Xavier Vilajoana, president of the Association of Promoters and Builders of Catalonia (APCE) and of Euroconstruc, a company specialized in the construction of sheltered housing.
The initial proposal of the Generalitat was that new or renovated flats in the last five years, those with official protection, those with social rent or very low incomes should not have income control. But with the rule published on Thursday they will also be affected. Vilajoana explains that when the Generalitat qualifies a development as protected rental housing, it also sets the price at which it can be rented, and this income forecast allows the developer and the future buyer to obtain financing. The index will now be applied, which in some cases is lower and will also vary every year. "We will study legal actions. Because of the text of the regulation and because of how it was approved", he points out. The Generalitat published the new report that regulates the tense areas and the resolution approving it on Thursday itself, although the law requires that there be a 20-day period of public information so that those affected can present allegations . "They don't know what they have done - he lamented. They have just definitively killed the sector" of the private promotion of social housing for rent.
The resolution of the Generalitat also leaves trapped the owners who accepted the possibility of transferring to the Administration flats occupied legally or illegally by vulnerable families who could not pay the rent. The mechanism, established in the 2015 law, provides that the Catalan Housing Agency pays the owner who is a large holder a special sheltered housing rent (the lowest), but at least guarantees him some income for the property The transfer lasts as long as the current contract lasts, but with the new rule the new contract will have to maintain the income.
The same will happen to those who have transferred their homes to entities that use them for social rent. Carme Trilla, president of the Habitat3 Foundation, which manages around 400 social housing in this way, points out that the key is the limits. "If it's three years, as the law expressly says, we will all be able to adapt", he says, although he admits that "in the sector there is a fear that the rule will become permanent as some of its promoters would like".
Trilla regrets that the Housing law imposes on social promoters such as Hábitat3 the same obligations as large landlords and believes that the key will be to generate the supply of flats necessary to improve access to housing and that the controls "Spain already had income control in the 20th century and we know what happened: it destroyed the rental market."
According to Trilla, to increase the supply of housing despite having a limit on incomes, incentives are needed, such as co-payments, tax reliefs or giving payment guarantees to the owner. In this sense, Trilla criticized the obligation to offer social rent to vulnerable families that has been imposed on large landlords (owners of five or more flats) in Catalonia. "It is an arbitrary decision, which financially sinks the affected. It is obvious that we must avoid evictions, but not at the expense of the owners. We must pacify the sector, because solving the housing problem requires the collaboration of private owners, who are the owners of 98% of the rental homes we have."
