A NEW war is being waged in Barcelona against investors and speculators who gathered for a summit in the city as rents and evictions continue to skyrocket.
Furious housing groups mobilised to protest The District, a recently held real estate summit that saw titans of the investment fund industry gather to discuss ‘opportunistic investments’, among other topics.
The fresh conflict is brewing just as Barcelona has been seeming to gain the upper hand in its decade-long struggle with tourist rental company Airbnb, which has been widely blamed for pushing up rents in the city.
Hundreds of activists managed to delay the opening of the summit, held at Fira Barcelona, by staging a sit-in, while riot police forcibly removed them in scenes reminiscent of the unsanctioned 2017 independence referendum.
Banners were unfurled that read ‘Let’s defend life, let’s stop The District’ and ‘Speculators get out of our neighbourhoods.’
Average rent prices have surged by 20.3% from last year, ‘far outpacing Spain’s 12-month inflation rate of 8.9%, Reuters report, while activist group Corriente Roja said such high inflation figures are ‘making it difficult for the most impoverished families to reach the end of the month’.
One activist claims there are 35,000 empty apartments owned by large profit-seeking landlords in Spain’s second largest city, while an eviction is taking place every 55 minutes.
More than 1,200 investors from investment funds, sovereign wealth funds and private equity funds – including US asset management goliath Blackstone and private equity colossus TPG – attended the summit, which hopes to become the ‘Davos’ of the real estate industry.
Others argue that Barcelona needs private investment to improve existing housing stock, as it has little room to build new housing stock and welcomes 27 million tourists a year, according to the town hall.
‘If you don’t increase the supply or quality of housing in the city, how do you improve access to housing?’ writes Mark Stücklin of Spanish Property Insight.
‘Rent controls do not incentivise landlords to produce more housing. So who will pay to build or renovate housing in sufficient numbers to make a difference?’
‘It’s a fact that housing is capital intensive, so you need a lot of money to build or renovate homes, especially in a city where land is scarce (expensive) and the planning system and taxes makes it even more costly.
‘The State can’t afford to provide all the housing that Barcelona needs, so private capital is essential.’
It is even possible that Barcelona’s militant housing groups will scare away the sorts of private investors the city needs to replenish its stock, paradoxically driving prices up, he argues.