New housing policies to favor rented and subsidised housing

The Ministry for Housing looking at ways of helping divorced and separated couples

The Ministry for Housing has announced that it will look at ways of expanding public assistance for young people as well as divorced or separated couples in the new State Plan 2009-2012.

The Ministry of Housing also confirmed that it expected property prices to ‘moderate’ further, although it insisted that it preferred any drop in prices to keep in line with inflation.

According to the latest figures published by the Housing Department, directed by Beatriz Corredor, the price of housing rose by 4% in the first 3 months of this year which is slightly lower than the inflation rate of 4.5% recorded for March.
Nevertheless, sources close to the Ministry of Housing have ruled out a sharp fall in property prices and have assured that the housing sector will recover in 2010, when the demand and supply of housing will readjust itself.

Although property promoters have presented numerous proposals to the government to try and revive the demand for properties and the housing sector the Ministry for Housing has confirmed that its priority is to help those who have difficulties finding a property to live and to help these people gain access to housing through state subsidised housing, known as VPO (Vivienda Protegida Oficial). In this respect it hopes to work together with local town halls and regional governments.

In the short term the Ministry of Housing is aiming to design a new housing plan, dominated by VPO’s and the rental market. The government also denied that its subsidy of 210 euros for young people renting property was not affecting the price of renting and that there are several measures to ensure that rental prices do not rise excessively.

Huge subsidised housing plan for Andalucia

Pact to guarantee the right to a home in Andalucia

The Andalucian regional government, business associations, trade unions, town councils and financial institutions have signed the biggest agreement on social housing in Spain’s history. The pact agrees to build and finance 700,000 flats over the next 10 years - 300,000 of which are destined to be subsidised social housing.

With this pact the Andalucian regional government is attempting to establish the basis for the application of a new law which Spain’s socialist government wants to introduce in the next parliament if they win the general election due to take place next March.

The new housing law would guarantee the right to a decent home for everybody with an income of less than 3200 euros a month. If the law is passed then it would be the first of its type in Spain and Analucian residents would be able to claim their right to a decent home in a court of law if they weren’t satisfied with provision made by the regional government. The idea is that it would be something similar to the universal right to education and an article would be added to the Spanish constitution to guarantee this right.

The Regional government, business associations and the trade unions UGT and CC OO have all endorsed the pact. Over the last 25 years 500,000 homes have been built in Andalucia which is 42% of the existing total.

The Andalucian president Manuel Chaves, hopes that ‘getting a home stops being a social problem and becomes a right just as article 47 of the Spanish constitution states’. He also said that the new pact to build more homes was one of the most important agreements ever signed in Andalucia. However, Chaves emphasised that the new pact wasn’t about giving anything away for nothing but about eliminating property speculation and making sure that the price of a home was in accordance with the level of income of ordinary citizens.

The future law will guarantee that those citizens with an income less than 3200 euros a month will only have to dedicate a third of their salary to buying a subsidised home or 25% of their income if they are renting. More than 300 people including politicians, bankers and business men and women were present when the document outlining the pact was drawn up in a former convent which had been restored by the regional government.

In addition to building 300,000 subsidised homes the regional government together with various banks signed an agreement regarding the purchase of these homes by its citizens worth 9,500 million euros with a reserve of up to 18,000 million euros for the next 4 years.

Furthermore the regional government will provide 1.900 million euros for investing in homes. Andalucian town halls have committed themselves to provided a quarter of the costs of providing the infrastructure and personnel for the new housing project with the rest to be provided by the regional government the total cost of which is estimated at to be 5.600 million euros.

The Andalucian regional government has promised to present the Housing and land plan for 2008 – 2012 by the end of this year. It will outline the types of homes, aid and those who will be entitled to a home under the plan. It will specify the number of homes that will be built over the next five years.

Under preliminary plans already drawn up 200,000 homes are to be destined for families whose income is between 600 and 1500 euros a month, 40,000 for families with incomes between 1500 and 2100 euros a month, 40,000 for those families with incomes between 2100 euros and 3200 euros a month as well as 20,000 homes for families at risk or socially excluded families.

