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The government will promote the construction of 20,000 cheap rental homes

The Ministry of Development prepares a plan to increase the supply of rent and to moderate the prices

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The government will promote the construction of 20,000 cheap rental homes

More budget, regulatory changes and fiscal reform are three legs of broad plan with which Ministry of Development ensures that it wants to give a social turn to housing policies and whose main lines will announce today in Congress its owner, José Luis Ábalos. The goal is to avoid a new housing-price bubble that will destabilize economy again, move government sources, and help especially low-income families and young people.

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The package includes urgent measures aimed at alleviating increase in rental prices, which have been shot in large cities up to 50% in last four years due to intrusion of tourist rentals and revival of market Real estate. The government will launch an interministerial working group aimed at developing set of urgent policies on housing and rental.

Among initiatives that will be deployed by Ministry of Development is a plan of 20,000 housing for rent at affordable prices within four to six years. The state will promote construction of se 20,000 mostly public houses (although this is not closed and all possible formulas are to be studied, because important thing is that y are built fast) destined indefinitely to rent or assignment in use , with an income or limited price, in those cities of credited demand and where prices of rent are higher.

Palma de Mallorca, Las Palmas, Barcelona, Valencia, Madrid, Malaga, San Sebastián and Sevilla are cities that have experienced a greater increase in price of rent in last four years, which reaches 50% in islands, according to idealist data.

Last year we finished building in Spain 48,853 free housing and 4,938 of official protection, according to development data. At height of housing bubble, in 2007, almost 650,000 homes were built in a year.

The plan will be carried out in collaboration with Autonomous Communities and city councils, which identify and facilitate most suitable soils on which to raise se housing developments. The state will involve SEPES, public enterprise of soil, in this program, and contribute with its impulse and financial support. ICO will also play a role in design of se policies.

In short term, executive will promote a change of legal regime of rent, in order to reverse consequences of reform "liberalizing" that made PP in year 2013 of Law of urban leases. The time limits for compulsory and tacit extension of leases will be extended, probably by recovering those of law of 1994. That is, it is returned to forced extension up to five years. In 2013, PP lowered it to three years, which causes that when se are fulfilled owner can terminate contract or impose to tenant a strong increase of rent, which favors escalation of prices.

Legal reform will also establish reasonable limits on bails that are required of tenant by subscribing to a lease. It is to avoid that it has to contribute 2,000, 3,000 or up to 4,000 euros to be able to rent a house. Also, tenants will be protected if ir home is sold, because new owner must respect lease agreement.

Tax reform

The government wants to also operate directly on rental prices, and for that it will do a tax reform that contributes to stimulate supply of housing for rent and to moderate prices. Possibly from tax advantages to landlords who rent ir home at reasonable prices, as fixed proposed law that PSOE registered in Congress when he was still in opposition. But this initiative is open to negotiation with or groups, and especially with United we can, who do not convince tax incentives and proposes to introduce directly regulated control of prices by city councils. The PNV is opposed, instead, to toughen law of urban leases.

The ministry wants to optimize use of existing housing park and specify precisely what is meant by an empty house and what for a tourist for purposes of its regulation. Although re are already initiatives from some communities and municipalities underway, Government believes that state should try to harmonize m and set a criterion. Once defined, incorporation of empty houses into rental market will be encouraged through a catalogue of regulatory and fiscal measures whose non-specific content.

The PSOE's plan is also to extend aid already approved by government of Mariano Rajoy in March this year, in state Housing plan 2018-2021 and that Socialist executive wants to improve budgetaryally. The Socialists criticize notable economic reduction of housing policy items in general budgets. From state Plan from 2009 to 2012, funding has fallen by 40%. That plan dedicated 4.762 billion euros, while executive of PP for 2018-2021 allocated a total of 1.871 billion.

Improvements in conditions for aid

The PP approved in March a state Plan with aid to purchase and rent with somewhat restrictive conditions. This plan, with eight grant programs, will be revised to improve "substantially" conditions for access to aid, transfer sources of Socialist executive. Additional programs will also be studied.

With current plan, young people between 18 and 35 years old can access to a support of up to 50% of rent if ir annual income does not exceed 22,558.77 euros and monthly payment of house does not exceed 600 euros, with exceptions of up to 900 euros. For purchase, aid is of 20% of price of property, with a maximum of 10,800 euros, for under 35 years, with same income as in rent provided that house does not exceed 100,000 euros and is in a locality of up to 5,000 inhabitants.

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