The eternal problem of access to housing creeps into the pre-election campaign. Major political parties They launched a series of measures to “fix”. Overall, the Government is determined to introduce regulations in the market, while the opposition is trying to make the market more competitive so that there is more supply of flats. Who is right?
Buying and renting a house has become increasingly difficult., especially if we talk about big cities. Conditions for access to a loan or lease have tightened, as landlords and banks tend to protect themselves against non-payment. For this, guarantees, contracts, payrolls are required… Renting is the method used by many families who cannot afford to buy a house, but this option is getting harder day by day. Rents increased by 10% last year, according to data from one of the main real estate portals, Idealista.
The star measure of the most controversial new Housing Law, promoted by the government and its partners, limiting rent increases. They will not be able to increase by more than 2% in 2023, they will have to be below 3% in 2024 and a new index will be created to mark the maximum amount that can be increased by the State until 2025. And these conditions are toughened for areas declared “stressful”. “This measure involves direct government intervention in the market. When such policies are implemented, famines can occur if owners think it is not worth it to put homes on the market under the conditions imposed on them,” says Fernando Castelló, Professor of Economics at the Polytechnic. University of Valencia and expert in the evaluation of public policy. “Limiting prices has historically not worked. It was made in Catalonia and there was no drop in prices, but a drop in supply”, says Joan Carles Amaro, professor of Economics at Esade.
Professor Gonzalo Bernardos, an expert in the real estate industry, also skeptical of price restrictions. “They don’t work,” he reassures, exemplary of what happened in Madrid and Barcelona, where the supply of real estate declined during the Franco regime. “With price controls, owners earned less than the cost of maintaining the assets, sold them and decided to invest in something else,” he says.
This Executive legislation aroused suspicion among experts. However nor received good reviews from Tenants’ Unions. “The announced pact allows for implicit price hikes, opens the door to fraud in seasonal contracts, and does not provide real solutions to the housing crisis,” the executive warns of this organization, following the agreement between EH Bildu and the ERC. These associations point to the ambiguity of the proposal may cause rents to continue to rise and invite the government to arrange more prices. “There is a dangerous incentive because new rent ceilings are not considered. Landlords can expel existing tenants to raise the rent of the next one, claiming reform,” they note.
A point confirmed by tenant representatives, owner who bears the costs arising from the real estate office. A legal loophole allows real estate companies to charge future tenants for the expenses of their operations in many cases when the owner of the house who has these services contracted.
The People’s Party flatly rejects such proposals of a more intrusive nature and relies on incentives for owners, renters and buyers. Juan Bravo, PP’s Assistant Secretary for Economics, announced this week a series of measures to lower the IBI for landlords renting out their vacant homes; Guarantee concessions for rent or mortgage or direct assistance of 1,000 Euros for those under 35 who buy or lease a home. The view of professor and economist Gonzalo Bernardos is this: These suggestions only serve to increase it further. rental prices: “There is no point in PP’s criticism of the 250 euro rental contract months ago and now offering 1000 euros. If a landlord knows that a young person has this amount, they will raise the prices because they know they can pay. They also say that they will give 1000 euros to low-income young people, but if they do nobody rents them a house, and the banks don’t give them mortgages”.
Another weak point of these measures is their scope. Community of Madrid launched My First Home last year, a program that guarantees young people buying their first home with a budget of 18 million, and by the beginning of this week, the program has reached 307 mortgages, according to data provided by Regional. Executive. According to the team’s best estimate of the head of the Community of Madrid, Isabel Díaz Ayuso, the offer could reach 0.07% of young people in the region. Gonzalo Bernardos thinks it’s a good measure to improve accessibility for young people with a similar function to ICO loans.
increase bid
Increasing the supply of housing to buy and rent is the ideal that all governments seek, but it is not always the solution. “Let’s remember the bubble times, a lot was being built and prices were rising fast,” says Fernando Castelló. The professor from the Polytechnic University of Valencia says that most of the proposals are focused on demand and very little on supply: “With these examples, we see that the opposition is confident that the real estate market will be more competitive so that more people can access it. But remember that If the demand is high, the housing supply should also increase.”.
The Head of Government unveiled a plan last Sunday at the PSOE congress in Valencia. Activate 50,000 Sareb homes, one of several measures to increase supply. Sánchez stated that 21,000 of the total will be put at the disposal of communities and municipalities so that they can receive them. Julián Salcedo, head of the Real Estate Economists Forum at the Madrid College of Economists, downgrades the rating further: “Sareb currently does not have 50,000 homes, at best he will have to build them.”
The government has also announced that it will take action. 4,000 million euros inside ICO loansreflected in European funds, financing the construction of affordable rental housing, which will act as a financial force to carry out the plans of Sareb and Sepes, both of whom are subordinate to the Executive. Juan Antonio Gómez-Pintado, president of the Spanish Association of Supporters and Builders (APCE), states that “it’s good news that there are public funds to finance these homes”, but he was “skeptical” until he found out. “What is meant by loan interest, terms or affordable housing”.
PP has also conducted several proposals to increase the supply of affordable rental housing. public-private cooperation. The Community and Madrid City Council are the most advanced in this regard, ahead of even Sareb and Sepes, with more than 8,500 residences under construction and tendered by private developers. Another of the party’s big bids to increase the bid, led by Alberto Núñez Feijoo, is passing. set up an anti-slum office this guarantees homeowners resources before they invade their home.
After the housing bubble, the housing problem continues and continues for a long time due to difficulties in accessing housing. Suggestions are endless, but good ideas take time. “The solution will not be final until a mass housing stock is formed that can reduce strong hidden demand.. Esade’s Joan Carles Amaro says limiting prices has historically not worked.