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Frank Gavurin reports on more action on empty homes in Spain

The month of July saw plenty of activity in Spain’s local and regional housing policy, as authorities step up their efforts to combat speculation and fill the country’s huge number of vacant homes.

Firstly, the Valencian regional government has decided to use its right of first refusal on a huge sale of housing by Sabadell bank to the American private equity firm or ‘vulture fund’ Cerberus.[1] Due to legislation from 2004, the government had six months from when Sabadell gave notice of their intention to close the sale to decide whether to exercise their right of first refusal.

Ultimately, the government elected to purchase 218 of the homes involved in the sale for a total of €8.5 million – a discount of 25% from the value estimated by the regional tax authority[2] – and use them to boost local social housing stock. The homes in question had 95 families living in them, who would otherwise have found themselves renting from a vulture fund; a far from ideal situation, given these funds’ often unscrupulous practices in Spain[3] [4] [5] and elsewhere.[6] [7] [8]

Travel north up Spain’s Mediterranean coast and one finds just as fierce a battle against property speculators, and new policy initiatives just as brave. Barcelona’s city council, led by mayor Ada Colau, has made housing a priority in a city suffering a serious affordability crisis[9].

On a few rare occasions, the city had expropriated the use of homes left empty.[10] But empowered by Catalan regional legislation from last year, the municipality is now able to purchase vacant properties outright, and at a discount of 50%. Earlier this month, it notified 14 large-scale property owners, altogether in possession of 194 flats, that they would be forced to sell these homes to the council if they did not find tenants within a month.[11] Combined with the possibility of fines of up to €900,000 for non-compliant owners[12], the threat of expropriation could be a game changer.

The actions of these two authorities are a welcome step, and a reminder that, especially in the time of coronavirus, housing must be a right, not an asset.

[1] https://www.idealista.com/news/inmobiliario/vivienda/2020/07/15/785304-la-generalitat-valenciana-frena-la-venta-de-218-viviendas-del-sabadell-a-cerberus

[2] https://www.eldiario.es/comunitat-valenciana/politica/gobierno-valenciano-interviene-venta-218-pisos-fondo-buitre-destinarlos-vivienda-social_1_6094275.html

[3] https://english.elpais.com/elpais/2016/04/06/inenglish/1459935560_053995.html

[4] https://english.elpais.com/elpais/2014/07/02/inenglish/1404295928_785281.html

[5] https://elpais.com/ccaa/2018/12/28/madrid/1546013245_456118.html

[6] https://www.theguardian.com/us-news/2019/mar/26/blackstone-group-accused-global-housing-crisis-un

[7] https://www.ft.com/content/8d559d8c-f3a3-11e6-8758-6876151821a6

[8] https://www.pbp.ie/vulture-fund-cerberus-behind-collapse-of-social-housing-projects/

[9] https://english.elpais.com/elpais/2019/08/08/inenglish/1565257958_272074.html

[10] https://www.elmundo.es/cataluna/2019/06/21/5d0cb9b221efa07e0d8b469c.html

[11] https://www.elperiodico.com/es/barcelona/20200713/barcelona-amenaza-con-expropiar-194-pisos-vacios-si-no-se-ponen-en-alquiler-8038333

[12] https://www.bloomberg.com/news/articles/2020-07-16/to-fill-vacant-units-barcelona-seizes-apartments