is the private rented market filling the role of social housing in spain? montserrat pareja-eastaway...
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Is the private rented market filling the role of social housing in Spain?
Montserrat Pareja-Eastaway University of Barcelona
and Teresa Sánchez Martinez
University of Granada
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
Since when?
Effects?
If so...
Why?
Outline
1. Introduction2. Approaching the private rented sector3. Social housing provision and rented
markets in Spain4. Consequences of PRM as a form of social
housing in Spain5. Conclusions
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
INTRODUCTION
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
• Decades of neglect of PR
• Particular perception of social housing provision in Spain
• Blurred edges of homeownership during expansion period
• Insecure housing in homeownership: highly exposure to financial vulnerability
• What’s the remaining role of PR in Spain?
APPROACHING THE PRIVATE RENTED SECTOR
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
Tenure evolution
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Source: ESLC, 2004-2013
2008: a turning point?
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Rented sector in Catalonia: number of contracts, rent per square metre
Supply side: what counts?
more than 74 per cent (private agents), 14.7 per cent (public institutions), 1.1 per cent (non-profit institutions), 10.7 per cent (other institutions, including employers)
(EU-SILC, 2013)
the problem of vacancies
Profitability in the rented market
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
Rented market returns (gross rent), public debt returns, and housing revaluation
Demand side: filling which role?
Allowing an early start in the housing career of young people. Late emancipation in Spain
Accommodating new types of households. Too scarce rented market in Spain to accommodate changes
Providing shelter to those that have recently arrived to the country. Overcrowded housing and homeownership
Alternative to homeownership for low-income households. Too scarce
Greater flexibility and mobility in the labour market. Out of the country
Stabilising housing prices. In Spain housing was left exposed to speculative market forces ENHR Wg. Private Rented Markets
LSE, London 19th-20th March
The private rented market has progressively changed its role in the Spanish housing system towards becoming a means for ‘social’ housing provision and ‘permanent’ housing…
…clearly induced by public intervention
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
SOCIAL HOUSING PROVISION AND RENTED MARKETS IN SPAIN
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Mismatch between supply and demand of social housing in Spain
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
Supply – finished dwellings – (*) and demand for subsidised housing (VPO), Catalonia, 2011-2014
Scarcity of social housing in Spain
(differences from Europe)Not a new phenomenon but a clear consequence of a long term strategy
No (rational) alternatives rather than homeownership for vulnerable households s
during expansion periods
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
Rented properties being privately owned are actually socially allocated
•Social Rent Agencies (transferring private rented dwellings to social rent) have not been set up as such in Spain but ‘Mediation networks’
•Social Housing Fund created in 2013 in Spain: dwelling repossessed by banks to be used as social housing
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
Private and social rent
CONSEQUENCES FOR PRMs OF PERFORMING THE ROLE OF SOCIAL HOUSING
AFTER THE CRISIS
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ENHR Wg. Private Rented Markets LSE, London 19th-20th March
Housing cost overburden rate (over 40 per cent of disposable income) (*)
Source: ESLC, 2004-2013(*) The category: ‘tenant, rent at reduced price or free’ includes rent-free housing. This fact causes a clear underestimation.
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
People at risk of poverty or social exclusion (under 60% of average median income) in the private rented sector, A and B
Source: ESLC, 2004-2013
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Arrears (mortgage or rent, utility bills, or hire purchase), 2005-2012
Source: ESLC, 2004-2013
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
Arrears by tenure
Source: ESLC, 2012
Evictions: total and in the rented sector
Arrears per tenure
Source: Consejo General del Poder Judicial (General Council of the Judiciary)
CONCLUSIONS
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
• The public provision of housing for vulnerable groups in Spain has functioned through the figure of homeownership, abandoning the idea of creating a decent and affordable social housing stock for those who need it.
• The boundary between what constitutes private rental housing and social rental housing is increasingly blurred.
• The question that remains unanswered is to what extent the rented market in Spain can meet all demands considering that today it represents only 12.3 per cent of the total housing stock.
• All in all, the figures suggest a new future housing scenario with even more blurred boundaries between private rented and social housing.
ENHR Wg. Private Rented Markets LSE, London 19th-20th March
Thank you!
ENHR Wg. Private Rented Markets LSE, London 19th-20th March