Spain Tackles Affordable Housing Crisis With 50,000 Foreclosed Homes And Properties

house with door and windows boarded up
Thousands of homes in Spain were abandoned following the 2008 mortgage crisis.

The average age of young people leaving home in Spain? Nearing 30. Many, if not most, simply cannot afford to leave home, given the impossibly high cost of both rental and purchase housing in much of the country. This situation is worst in areas favoured by tourists, with second homes and tourist accommodations making housing scarce and expensive.

The current left-leaning national government is offering a solution: foreclosed housing that lies idle and empty following the 2008 housing crisis, when large numbers of mortgaged but ‘under water’ homes were abandoned by their owners. That left banks holding the bag as they foreclosed on properties that had little or no hope of re-selling except with bankruptcy-threatening losses.

In 2012, under pressure from the European Union, Spain created a ‘bad bank’ — SAREB (La Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria). It was charged with propping up banks in danger of failure. SAREB did so by buying up their stocks of unprofitable homes.

Now, some 11 years later, the Spanish government is planning to use SAREB’s foreclosed housing and land to bolster the country’s supply of social housing. The quantity of social housing in Spain (where rents are geared to incomes) is among the lowest in Europe — three per cent of the country’s entire housing stock.

50,000 homes is the government’s promise. Some are homes owned by SAREB that are already built: some housing will also be built on SAREB-owned land.

Is this a viable rescue plan for national social housing — one that might offer ideas for other jurisdictions? Or is it ‘smoke and mirror’ politics, as free-enterprise-supporting Spanish cities claim: a plan offering, at worst, nothing but units of tumble-down housing and/or locations in ‘ghost towns’ where nobody wants to live.

Read more in the following publications, each offering somewhat different perspectives on the issues involved, including subsidiary plans for rent caps on existing rental housing, from:

YAHOO!: Spain frees up ‘bad bank’ houses to ease housing crisis and
Anadolu Adjanci: Spain plans to turn foreclosed assets into 50,000 public housing units 
REUTERS: Spain to help young citizens fly the nest with foreclosed homes

And to round out this picture, the Cortes Generales, Spain’s national parliament, has also just passed what Prime Minister Pedro Sanchez has called the “first-ever housing law since Spain’s return to democracy in 1975.” It seeks to cap rent increases — an unusual national initiative in developed worlds still committed to neoliberalism and its ‘hands off free-enterprise’ focus, which inevitably seem to favour landlords over tenants.

Read more at RTÉ: Spain passes key housing law ahead of elections