OCDE recommends more social renting, less taxation and rent regulation for Spain.

The Organization for Economic Cooperation and Development (OECD) suggests that the new government should fulfill its responsibilities in housing to ensure access to housing for families, especially young people. To increase housing supply, the OECD recommends expanding the very low social rental housing market, easing the rent price controls planned to be introduced by the Housing Act and registered for the first time, which failed in San Francisco or Berlin, or reducing taxes on the purchase and sale of housing or improving property valuation.

The OECD has evaluated the housing measures taken by Pedro Sánchez's coalition government, such as the Housing Law or the plan to build 184,000 public housing units, and compared them with other OECD countries. It becomes visible the progress and all that still needs to be done to achieve a sufficient level of housing affordability for the majority of Spaniards. "More than 60% of the population under the age of 34 live with their parents, mainly due to insufficient income and instability in the labor market," the study said. "Increasing the number of social housing units should be a priority, as the government has intended", but it warns that "it would be desirable" to have a clearer understanding of the planned timetable for the affordability of this important increase in public housing, which in Spain represents less than 2% of the total number of dwellings. But they have not only asked to know when they will be ready, but also recommend clear measures regarding access to housing tenures. "The increase in the number of social rental units should include clear rules and criteria for managing access to this type of housing, as well as regular checks on resources for access or systematic tracking of changes in eligibility," demand the authors of the text.

The OECD proposes a "long-term" plan to finance the construction of such affordable housing and its subsequent maintenance and improvement, such as is already happening with public housing in Denmark or Austria, with large public housing estates. "There is funding, such as reserve funds for housing, where the rent that tenants pay is reinvested into a fund to finance the construction and maintenance of these homes. In Austria and Denmark, financing is done through a combination of market loans and rents with government guarantees to keep borrowing costs low. for example, in Denmark, 2.8% of a tenant's rent is assigned to repay the loan and once the loan is repaid, it is used to fund repairs and improvements. In Slovakia or Slovenia, these are fully financed by the state," the study points out.

Increasing the supply of rental housing instead of price controls The OECD also calls for an increase in the supply of rental housing in areas where rental prices are highest and demand is strongest. What the Spanish Housing Law calls areas of strained housing markets applying rent price controls, the OECD is totally against. The Housing Law provides for a temporary cap on rent increases in stressed housing markets, which "could reduce the supply of rental housing, which is already low, and increase rents on a long-term basis, reducing people's mobility and blocking access for new generations," they emphasize. In fact, the OECD notes that Spain's rent regulation is one of the strictest among member countries, and additional restrictions could further reduce housing supply. "Such a restriction is mainly beneficial for existing tenants, but reduces investment returns for new developers, encouraging owners to leave the market and discouraging potential owners," the study declares.

Reducing taxes on housing transactions or updating the valuation of houses With regard to taxes, the OECD recalls the positive results of taxes on unused housing, which are already applied in Canada or France. And Spain wants to do the same. The Housing Law establishes that an additional tax on permanently unoccupied dwellings may be applied to dwellings that have been empty for more than two years and are owned by the owners of four or more such dwellings, except for justified reasons of temporary vacancy. Provides for an increase in the current tax, currently 50% of the net property tax levy, to a maximum of 150%, depending on the length of vacancy and the number of similarly vacant dwellings owned by the same owner in the urban area.

The study notes the case of Vancouver, Canada, where such a measure has been successful: the number of empty dwellings fell by 25% due to the strong imposition of the tax, but also due to the work done by the city to control and enforce the regulations. In Melbourne (Australia), it did not achieve the same results due to the lack of strict control measures, as noted by the OECD.

Other measures that the OECD suggests could also help to increase housing supply are frequent updates of property valuations for tax purposes. According to data from the Cadastre, only 5.5% of urban real estate has been revalued in the last five years. "Periodic updating of property valuations for tax purposes would create an incentive to make better use of the housing stock," the organization notes and cites as an example, "Some older families who live in large cities where property prices have increased significantly but are not updated for tax purposes would have an incentive to downsize or move, making room for younger families." "Spain could follow the example of other OECD countries that periodically review the value of land and real estate, including New Zealand, Lithuania, Denmark or Norway. They also note higher taxes on real estate transactions. "Transfer taxes in Spain are among the highest in the OECD, ranging from 6% to 10% of the property value, depending on the region. Reducing this tax would help increase mobility in the housing market, but this should be done gradually, especially for young families. With youth being the focus of this OECD report, "Spain must increase opportunities for young people. Strengthening education, facilitating young people's participation in the labor market, promoting entrepreneurship, and providing access to housing are important conditions for achieving potential