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UN rapporteur questions the PSOE’s housing policy

The association Platform for Decent Housing (PVD) noted that the PSOE’s measures on housing differ significantly from the recommendations of the UN Special Rapporteur, Miloon Kothari. PVD is calling for the legislature to adopt measures that eliminate the causes of speculation and high prices, and not mere ‘Band Aid’ solutions and it severely criticises the Ministry of Housing’s latest measures.

The UN office of human rights’ special rapporteur for decent housing, Miloon Kothari, has presented his report on the mission to Spain before the United Nations Council on Human Rights. From the Platform for Decent Housing we want to communicate that the Socialist Party’s housing policy is far from implementing the recommendations of this report.

For this reason, and as it coincides with the start of the legislation, we are asking the future government to present structural housing policies that focus on correcting the main fundamental problems and not mere band-aid measure, as has been the case up to now. In Kothari’s judgement, the perception of housing as a mere commercial object (including for their own public administrations) is speculation without any form of regulation, and is prejudicial to disfavoured communities.

Moreover, for PVD, the Ministry of Housing is distorting the truth by stating that some of the recommendations of the UN report have already been implemented last year.

For example, regarding rent, the rapporteur repeatedly recommends transition accommodation at reasonable prices and the construction of housing with public funds. In France alone, there are four million of these types of housing, while in Spain, this is ridiculous a figure. Last year, minister Chacon, in speaking with different organisations on the right to decent housing, avoided speaking about this measure. Instead, they have put in place direct rent assistance, a ‘Band-Aid solution’ that could also have a secondary effect of increasing rents in the coming months and in face of this shortage and lack of controls, they would have to give in.

Concerning the increase of protected housing parks; nothing has followed to support this, if at the same time, they have caused prices to increase. In the reform of the 2005-2008 Housing Plan approved in January, the Housing Ministry allowed the reference prices of state-subsidized housing to be increased and it agreed to increase housing prices that have reached up to 28 % in Alicante or Zaragoza or up to 20% for Madrid or Barcelona. For PVD, the possible bet to build state-subsidized houses in large quantities should take into account the existence of three million empty homes in Spain, whose entry onto the market had to be pushed.

In point 91 of his report, Millon Kothari clearly states that one of the ways to guarantee access to decent housing is to reduce land and housing prices and that the all levels of the Administration should intervene in the market to make this a reality. However, the measures implemented by Chacon in January (assistance to promoters, purchasing aid, module increase, etc.) have a background that clearly defends keeping the price bubble.

For PVD, it is indecent that the same administration uses public money to counteract the market logic and limit the price bubble, bearing in mind that in some cities, housing has increased by 300% in the last decade. According to different media or institutions, housing in Spain is over valued by 30% to 60%.

Another of the “accomplishments” presented by the government to the rapporteur is the law on land. However, what is not stated is, that the Ministry of Economy is preparing a new ministerial order to correct some of the measures set out in the law on land that displease the large promoters, to the detriment of protected housing; according to the economic newspaper Cinco Días .

Concerning the dubious “accomplishment” which the government is attributing to itself that the price increases have slowed, it should be noted that for a Spaniard to buy a flat today, it now costs 40% more than when Zapatero arrived in power, and 30% more if he wants to rent.

For PVD, sustainable improvement in access to housing can only take place if we put a stop to the causes of the problem and if together, we dismantle the group of the interested, such as private individuals but also that of the administration itself; which have now caused Spain to be distinguished as the country in the developed world with the worst access to housing.

In this view, measures such as reforming the financing of the city halls so that they do not depend on the (income generated by) proceeds of town planning, are fundamental. There is also the need to reform the methods of land allocation, avoid percentages of money from town planning from being shared among some institutions; relentlessly control corruption and fraud to which is so prevalent in the real estate market (especially in protected housing); promote putting empty flats on the market at reasonable rates; limit the endless growth of mortgage periods, eliminate deductions and fiscal figures that do not promote purchasing, whatever the price; do census surveys and studies of detailed needs and create and extensive public housing park to be rented. To this, we also need to add, an increase in the budget for housing policy up to levels of half the European one.

Concerning the Ministry of Housing, its existence makes sense only if its actions are really destined toward the objectives for which it was created, i.e. improving access to housing. The reality is, that since Chacon’s arrival, the measures taken are far from searching for that objective of sustainable form and seem more destined toward pleasing the large promoters and maintaining the real estate bubble. It is enough to read the reform of the 2005-2008 Housing Plan approved last January 11th (which go further than assistance to independence) to confirm it. With these measures, Carme Chacon has been named as one of the politicians who has hurt the right to decent housing in our country the most.

From the Platform, we have made a detailed analysis of this reform, contrary to the spirit and recommendations of the UN report, which is resumed in the following lines.

