Anatomy of a housing problem in Spain

The housing problem in Spain, uneven between regions, starts with current salaries barely enough to rent or buy a home. The average annual gross salary in Spain is €25,165 (INE 2020), but the most common annual gross salary is €18,480, which equates to 12 annual payments of €1,276 net for a young person under 30 with no children. With such a salary it is very difficult to find affordable housing to rent or own in Spain's major cities. This problem has been exacerbated over the past year with rising prices and rising interest rates.

The ideal budget spending standard indicates that no more than 30% should be spent on housing (rent or mortgage payment), which is 383''Euros from the most common salary. With this amount, a person can only hope to live in a shared apartment, and it would be a big challenge for a couple to find a place to live with a monthly rent of 766 euros. In fact, the Bank of Spain said this week that Spaniards spend an average of 40% of their income on rent, with no region below 30%, the fourth highest percentage in the EU, only the Greeks, Dutch and Belgians spend more, and the Germans, whom everyone admires, spend less than 15%.

The price of rent in Spain is due to a surge in demand. In the last decade, the Bank of Spain has seen an estimated 800,000 more households (two million people) living in rented dwellings, so that now in 2021 24.2%''families live in housing not owned by them, compared to an average of 30% in the EU. This increase in renting is due to young people entering the labor market after the last financial crisis with lower wages and high instability. In 2021, 42% of households where the person who is a member is between 30 and 44 years old did not own their home, an increase of 15 percentage points from ten years ago.

This increase in young renters comes at a time of rising prices due to increased demand not only from this group, but also from the expansion of tourist accommodation and even office space, as well as the practical lack of social housing for rent. According to the Ministry''Transport, mobility and urban management, Spain has only 290,000 public housing units dedicated to social renting, representing a paltry 1.6%, which compares to an average of 7.5% in the EU, where the Netherlands stands out with 34.1%. This increase in the rental share is a direct consequence of the difficulty of buying a home rather than a change in preferences. The development of sales in recent years is related to the property crisis that emerged in 2009, which led to a huge number of empty (3.4 million, according to INE 2011 data) and unfinished houses, which plunged the construction industry into waiting to assimilate the accumulated stock.

In the ten-year period from 2010 to 2020, 931,726 dwellings were completed in Spain, the lowest figure in''many decades, while 5.4 million homes were completed in the previous decade.

From 1982 to 1987, which coincides with the first years of Felipe González's PSOE socialist party government, more than half of the housing units built were public, reaching a record high of 67.2 percent in 1985. During the bubble period, the share of public housing fell to 10%.

The average cost of free housing last year was €1,740 per square meter'' (€2,050 for a new dwelling), which is €600 more than the cost of public housing. Consequently, public housing is 34% cheaper and in some cases, such as Madrid, Barcelona and the Basque country, Gipuzkoia being the most extreme case, public housing is 60% cheaper than free housing.

In the first nine months of last year, 76,597 dwellings were completed in Spain, of which only 13,059, that is 17%, are public housing, half of them still with a temporary classification. Only 25% of public housing is for rent.

It seems obvious, then, that if governments (national, regional and municipal, which all have powers) want to deal with this''problem, they need to take action that will affect two areas: the final cost and the amount of housing available for both purchase and rental. The shortest and most effective way points to building more public housing for sale and creating a fleet of private and public sector rental housing to cover the needs of families at risk of exclusion.

The dynamics of the market, and so says the Bank of Spain, is not about trying cosmetic tricks, such as setting price limits in certain areas. There is already experience in other countries and here in Catalonia that demonstrates that this is ineffective. It also makes little sense to make it easier to buy by increasing debt''buyers. Buying a home by financing 100% of the cost is a game of roulette. The guarantee of parents or the state does not exempt from payment, unless an appeal to informality is considered. Direct rental or purchase subsidies are more desirable than closing insolvency with a guarantee that may have to be honored.

The pandemic has shown that a home, owned or rented, is the best shelter for a person. Compete in the solutions offered, but please do not use the very dream of the individual, the family, for selective purposes.