David Lucas, Secretary General of the Urban Agenda and Housing, receives idealista/news in his office to review the current state of public housing in Spain. Lucas emphasizes the new public housing policy of the Government focused more on the segment of renting than on buying and selling and highlights the importance of increasing supply to reduce the price of houses. Despite this statement, the politician does not rule out intervening in the price of rent in areas of tension and after analysing the effects of covid-19.
How has covid-19 affected housing?
We believed from the beginning that it was going to have a significant impact and that is why we stopped the launches from the beginning, automatically extended the rental contracts, promoting agreements between landlords and tenants, as well as increasing the aid from the State Housing Plan and also establishing the possibility of financing for those people who could not reach agreements. We tried to prevent it from happening like in the previous crisis, but we will have to wait until everything is back to normal to see what the repercussions have been. We have extended the measures again until 31 January and hopefully they will be sufficient to try to contain the possible situations of economic vulnerability that are occurring or have already occurred in the population.
Are you considering extending the ban on evictions beyond 31 January?
We have been prudent and have been extending the ban on evictions for a while. First of all it was until the summer. Then we extended it until the end of September/beginning of October and now we have extended it until 31 January. We want to wait and see how the pandemic evolves and also the crisis that results from it before taking action if necessary. But there is enough time between now and 31 January to analyse it in the light of developments. We will talk about it again and if measures need to be taken, we will assess it.
Can arrears in the rental market increase?
From the data I receive and also from the contact I have permanently with the sector, I have been told that what has prevailed mainly have been agreements between landlords and tenants, whether with large holders or small property owners. Both the non-payment of rent and what could be the non-fulfilment of contracts are more subject to extreme vulnerability criteria. What is coming to me is that delinquency is not as high as originally expected, because the measures that have been implemented are working well.
Leaving aside the coronavirus factor, what is the panorama of social housing in Spain?
There has been a great effort on the part of the Public Administrations in the promotion of housing, but on a purchase-sale basis. More than two million homes have been promoted, which is very significant, but at the same time, affordable public housing for rent has not been a central element of action, when there is now a great demand for it. Only 290,000 homes in the current public housing stock are for rent. Unfortunately, many were lost because they were sold to investment funds at some point or were disqualified. But what is certain is that we must make a greater effort to ensure affordable public rental housing. And that is why, as a result of this analysis, the Spanish government began to promote the 20,000 Plan to influence the creation of stable public rental housing stock.
I am also aware that autonomous communities and town councils are also working along these lines, but what is clear from our housing policy over the years is that priority has been given to buying and selling rather than renting.
Do you think the rental price index has had any effect on the market?
Well, I think that the benchmark index system allowed us to have information, to have transparency and above all rigour, because it is equipped with more than two million pieces of data from the Tax Office, the Cadastre, the Land Registers, this Ministry and other bodies that allow us to have an evolutionary analysis of rental prices, quite surrounded by cadastral areas, which reduce the space a lot and allow for enormous and very positive information. It is true that this data is as taxable as it is due every year once the Personal Income Tax is settled, but it will become consistent with the projection over time and it is a magnificent instrument for establishing corrective measures, especially in terms of offering more homes in those areas that may be more stressed.
Will you use the rental price index to intervene in the market?
Well, we have signed agreements in the sense of establishing mechanisms that can contain rental income. I have always thought that the best policy is to increase the supply of rent. It is true that at the moment there are areas that are very tense, too tense, as the data shows, not only from the Ministry, but also from some portals that permanently show this. We do believe that right now, without knowing exactly how the covid-19 measures have behaved, how agreements have been reached between landlords and tenants, how prices have been modified (foreseeably downwards), how these prices have been reduced in many cases directly by agreements with landlords or even how the incorporation of the general rental market for tourist flats is affecting the market, we should wait to see how the market is doing in order to know what the tension is, where it is occurring and in which areas these price speculations are taking place.
Once we have that clearer picture if decisions need to be made, they will be made. I think we have to wait until we have that information.
So you don’t rule out the possibility of intervening in the price of rent?
Well, we have, as I said before, signed agreements. These agreements are there, although they were made before the covid and all I am saying is that we are going to see how the situation is, we are going to see how the market is behaving, we are going to see if decent housing is being guaranteed at affordable prices… Depending on what we determine, we will have to see what possible solution is left in terms of housing.
Is it more effective to increase the offer than to intervene in the rental price?
What I think is that we have to use instruments to guarantee the right to housing and I also know that, regardless of the offer, there are certain circumstances that have led to very speculative movements in housing in some areas, regardless of the existing offer or not. So, we are going to visualise how the situation is, we are going to see how the market is and based on that we will see if these areas with high rental prices continue to exist or if speculative movements with rental prices are taking place and from there, depending on this reality and the vision that we have in general, we will have to analyse the possible solutions.
Do you have any measures to encourage owners to put their empty homes on the market?
We will have to study this, but I think that, as you say, the best policy is to provide incentives, not to force them. Now that we are in a process with the Housing Law of prior public consultation, surely the contributions that are made to us and the debates to shape a possible draft will come out with these proposals. I am more in favour of seeing how we can encourage legal security and stability for these people to be willing to rent out their homes. You have to realise that 85% of them are smallholders who have their homes as an investment or as a way of saving the money they have been able to get throughout their lives with a lot of effort. Let’s see how we can find incentives to try and get these homes on the market at a reasonable price.
Is there a problem with squatting in Spain?
I want to analyse the problems in their entirety. It is true that the number of squats may have increased. The data from the General Council of the Judiciary testified, I don’t know if it is as much as some people say, but well, there has been an increase. Yes, I think that it is not so much a question of saying: ‘hey in 24 hours we are going to solve a problem’. The system, which right now is very expeditious, is five days. I believe that it is quicker to unblock a large part of the courts so that the processing is more agile or to focus on what could be mafias who are in charge of extorting owners with this type of action through police action or the Attorney General’s Office, as they have already shown that they are going to do. Because everything that has to do with economic and social vulnerability is on a much smaller scale with respect to this problem.
And I was saying that I want to see the problem in its full extent because I am as concerned about the problem of squatting as I am about the fact that there are many families who are homeless, who find themselves on the streets, who are evicted or who do not have the resources to pay the rent. And all those who every day are talking about giving solutions to squatting, I hope that one day they will also worry about all the people who are homeless or who have difficulties paying their rent, which is also a very interesting element of political action that they should look at from time to time.