Spanish government makes 50k foreclosed homes available for cheap rent
Skyrocketing rents are sweeping the globe locking young people out of leaving their parents home, with one government making a bold move to tackle the crisis.
A rental crisis is sweeping many countries across the world with Australians no stranger to the huge issue as rents are hiked by hundreds of dollars and a massive shortage of properties are seeing some people face homelessness.
It’s a serious problem that many in power seem to have few answers to solving immediately, particularly in Australia.
But one country is trying to get creative as it heads to the polls this year with the rising cost of rent slated to be a key election issue and the current government claiming it wants to set housing up as a “true right”.
In Spain, the government has introduced a 3 per cent a year rent cap but in a bolder move it has approved plans to make 50,000 foreclosed homes available to rent.
The homes are held by Spain’s government-backed “bad bank” Sareb – which was established in response to the financial crisis that hit the country’s banks 10 years ago.
The government plans to make the homes available with affordable rent as young people are forced to live with their parents for longer.
“Young people and the not-so-young can’t pay for their rented apartments,” Housing Minister Raquel Sanchez said. “We think it’s a measure that will work and it’s not the only one that we’re putting on the table.”
Economy Minister Nadia Calvino added that the plan aims to “guarantee more accessible housing for young people”.
Initially, Sareb’s property portfolio acquired from Spanish banks that fell into trouble were valued at approximately €50 million ($A81 million), but it has since managed to sell off around half of the assets in just over a decade, according to its website.
But the plan includes acquiring 21,000 vacant homes from Sareb bank to be transformed into public housing. Meanwhile, the government will also construct 15,000 homes on land owned by Sareb.
In the country, 16 per cent of young people live independently, compared to an average of 32 per cent in Europe, according to the Observatory of Emancipation.
In fact, the younger generation is not moving out of their parents home until an average age of 30 due to low wages and job availability making renting almost impossible.
However, critics have slammed the move as “populist” and said many of the 50,000 homes are only based in “ghost” towns where no one wants to live.
Like Australia, Spain is also struggling with a lack of public housing, with just 300,000 homes available meaning it makes up just 3 per cent of the total housing available – compared to 9 per cent in the European Union. This means it has one of the lowest levels of public housing in the EU.
But the government has an ambitious plan to own 20 per cent of the country’s housing stock within the next 20 years, it said.
Yet, popular holiday spots like on the Mediterranean coast are crippled by a lack of rentals as they are let out to holiday-makers instead.
This includes areas like in Malaga in southern Spain, where rents have increased by 20.4 per cent yet availability has fallen by 27 per cent in the first quarter from a year earlier.
What are they doing in London?
Other cities are also looking to tackle the crisis by thinking outside of the box.
By 2031, London will have a shortfall of 110,500 rental homes while tenants are leaving the capacity city at the highest rate in a decade as they are slugged by exorbitant rents.
Last year, 40 per cent of tenants who were moving home chose to leave the capital, up from 28 per cent just 10 years ago.
Protests have been organised as groups campaign for abolition of no-fault evictions, which were previously promised by the government.
One proposal is a so-called “dob on my neighbour scheme” raised by Westminster City Council in central London.
Under the London proposal, residents of the Westminster borough would be able to use a hotline to report a neighbouring property that was vacant for half the year, with the scheme put forward after research found a 123 per cent jump in long-term empty residential properties from 2021-22.
A similar scheme is also in place in Jersey, while the state of New York in the US also set up a consumer hotline to help residents report “zombie” homes in recent years.
The situation in Australia
In Australia, there were nearly 11 million private dwellings counted in the 2021 Census, but shockingly, 1,043,776 of those have nobody living in them.
However, Maiy Azize, spokeswoman from the Everybody’s Home campaign – a coalition of housing, homelessness and welfare organisations – told news.com.au she didn’t believe a hotline was the answer.
“Australians shouldn’t be relying on hotlines from neighbours to provide them with homes,” Ms Azize said.
“About 10 per cent of homes in Australia are empty. Some are holiday homes, some are awaiting new tenants, and some are unliveable.
“Even if all of Australia’s vacant homes were provided to renters, most wouldn’t be affordable – and there would still be many more renters in need than homes that can be moved into.”
With around one-third of all Australians trapped in the rental market, warnings have been issued that skyrocketing rents and ultra-low vacancy rates are going to continue to smash tenants for years to come.
The rental crisis shows no sign of being resolved in the immediate future as tenants are forced to cop rent rises – on average of more than 20 per cent – or to compete in a market where there are barely any properties available, according to a rental report from the Reserve Bank of Australia (RBA).
The grim research showed rental prices will continue to soar due to a high demand for properties, a lack of new building and investment, as well as the increase in immigration.
It found around 240,000 people are expected to migrate to Australia in the coming year – which the research said equates to an extra 96,000 properties needed.
Campaign groups have called on the Australian federal government to invest in 25,000 social homes every year to end our huge shortfall of social and affordable rentals.
Build to rent
Meanwhile, a new study commissioned by the Property Council of Australia showed build-to-rent homes could deliver 150,000 new apartments over 10 years and help address Australia’s stark housing affordability challenges.
The study by EY, released a month ahead of the federal budget, found the move could significantly help the Australian government hit its ambitious one million homes housing target by 2029, and significantly ease pressures in the rental market.
The report also revealed build-to-rent housing, which is relatively new to the Australian residential market, is currently worth $16.8 billion but that could increase a whopping $290 billion sector.
It would see the creation of up to 350,000 new apartments in the best case scenario.
Property Council of Australia chief executive Mike Zorbas said build-to-rent housing is the missing ingredient in Australia’s housing mix.
“With a 79,300-home deficit to 2033, Australia needs better planning, more land supply, proper housing targets and a national strategy on build-to-rent and purpose-built student accommodation,” Mr Zorbas said.
“The potential to create 150,000 homes over the next 10 years with just one asset class shows build-to-rent is about as close to a housing policy silver bullet as they come.
“Australia is grappling with a worsening housing affordability crisis where state governments miss their housing targets and planning systems fail to keep up.
“More supply means downward pressure on the cost of renting and buying, and people who live in build-to-rent housing will enjoy the benefits of professionally managed properties, good locations, superior amenities and long-term security of tenure.”
In the US, there are more than 20 million build-to-rent housing units, representing 12 per cent of the country’s total housing stock.
In the UK, the build-to-rent sector has grown exponentially in recent years from 47,000 units in 2016 to over 240,000 in 2022.
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