Advantages for property owners renting property in Spain

Property owners in Spain who rent out their Flats could save 70% in Insurance Costs
In an interview on Spanish television, the Spanish Housing Minister, Carme Chacón, spoke about government plans to help property owners rent out their flats. In the latest proposals landlords could save up to 70% on multi-risk household insurance which would protect their property against defects and damage.

The Minister explained that under these proposals the costs of taking out insurance on a 70 m2 flat would drop from 170 euros to just 55 euros. She said that reduction in insurance costs would be available through the Public Renting Society.

Furthermore Chacón said that these proposals would be included in the State Plan for Housing, so that the highest number of people would be able to benefit from a grant of 6000 euros, already in place, destined for property owners who rent out their empty flats or houses. All landlords who rent out empty property will be entitled to this grant regardless of how large the property is or how much the rent costs.

The Housing Minister said that these proposals which are intended to get more flats and houses onto the rental market will be formally presented by the Housing Ministry next week.

Chacón explained that for many people in Spain housing was the second most important social issue but for the young it was the first. Moreover, as well as supporting ‘vivienda protegida’ (council housing) destined for sale Chacón is also in favour of publicly rented public housing in an effort to put an end to what she called ‘Spain’s sad record of having the oldest age for leaving home in Europe’.

Housing policies for young house buyers

Zapatero to help the young by making housing more accessible

The Spanish president, José Luis Rodríguez Zapatero, has promised that the government will make housing policy a priority in order to make more housing available to a high number of young people.

Zapatero made these declarations yesterday in the closing ceremony of the 23rd Young Socialists Federal Congress in which he indicated that housing was part of PSOE’s electoral commitment and that it was an issue that especially affected young people as well as many workers which is why he assured that the government was intending to make a great effort to help young people get access to housing.

In his cabinet shuffle earlier this month, Rodriguez Zapatero substituted the previous Housing Minister for Carme Chacon. One of the new minister's first initiatives on occupying her post was to name a new director of the Public Renting agency. The agency was created during the first year of the Socialist Government and was meant to present youngsters with affordable rented accommodation, but has as yet failed to have any great impact on the Spanish real estate market.

Related: Property for sale and rent in Spain

New land law for Spain

Zapatero promises new land law will fight corruption

This week the Spanish president, José Luis Rodríguez Zapatero, assured congress that the new land law will fight against corruption and speculation. He said that town halls and local government had a pivotal part to play in its application.

During the final debate in congress Zapatero said that the conditions under which urban development had taken place would change although he added that would be difficult to put right mistakes made in the past.

He said that the law was aimed at stopping property prices, which in recent years have grown disproportionately despite the fact that the housing market has begun to slow down.

The President highlighted the support for the new land law in parliament and said that the period in which the number of state subsidised housing had decreased would be corrected, the landscape and the environment would be protected and corruption would be confronted.

During this speech in congress Zapatero spoke a great deal about measures against speculation and corruption included in the land law. He underlined the need for transparency and control over urban development and guaranteed to stamp out any corruption in the public sector.

Zapatero said that the new law would show who benefited from decisions taken in town halls and gave more power to public meetings.

He also assured that the law would promote sustainable urban development and put a stop to the idea that any area could be urbanised. He also spoke of a new system of evaluation the value of land. He said the law protected individuals and spoke of citizens not property owners.

His speech was greeted by a long ovation in congress.

Rented student flats in Spain

‘Mini flats’ for students available from 2009

María Antonia Trujillo, Spain's Housing Minister, has announced that under the Government’s housing programme, up to 10,000 student ‘mini flats’ will be built on university campus’s all over Spain.

The Vice president, María Teresa Fernández de la Vega, recognised that 80% of rented housing was rented out to young people. It is estimated that there are approximately 1.2 million University students in Spain out of which between 20 and 30% live away from home, mostly in shared student flats or residences.

