Spain will dedicate 1 billion euros ($1.2 billion) of the European Union’s coronavirus recovery funds to social housing, the government announced, largely using real estate assets held by Sareb, Spain’s financial crisis-era bad bank.
Overseen by both the Transport and Economy ministries, Sareb will put some 15,000 homes at local authorities’ disposal, while Spain’s Social Housing Fund will release a further 12,000 properties to qualifying vulnerable individuals and families.
“Housing should cease to be a luxury or source of stress and preoccupation,” Prime Minister Pedro Sanchez told reporters on Wednesday. “Both for people in situations of vulnerability and those who live in areas where rents have skyrocketed.”
Spain’s leftwing coalition government made affordable housing a policy priority, although the economic crisis wrought by the pandemic as well as tensions around whether and how to regulate the rental market have complicated their ambitions.
The Transport Ministry is drafting a law to overhaul Spain’s housing market but the proposal hit a snag last week amid tensions between Sanchez’s Socialist Party and far-left coalition partners Podemos. Podemos are pushing for compulsory social housing in all new builds and a broader definition of ‘institutional landlord.’
With social housing representing less than 2% of all homes according to the OECD, Spain lags behind European peers such as Britain, France or Italy, where subsidised housing respectively represents 17%, 14% and 4% of each country’s stock of homes.
Spain will receive up to 140 billion euros in EU funding in the coming years, of which about half will be in the form of grants, as the union attempts to propel European economies out of a coronavirus-induced slump.