The creation of affordable housing in Spain, like in many European countries, is one of the most pressing social challenges. Now, the long-awaited public housing company is taking concrete shape, initiated under the leadership of the Director General of the Public Land Business Entity (Sepes), Leire Iglesias. This ambitious project promises a fundamental transformation of the housing market by guaranteeing rents that do not exceed 30% of the average family income. An important step to ensure the right to housing for all citizens and to counteract the strained real estate market.
The Transformation of Sepes: From Land Manager to Housing Provider
Leire Iglesias explained the far-reaching plans for the transformation of Sepes before the Housing Commission of the Congress of Deputies on Wednesday. The company, which was previously mainly responsible for the development and sale of land, will now be integrated into the complete housing cycle. This means that everything from the planning and urbanization of the land to construction, key handover, and subsequent rental management will be handled by a single entity.
“We will move from planning and urbanizing land and subsequently selling it to a third party, to planning, urbanizing, building, and managing a state-owned stock of affordable housing that we currently lack,” Iglesias emphasized. She expressed confidence that the new public limited company will prove that the management of affordable housing can be profitable. The guaranteed rent cap of 30% of the average income or the estimated rent of the typical housing unit in the respective region is a core element of this strategy.
Focus on State-Owned Properties: Sareb and Further Transfers
A crucial step in implementing this project is the transfer of all state-owned land and properties to the new company. This also includes a large part of the portfolio of Sareb (the so-called “bad bank”), which was established after the financial crisis to manage non-performing real estate loans. The exact technical criteria for this transfer and the number of affected properties will be announced in the coming days.
Special priority will be given to properties in areas declared as stress areas as well as in Valencia, to promote recovery after the devastating DANA storms. Iglesias explicitly named Catalonia, Navarra, Asturias, the Basque Country, Galicia, and Valencia as initial focus regions, with Sepes having already acquired around thirty properties in the DANA-affected areas.
Political Debate: “Smoke Screen” or Real Change?
As expected, the government’s plans have also met with criticism. PP MP Joan Mesquida accused the government of merely “shuffling assets from one place to another just to make you dizzy” and spoke of “pure smoke.” He criticized that the government “is playing out the accounting change without truly investing in housing.”
Leire Iglesias firmly rejected these accusations: “It is not a change in accounting; it is a different destiny. It is not a change of pocket, but a change of purpose.” She emphasized that the new company will prioritize the social function of housing and will not, like Sareb, primarily aim to sell properties to refinance the bank bailout. Instead, these homes will be made available to the Autonomous Communities to address concerns regarding state powers in managing public housing stock.
Long-Term Protection and Acceleration of Construction Processes
The Director General stressed the need for permanent protection of properties subsidized with public funds. She reminded that the PSOE had introduced a bill in May to prevent Sepes homes from being sold by municipalities beyond the limited price modules. “What is achieved through everyone’s effort must always guarantee its social function,” she defended.
Iglesias also regretted the Congress’s refusal to amend the land law, which, in her opinion, hinders the acceleration of land development processes. “Houses are not built quickly in any location; we need urbanized spaces that allow this, and countercyclical policies enable the acceleration of construction times,” she explained. Sepes is currently a “healthy” publicly listed company that plays an important role in the affordable rental plan promoted by the Ministry of Housing. This plan already foresees the construction of over 20,000 properties, with rents expected to range between 5 and 11 euros per square meter, depending on the rental prices in the respective region.
