A resounding victory for social rent housing in Spain. The Spanish Supreme Court annuls the sale of 3,000 social rent homes to a vulture fund

A resounding victory for social rent housing in Spain. The Spanish Supreme Court annuls the sale of 3,000 social rent homes to a vulture fund

12 December Spain.

El Pais (1) reports that the Spanish Supreme Court has ruled illegal the sale of 3,000 social rent homes to what is called a ‘vulture fund’ of Goldman Sachs in 2013. 

The ‘vulture funds’ are so called because they buy up the debt/assets of institutions or countries in trouble at very low prices and then either demand the full value of the debt or sell it to make a super profit.

The 3,000 social rent homes were sold in 2013 by Madrid Housing (IVIMA) to Encasa Cibeles, an investment fund of Goldman Sachs.

The Supreme Court said that it was illegal for  the public housing authority, the IVIMA, to sell social rent homes unless they could show that the 3,000 homes were no longer necessary to fulfil the social purpose of the housing authority. 

This would be impossible; Spain is still in the grip of a huge housing crisis with large numbers of evictions of mortgage-payers and spiralling rents. 

As in the UK, the process of ‘financialisation’ of housing is in full swing (2).

El Pais reports that 1,159 apartments have been already sold – 505 on the free market and 654 to original tenants at preferential prices.

The absurdity of selling social housing in the middle of housing crisis

One of the lawyers who won the case is reported as saying: ‘Now we have the long road to get this decision carried out, we will ask for the entire sale to be revoked.”

Another lawyer, quoted in El Diario, was clear about the absurdity of what IVIMA had done:

“It is an absurdity that, when you have an obligation to give protection to a vulnerable group, you then sell the very housing with which you protect that group. That means you leave many people on the streets either through ignorance, or bad faith (3).”

But here in the UK, housing associations continue to sell social rent homes. 

Housing activists will note that the difference here in the UK.  

Morally-bankrupt housing associations still working closely with the Conservative Government and with financial institutions to sell social rent homes or convert them to higher ‘affordable’ rent homes. But without any intervention by the courts. And of course no action from the Regulator of Social Housing.

This is the ‘absurdity’ that the Spanish lawyer is talking about.

Losses of social rent homes through sales and ‘conversions’ (4) are projected to rise to 230,000 by 2020 – 158,642 council homes and 70,972 housing association homes (5) according to the Chartered Institute of Housing. 

Notes:

  1. https://elpais.com/ccaa/2019/12/12/madrid/1576168137_552059.html
  1. For more information on ‘financialisation’ see HARA’s website: http://haresidentsaction.org.uk/social-rent-homes/why-is-there-a-housing-crisis-why-are-we-under-attack-and-what-the-heck-is-financialistion/

(3) https://www.eldiario.es/madrid/vendieron-viviendas-publicas-certeza-controlarles_0_780072879.html

(4) ‘Conversion’ – when a housing association gets rid of a social rent home (at about 30% of market rent) by transforming it into a so-called ‘affordable rent’ home (at up to 80% of market rent).

(5) http://www.cih.org/news-article/display/vpathDCR/templatedata/cih/news-article/data More_than_150000_homes_for_social_rent_lost_in_just_five_years_new_analysis_reveals

 

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