Spain takes over ownership when house prices rise

Spain’s left-wing government is pushing for higher rents as housing prices rise in Europe, part of a law that says it will protect vulnerable people from buying and renting.

Opponents say the approach is flawed and will put the country’s population at risk. But Ione Belarra, the leader of the Podemos party that supports the decision, said it would improve the impact of the eurozone crisis over the past decade and the influx of corporate funds. The Investment Blackstone Group is now the largest landowner in Spain.

“Big sales revenue saw an opportunity to focus on home business,” Belarra, who is also Spain’s minister of social affairs, told the Financial Times in an interview.

“We are now starting to put a limit on this and urge homeowners to continue to do real estate business, but not at any cost,” he added. “Not for the cost of eviction, or for people to pay more than 30 percent of the rent they earn.”

Blackstone, who now owns about 30,000 homes in Spain, declined to comment.

The idea comes at a time when there are concerns across Europe over rising rental and land prices. In Germany, citizens of Berlin voted in September to seize landlords to reduce rent.

The bill enshrines economic negotiations in the ruling coalition, with Podemos pushing for a bigger line than that of Socialist Prime Minister Pedro Sánchez.

Podemos insisted on the text of the housing bill as a condition of his support for the 2022 budget, Socialists’ legislature forward.

Among many other things the bill seeks to ban the sale of public housing for sale. In 2013, as government officials sought to compile their books due to the financial crisis, Blackstone bought 1,860 apartments from Madrid for € 129m. It is now part of a € 5bn package for Spanish goods, which includes hotels and offices.

Blackstone’s collection of these items coincided with a major change in the Spanish stock market.

Before the financial crisis, it revolved around the construction sector, which controlled the banks, the labor market and government finances. Following the disaster, rental housing became increasingly difficult, and thousands of people lost their homes.

As a result, many people began to rent houses, ending their home-ownership practices he woke up for decades – even the owners still own more than three-quarters of their homes.

Increased demand has increased the price. According to EY estimates, the average income has increased by more than 40 percent over the past five years, even though it has declined during the epidemic.

The issue is very strong among Podemos followers due to the Spanish youth unemployment rate more than 30 percent – over half of 25 to 29 year olds are still alive and their parents.

Contrary to this, the housing law, which supporters expect to become law in the first half of next year, is being politically charged.

One way would allow local governments to compel landlords – who are said to be the ones with more than 10 properties – to pay rent in so-called “compressed areas”, where rent is much higher than at rising prices. The law also allows states to impose levies on landowners to reduce rent or impose sanctions that prevent them from owning vacant land.

Javier García-Mateo, a real estate agent at EY in Spain, said the share of rental housing in all parts of the world rose from 10 percent in 2010 to 15-20 percent today, but said the law threatens the future. to give.

“In every market you can get involved with, you will stop the builders,” he said. According to estimates, out of the 28,000-29,000 pipelines that planners are planning to build for rent, another 8,000 have been suspended until the legal outcome is clear.

Spain’s Association of Rental Property Owners also claims that the bill reduces the availability of housing and reduces costs.

“This government, especially the mindset of Podemos always has the same observation from the financial authorities – whatever happens, we always feel it will destabilize the economy, that the world is going from bad to worse,” said Belarra, a financial analyst. June from the founder Pablo Iglesias as the leader of Podemos. “This conflict is about to end.”

Socialists show great interest. David Lucas, head of state housing policy, stressed that 85 percent of homeowners are small-scale homeowners, who encourage them to rent rather than force.

They also say that, according to the current situation, the cups will not be operational for 18 months, to allow time for the collection of a new rental price plan.

In any case, the parties led by the People’s Party’s opposition parties have vowed not to abide by the rules if approved by parliament.

But Lucas also said the legislation took a long time. He says: “Whenever there was a crisis, many people just couldn’t find a place to live, while many others lost their homes. “This was an unresolved issue.”

Many voters do not believe. “Rent is very high,” said Casandra, who rents a 30-square-foot apartment in Vallecas, a working-class district in Madrid where housing prices have skyrocketed. “I do not think the law prohibits that. If I were my landlord, I would have to pay more. ”