As in the field of education, stable housing policies, durable regulations, and regular funding channels are essential. “There must be consistency and continuity for public policies in this area to have an impact, because housing outcomes don’t appear overnight,” notes José García Montalvo, Professor of Applied Economics at Universitat Pompeu Fabra (UPF). The problem is that for too many years Spain did not even have policies to drive housing construction or to regulate the rights of landlords and tenants. Therefore, overall the sector has welcomed the proposals presented within a 24-hour window by the PP leader Alberto Núñez Feijóo (often regional in scope) and by the prime minister Pedro Sánchez, although many voices doubt their short-term positive effect if there is no political and territorial consensus. The solutions politicians have put on the table are unlikely to yield immediate results, according to experts consulted for this article.
They say the Popular Party measures are aimed mainly at boosting and protecting housing demand, while the Government’s measures are more focused on supply. “Clearly, these proposals represent progress in a sector where action is urgent, and some of the supply-focused measures are undoubtedly interesting,” says Jo an Carles Amaro, professor in the Department of Economics, Accounting and Finance at Esade. Yet, even if some steps exist, Amaro feels that “this is a Band‑Aid when what is needed is surgery,” noting a serious omission in his view, as “there is barely any discussion about legal certainty, and that is something that would help more housing come to the market because owners don’t see a clear future.”
“Measures from one political party alone are not enough, as this is a national issue. Some proposals announced by Sánchez are solid, others, though well intentioned, are hard to implement. What is needed is a union of all political forces,” stated the Federation of Associations of Real Estate Entrepreneurs (FADEI), which participated in the event where the Government unveiled its plan.
Among the most positive aspects of Sánchez’s project, García Montalvo points to “perhaps one of the measures that could become the most important and produce the clearest impact: the PERTE to promote industrialized and modular construction.” The plan, he argues, would enable faster builds at lower costs and with greater sustainability. This is a strategic issue for builders and developers who have long demanded mechanisms to shift the model and ensure financing is not a barrier, adds the UPF professor.
Taxation and Direct Aid
One point that all those interviewed for this article praise is the announcement of a 100 percent deduction in the income tax for landlords who apply the new rent index. “Tax deductions tend to be more effective than direct subsidies,” Amaro notes. “This measure implicitly recognizes that the housing law was missing something,” says Carles Sala, spokesperson for API Catalonia.
“Even though the fine print must be scrutinized, it is positive that the government is extending a hand to owners and moving away from the coercive measures that were proposed in the housing law,” Sala adds. In the sector, there is a measure of disbelief. “The government’s proposals are generic, so we will have to wait to see how they are structured and formalized with the creation of a large state Housing and Land company. The government continues to rely on interventionist policy, which is not the most suitable approach,” questions the Consejo General de los Agentes Inmobiliarios de España (COAPI).
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On the impact of two of the government’s more controversial proposals, the new regulation of socimis and the restriction on non-resident buyers from outside the European Union, experts show cautious reservations. The former, García Montalvo says, had been signaled for some time and there is no clear reason for including it in this package. The latter, the foreigners measure, could provoke substantial controversy but is likely to have little effect, according to the same economist. “That depends on whether it can be applied, which is also in doubt,” adds Amaro.