Sánchez announces 6 billion euros for affordable rental housing and asks regional governments to assume their responsibilities

He wants to prevent housing from becoming “a kind of bottleneck and a restriction” on growth and employment.

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The President of the Government, Pedro Sánchez, announced this Monday the mobilization of 6 billion euros in the form of loans and guarantees, destined for public and private developers, to promote the construction of 43,000 homes for social or affordable rental, for a minimum period of 50 years.

This was announced by the head of the Executive during the signing of the agreements between the Ministry of Housing and Urban Agenda, the Ministry of Economy, Trade and Business and the Official Credit Institute (ICO), for the construction of these homes for affordable rental.

“We must prevent housing from becoming a bottleneck and a restriction on the continuity of economic growth and job creation,” stressed the President of the Government. To do so, Sánchez has insisted on making this constitutional right effective, which “obviously calls on all administrations.”

“NO ONE” CAN DENY THIS FUNDAMENTAL RIGHT

“There are those who hide behind the powers, which are indeed shared in a composite State, in order to ignore what I believe should be of absolute concern to each and every one of them,” he lamented.

The President stressed that “no one” can deny this fundamental right enshrined in the Constitution and assured that the Government of Spain will use all its resources, capabilities and levers to make this constitutional right effective.

“Making this effective is clearly a challenge for all the administrations responsible for this area and for the Spanish Government, because obviously if it wants to set an example, what it does is assume its responsibilities,” he stressed.

INTERGENERATIONAL CHALLENGE

In this regard, the head of the Executive has quoted part of the re-election speech of the President of the European Commission, Ursula von der Leyen, who gave special prominence to the issue of housing, and then added that he “subscribes to each of her words.”

“It is a housing crisis that affects people of all ages, so this is an intergenerational challenge, as well as for families of all sizes,” Sánchez said in relation to the speech by the President of the European Commission.

The head of the Executive also stated that this issue is imbued with “a sense of urgency”, which has led the Government to “multiply by eight the budgetary resources allocated to housing policy, or to promote the affordable rental housing plan”.

ONE OF THE MAIN CHALLENGES FOR THE COMING YEARS

On the other hand, Sánchez has drawn attention to the fact that the housing problem also represents a “demographic challenge” from which the Spanish Government “is not ignoring”, since this “housing crisis is one of the main challenges of the coming years”.

“This legislature is the legislature of housing and therefore the Government is working on the construction of this fifth pillar of the Welfare State which is access to housing,” stressed the president, although he acknowledged that “there is still much to do.” In this context, Sánchez recalled that the average public housing in Spain “is infinitely lower than the European average.”

“We are talking about the European average being nine or ten percent, and in Spain we are well below those figures, between 2 and 3%,” the head of the Executive explained, adding that, with this reality, housing has “unfortunately become an unattainable privilege for so many people in Spain.”

This is demonstrated, according to the president, by the figures from the latest survey by the Centre for Sociological Research (CIS), which place housing as the second greatest concern for Spaniards. “This is the biggest problem facing Spanish citizens, a drama that prevents our young people from taking control of their own lives and from becoming independent,” Pedro Sánchez concluded.

HOUSING, ECONOMY AND ICO SIGN AGREEMENT TO BUILD HOUSING

The Ministries of Housing and Economy have signed an agreement with the ICO that will mobilise 6 billion euros in the form of loans and guarantees, destined for public and private developers, thus creating a new line of long-term loans of 4 billion, linked to the Addendum of the Recovery Plan, which will finance social or affordable, energy-efficient rental housing.

In addition, another 2 billion euros come from the General State Budget and are included in a line to guarantee and provide partial coverage for the operations included in the Plan.

The promotion of these 43,000 homes is therefore part of the Government’s commitment to increasing the public housing stock, with the construction or provision of more than 180,000 homes, which today already translates into more than 80,000 homes in different stages of development.

TERMS AND CONDITIONS

Specifically, the signed agreement provides for the financing of operations from January 1, 2022 that meet the conditions established for access to the loan, which must be requested before June 1, 2026 and formalized before August 31, 2026. The final recipient must request this “social housing” loan through their financial institution, or directly with the ICO.

In this way, said financing will be allocated to projects aimed at increasing the stock of social rental housing or rehabilitating existing housing, and which includes actions from the Program for the construction of affordable rental housing in energy-efficient buildings of the Recovery Plan, newly built housing on public and private land, the rehabilitation of buildings that are to be used for affordable or social rental, the purchase of land for subsequent construction or assets owned by the Asset Management Company from Banking Restructuring (Sareb).

Thus, the homes built through these loans must be used for social or affordable rental, or transferred for such use, for a minimum period of 50 years. Likewise, the projects will have to be completed on different dates, depending on the type of project financed, although the financing of the Program for the construction of the Recovery Plan must be completed before June 30, 2026.

Specifically, the construction of buildings on urbanized land must be completed within four years from the formalization of the loan, with the possibility of extending it for two more years, while in the case of undeveloped land the term is eight years, with the possibility of requesting an extension that extends said term for four more years.

Finally, in the case of rehabilitation, there will be a period of four years, with the possibility of requesting an extension of two more years.

The Ministry of Housing has indicated that the financed projects must comply with climatic requirements in which the constructed buildings must achieve a consumption of less than 20% of primary energy than that established for buildings with almost zero energy consumption, according to national guidelines; while those rehabilitated must reduce at least 30% of non-renewable primary energy.