The Ministry of Housing, Economy and the Official Credit Institute (ICO) signed a agreement on Monday that will mobilize 6 billion euros in the form of loans and guarantees to promote 43,000 homes for social or affordable rental for a minimum of 50 years, under the new Plan for the Promotion of Social Housing. This marks one of the government’s first steps toward delivering a major campaign promise of the current term.
“We want this legislature to be the housing legislature, the fifth pillar of the Welfare State. There is still much to do and the goal is ambitious for all administrations. Spain’s public housing average sits at 2% or 3%, compared with the European Union average of around 10%, so we are working to move closer to those figures,” said the Prime Minister, Pedro Sánchez, during the unveiling of this agreement.
The 6 billion euro investment will be deployed through two channels: a new long-term loan line of 4 billion euros, connected to the second phase of the Recovery Plan, which will fund socially or affordably rented and energy-efficient housing. It will be channeled directly through the ICO for projects aimed at increasing the public rental stock or affordable, energy-efficient housing through new construction or rehabilitation, including funding for land or building purchases. The remaining 2 billion euros, drawn from the State General Budgets, will include a line to guarantee up to 50% of these loans at no cost, driven by the Government and managed via the ICO.
The promotion of these 43,000 homes sits within a government push to expand the public stock of affordable housing, with more than 180,000 homes either built or made available across Spain. “A firm commitment that today translates into more than 80,000 homes in various development stages,” Sánchez stated.
In an event also attended by the minister of Housing and Urban Agenda, Isabel Rodríguez; the minister of Economy, Trade and Enterprise, Carlos Cuerpo; the ICO president, José Carlos García de Quevedo, and the secretary of State for Housing and Urban Agenda, David Lucas, Sánchez defended public-private collaboration in this field and the dynamism and experience of the Spanish construction sector. “There are no magic solutions waiting in the wings, no miracles. The invisible hand does not guarantee that supply will meet demand. According to the latest CIS barometer, housing is the second most worrying issue for Spaniards,” he noted.
The Prime Minister also noted that housing access concerns are shared across EU member states and were echoed by the European Commission President Ursula von der Leyen during her investiture this month. “This Government is determined to act and to tackle the housing challenge. This is shown by the approval of last year’s Housing Law, the eightfold increase in the budget for the Ministry of Housing and Urban Agenda, the Youth Bond, and the deployment of 2,500 million euros in ICO guarantees for the purchase of a first home by young people under 35 and households with dependents,” Sánchez recalled.
Pushing for regional responsibility
Sánchez urged the regional authorities to take responsibility and make housing rights a reality. “There are those who hide behind competencies that, in a multipart state, are indeed shared, to ignore what should clearly be within each administration’s remit,” he lamented.
The President emphasized that no one should deny the constitutional right to housing and affirmed that the Government of Spain will marshal all resources, capacities, and levers to enforce that constitutional right.
“Holding this right to life up to practical effect will inevitably involve all competent administrations. If the goal is for the policy to work, the Government must lead by example and take on its responsibilities,” he concluded.