The post-Covid scenario does not eliminate challenges that must sooner or later be faced by the real estate sector
One of the major concerns of those who live in Barcelona is the limited supply of affordable housing in the Greater Barcelona metropolitan area. The Covid-19 crisis may bring some changes, but the city still needs agreements covering the entire Greater Barcelona Metropolitan Area to reverse this situation by expanding the stock of affordable housing for rent.
The Bank of Spain recently published a study entitled 'The housing market in Spain between 2014 and 2019' which suggested that public-private intervention is needed in the sector in order to increase the stock of rental properties. The main conclusion of the report is that the current rental market in Spain is unsustainable.
Within this context and with the fresh challenges prompted by the Covid-19 crisis, Barcelona, like many global cities, has to face one of the greatest challenges of all the great metropolises: access to housing. This is essential for a city like Barcelona, which must provide a satisfactory response to the needs of its citizens and attract and retain new talent.
The reality is that there is currently a huge shortage of reasonably-priced rental properties (costing less than one third of the tenant's salary) in the city. Moreover, in Barcelona it is striking that this has not been resolved despite the large volume of housing built before the economic crisis.
We will not generate different results if we continue with the same public policies as now. Barcelona has the chance to return to affordable housing only if it is able to develop a broad agreement covering the whole metropolitan area that enables the issue to be addressed.
New approaches must be proposed and measures promoted to resolve the situation in the medium term, without increasing public spending.
In 2019, Barcelona Global brought together more than 50 experts from various fields (town planners, architects, tax experts, financial institutions, etc.) to draw up a specific proposal that would serve as a basis on which to promote a Greater Barcelona metropolitan area agreement for affordable housing.
1st conclusion: the solution must cover the whole Greater Barcelona metropolitan area
To be effective, any housing policy in Barcelona must cover the entire metropolitan area. Only in this way will the challenges be solved in an efficient and sustainable way.
This 'metropolization' of housing policy must include the creation of specific measures for land management, granting of licenses, registers of applicants and suppliers and fiscal measures, all with a metropolitan dimension and scope.
There is a considerable political difficulty, however, in reaching the consensus needed to transform the Greater Barcelona Metropolitan Housing Consortium into a Greater Barcelona Metropolitan Housing Authority. But, if politics is about serving citizens, the time has surely come to demand that our leaders do their best to build the necessary consensus.
2nd conclusion: there must be a large stock of accessible housing for rent
There is a broad consensus that no more than one third of disposable income should be spent on housing so that people can meet other basic needs. The main priority of housing policy, therefore, must be to increase the supply of affordable housing significantly in the coming years.
Public-private partnership schemes are essential for mobilizing resources to create new social housing and new affordable housing.
As the impetus (not the investment) will be the responsibility of the public authorities, it makes sense to require that private investors keep the new supply of affordable housing available for affordable rent for a period of some 20-30 years.
Limiting the rental cost of new housing completely should eliminate any speculation in the development and management of this new type of housing.
The capital is available and investors are ready to invest in public-private partnership schemes to build thousands of affordable homes. For this to become a reality in Barcelona, it only needs to be promoted decisively and given solid legal foundations.
Barcelona Global's proposal requires a clear differentiation between the transformation of public land or protected housing, on the one hand, and the transformation of 'free' land, on the other, which will be required to be used for fixed-cost rental housing. proponemos discriminar positivamente que el uso final fuera vivienda de alquiler a un precio tasado.
This approach would not reduce the free housing available in the future, since it is precisely the introduction of long-term fixed-rate rents that should allow much more proactive management by the administration in the transformation of land, since the speculative component would be eliminated.
It is important to note that the conditions of access to this affordable housing should also be reviewable by the public authorities on a regular basis.
Social housing and 'free' housing
Social housing must be designed to enable access to housing for the most disadvantaged sections of society. Public authorities must play a leading role in promoting this type of housing. Some recommendations in this case would be: 1. That public budgets prioritize the promotion of social housing, 2. That public administrations do not finance their social housing policy by selling this housing, but that it should remain under rent, and 3. Access to this public social housing stock should be periodically reviewed.
As for “free” housing:this should be subject to the consequences of supply and demand dynamics. At Barcelona Global we believe that an effective housing policy should not place a tax burden on housing in order to try to lower its price. We have to take into account that housing is the main asset for many families and applying policies that reduce its value implies collective impoverishment.
One solution to free housing is creating a sufficient supply of affordable housing for rent, as is typical in advanced societies.
The changes and challenges that the Covid-19 crisis will bring to the real estate market are not yet clear, but the city will have to prepare itself as soon as possible to face a complex scenario.