Regional government to pay families up to 1,000 euros per month for a “dignified home”
The regional government of Andalucia is pioneering a scheme to guarantee people “decent housing” and to counteract the effects of Spain’s property crisis.
Lower income families will be assured of a place to live under the new Right to Housing Law (Ley del Derecho a la Vivienda) – without having to pay out as much as a third of the family income on mortgage or rent.
Under the scheme, the Junta plans to build 700,000 new homes within the next decade to satisfy the requirements of those struggling to rent their own place or get a foot on the property ladder.
However, the ambitious construction plans appear to contradict current attempts to curb urban growth: at present, the Junta is publicly stunting new construction through restrictive urban planning laws known as POTA (Plan de Ordenación del Territorio de Andalucía), which have been welcomed by environmental groups. Under this law, a municipality’s growth is restricted by 30 per cent over eight years.
Manuel Chaves, the socialist leader of the Andalucia government, explains that the Junta has the “autonomy and freedom to direct public funds towards what we consider to be necessary priorities – and one priority is housing.”
The government will therefore use funds from within Andalucia to subsidise the rent or purchase of property for families with a combined monthly income of 3,100 euros or less.
The Junta will also guarantee the poorest Andaluz families – those with an income of less than 500 euros per month – access to rented accommodation at 125 euros per month.
For those who earn more than 500 euros monthly, the Junta will provide rented or owned housing, provided that their income is not above 5.5 times the minimum wage – in other words, those who earn between 570 and 3,100 euros monthly.
The beneficiaries will pay one third of their total family income toward their rent or mortgage – hence the maximum a family will pay will be 1,000 euros per month – and the Junta will pay the rest, up to a further 1,000 euros.
The draft bill of the law – which is expected to come into force next March – puts local councils in charge of administering the changes. Each family will have to be means tested locally for them to receive the correct amount of assistance from the Junta.
Three million empty homes and nowhere to live
The property crisis debate in Spain has centered of late on the problems of over-building, provoking criticism over the reported three million empty dwellings across the country and worries over prices reducing. On the contrary, the Junta argue, there are not enough cheap homes and it will be necessary to build a further three quarters of a million properties in Andalucia over the next ten years.
Officials quote figures that state property prices rose in the region by 76 per cent between 1996 and 2002, leaving families spending almost 42 per cent of their monthly income on their mortgage – although this amount is far less than the national average of 50.9 per cent.
The Junta admits that Spain has been on a building drive in recent years. Until 2001, 150,000 were built every year nationwide. However in 2002, half a million new homes appeared even though only 300,000 were needed.
In Andalucia, around 50,000 new homes are needed each year, while 100,000 have been constructed – on average – per year since 2003.
According to the Junta, the difference is made up by those wanting second homes and speculators leaving properties empty. With the instability of shares and global markets, property has become, they say, a “refuge for investments of a varied nature.” There is also a considerable amount of land that has permission to build (“urbanizable”), which is retained speculatively by owners.
Without a doubt, says the Junta, there is no shortage of property in Spain or in Andalucia, neither is there a shortage of urbanizable land. However, there is a shortage of homes at affordable prices – which is why a large section of the population is prevented from owning their own property.
“Independent agencies,” officially affiliated with the Junta, will have the job of managing the new constructions and ensuring they have access to services, public amenities and access for the disabled.
The nation’s promoters and developers are hoping that the right to housing laws will effectively cancel out the restrictions imposed by the POTA legislation. The announcement of the proposed legislation was welcomed by the Andaluz federation of estate agents, Fadeco Promotores, whose spokesman Federico Muela showed his willingness to collaborate with the Junta in whichever way necessary.
He urged the Junta to “supply land so we can make all types of housing.” Muela continued by saying: “It is positive to legislate on housing to protect and help young people and the lowest earners to obtain a place to live.”
Fadeco has campaigned long against the Junta’s POTA law, claiming it “illegal and detrimental to the future of Andalucia.”
The collective of estate agents and developers have also claimed the new urban growth laws will force 45 per cent of Andalucia’s 1,000 constructors to leave the region, resulting in the loss of 4,000 jobs.