The government-subsidised student flats will measure between 30 and 45 square metres and consist of one or two bedrooms with a communal living area. They will cost between 75 to 200 euros per month depending on the city and type of flat and the government intends to invest 300 million euros in the construction of up to 10,000 flats under on land owned by universities.

According to the Spanish housing minister, the programme, which forms part of the Spanish Government Housing Programme, is designed to help the mobility of students and encourage more equality of opportunity.

The mini-flats will be available to rent for up to five years in rotation and will be managed by each university. Madrid's Carlos III University will be one of the first to have mini flats available to rent - at present it is awaiting approval to start constructing its first mini flats.

Valencia Land Law debated in the European Parliament

This week the European Parliament debated and voted on the recommendations of the Fourtou Report on the controversial Ley Reguladora de la Actividad Urbanistica (LRAU).

The law, known by those who protest against its consequences as the Valencia land grab law was originally designed to make sure that areas under development had sufficient infrastructure (roads, street lighting, green belt areas etc.). That was the the theory. However in practice the law has meant that property developers are able to apply to build on land already belonging to other owners where building is not permitted. When their application is approved (as it often is), the land is reclassified by the authorities, and the developers are then allowed to pay exisiting owners prices far below the real market value and build a road, a path or even part of a golf course, sometimes right through the middle of the former owner's back garden.

Most of the people affected by this law are Europeans who have seen their dreams of a perfect Spanish home in the sun shattered by ruthless developers. More than 15,000 people have made a formal protest asking the European Parliament to intervene, and the protest group set up to fight the LRAU, Abusos Urbanísticos No, has been active in attracting national, international, political and media attention to a growing problem and demanding a solution. And recently British law firm Irwin Mitchell decided to register land law victims with the European Human Rights Court .

Valencia's regional government promised in 2003 to revise and reform the LRAU, but seems in no rush to do so. A pre-project was presented to the Valencian parliament in June this year, but nothing has yet come of it. While the government insists that its intention is to change the law and protect the interests, and land, of property owners, opposition and protest groups allege that it is prevented from doing so from the interest of many of its members in the property development underway in the region.

Ever since local and foreign property owners started their active protest, the Government has come under increased pressure to do something. In the Summer a delegation of Euro-MPs visited the Costa Blanca and met with foreign residents, local politicians and property developers to discuss the problem. In November the European Parliament advised the Valencian authorities to modify urban development legislation in the region. And finally this week on 12th December the European Parliament discussed the Fourtou Report and endorsed its contents in a vote on the 13th by a massive majority of 550 in favour, 45 against and 25 abstentions. The Report calls on the European Parliament to urge a moratorium on the approval of new property developments on land where development is not permitted.

Any body considering buying property with land in the Valencian Region is advised to seek legal advice from a lawyer who can help with the necessary investigation to ensure that the land attached to the property is not in danger of being subject to eventual seizure by property developers.


Related:
EU homeowners and ambassadors challenge Valencian land laws
European Parliament delegation visit Valencia to challenge Land Laws
Valencian landlaws "unconstitutional"
Advice from the British Embassy to people purchasing land in Valencia

New state property rental agency ready for business in Spain

The Spanish Housing Minister, Maria Antonia Trujillo, yesterday announced that Spain's new public property rental agency is ready for business with 1,500 properties to rent which will be available for rental as from October.

1,200 properties have been registered with the agency by private owners, and the rest are flats and apartments in state-owned buildings.

Trujillo said that several Spanish ministries owned buildings which would be converted into flats and registered for private rental with the state agency. The minister said the agency would use this month to make any last-minute improvements and reforms to the properties on the new register, and to negotiate the rent with owners. She said the rent fixed by the agency would be just below market rates. In October a campaign will get underway to promote the properties and attract tenants.

When the government announced the creation of this new property rental agency in Spain a few months ago, its objective was to rent 1,000 properties during the first year, and 25,000 by the end of the legislature in an attempt to encourage and professionalise the property rental market in Spain.

Related:
The right of tenants to purchase rented property in Spain