Help in not reducing prices

According to the Decree of the Reform of the 2005-2008 Housing Plan, a promoter will receive 6,000 euros from the Treasury for each flat that he sells over a year and if it is destined to be rented. To better understand the consequences of this measure, it is as if the Ministry of Industry decided to give money to businesses such as Inditex or Cortrfiel to use the unsold garments for another purpose instead of putting them on sale.

According to the Bank of Spain, flats are overvalued by 30 % (according to The Economist , by 60%), and this is the reason that many promoters do not sell. For PVD, for once, the logic of the market can facilitate access to housing, and whether it is the Ministry itself that intervenes to avoid it after what has occurred these past years; it is simply improper. This measure is an example of the deception and the demagogy that extends to all levels of the administration and which negatively affects almost all the citizens in the long term.

The aim of public housing seems to be for promoters to gain money

It seems as if this is what Carme Chacon thinks. Another of the alternatives of the Reform of The Housing Plan is that promoters offer unsold flats on the free markets as public housing at an agreed price. For that, they have approved price increases of this kind that are scandalous (28% in Alicante or Zaragoza, or 20% in Madrid or Barcelona).

Moreover, this measure will increase the participation of the promoters in the management of public housing, which increases the risk that some promoters ask for “B quantities”. This custom, barely pursued within an environment of scandalous fraud, as the Gestha association remembers well, converts the social goal of public housing into a mere pantomime.

New increase in subsidized housing

On the other hand, with the excuse of incentivizing construction, the Ministry admitted a new increase in the reference price of subsidized housing, which will increase from 728 to 758 euros per square metre.

PVD wants to note that the price of the module has increased many times in the last years, and nonetheless, in percentage terms, fewer subsidized houses are being made than in the 80s. Moreover, from January to September 2007 the construction of subsidized housing fell by almost 7%. The conclusion is that increasing the price of the module does not encourage protected housing. It has increased because they give in to the interests of the promoters. Organisations such as FACUA consider the current reference price of subsidized housing is already “attractive enough.”

In any case, a serious administration cannot manage public housing by depending on the calculation of profits of promoters. Its final price should be based on the incomes of the people who receive the housing. If wages have barely increased, increasing the price of the subsidized housing represents contempt for the demanders and for the very principle of public housing.

Money for properties

The decree also includes 6,000 euros for the owner who puts his home up for rent. For PVD, while thousands of persons have problems renting a home, it is unacceptable to use large sums of public funds on a market that makes money. But, in this case the measure is particularly useless, since the maximum fixed prices for this type of shelter are similar to those of the market (for example, in Madrid, it costs a maximum of 960 euros for a 70 m2 flat). This means the measure will not even have the indirect effect of helping to reduce prices.

From PVD, we want to note that boosting the price of rent is not an end in itself. If within a few years the percentage of housing for rent doubles that of now, but the prices remain the same, they would not have facilitated access to living in now way at all.

Strengthening aid for purchasing

The decree increase the price of housing, but a buyer can opt for direct assistance in purchasing, as outlined in the 2005-2008 Housing Plan. The secondary effect of this measure is to protect the real estate bubble, while helping potential buyers “to get” inflated prices. For PVD, Chacon shows tremendous cynicism in speaking of incentivising rents while the decree clearly favours this assistance.

On direct rent assistance

Regarding the much-publicised direct rent assistance (basic independence income), which was presented days before this decree, for PVD, they have been a “smoke screen” to leave noise behind in the previous modifications to the Housing Plan.

But, time has also revealed our predictions: many owners increase their rent by between 100 and 200 euros, hoping that the person who rents will be under 30 and can possibly get assistance. On the other hand, it is discriminatory to leave out persons older than this age and to not distinguish if there is housing in a large city or in a small town, where 210 euros can do a lot more. On the contrary, other owners are now looking for people under 30 to be able to continue renting “of the books.” The situation is becoming extremely terrible and all to avoid a major regulation and checks that are inexcusable in face of a problem of this magnitude.

If the government wishes to support independence in a sustainable way, at a time leading up to elections, it should dedicate funds for the creation of a public-run housing park for rent at economical prices, like in the majority of European countries.

PVD asking for radical changes in housing policy

For the platform, the best housing policy is one that creates the framework so that the difference between income and housing prices (both sale and rental) is reasonable and stable on the edge of speculative tensions and economic cycles. This, along with the public housing park for youths and lower rents would be a step towards fulfilling article 47 of our constitution. For that, we demand that the new governor pays real attention to the UN recommendations and that he also pushes for structural changes in all those government’s requests, whose policies affect housing and town planning, with an aim of reducing the absurd relation between salaries and rental and purchasing prices of housing. In an aim to achieve this, various local committees of the platform have agreed on 40 suggestions that have since been transferred to the government, in the hope that they will serve to open a process of profound reflection directly for the future of housing policies in this country

Inter-Territorial committee


Related information :
  • Informe del relator especial sobre una vivienda adecuada de la ONU
  • 40 propuestas por una Vivienda Digna