'Housing associations', the model that is gaining ground to solve the weak point of affordable rentals

BarcelonaA few days ago, the European Commission presented its first-ever housing plan. One of its demands is to increase the stock of social and affordable housing, which has traditionally been associated with public housing. However, there are currently 25 million social and affordable rental apartments in Europe, equivalent to almost the entire state housing stock of 26 million. But these homes, spread across the continent, are not necessarily all public. If there is no administration behind them, who manages them?

"There isn't one specific model; each European region or country has its own typology: the Scandinavians, the French, the British, the Germans... In all of them, there is basically a type of voluntary private entity that agrees to promote and manage housing in a regulated market where it will have lower profits, but will have insurance from the public housing company of Navarre and author of The housing problem(Arpa Publishers). "When you look at these 25 million homes, you see many investors putting money into private partnerships," he adds.

These are known as housing associationsSocial housing, a central element of housing policy in much of Europe, is only now gaining traction in Spain, where it lacks a specific regulatory framework. The recent commitment by public administrations to creating large-scale subsidized housing now opens the door to its implementation, especially because it addresses one of the major weaknesses of this system: the financialization and, therefore, the long-term viability of promoting and managing rental housing. Currently, several entities across Spain, including in Catalonia, are working on a legislative proposal to regulate them. But what exactly are these entities? Why don't they exist in Spain?

Social Housing Providers

In general terms, the housing associations They are third-sector entities, with mixed or solely private capital, specializing in the provision, management, and development of social and affordable housing. They differ from a traditional developer or property manager because they are private, non-profit organizations that generally operate within a highly regulated framework and often benefit from direct public funding—such as subsidies, priority access to land, or loan guarantees—or indirect funding—such as tax incentives.

"The housing associations, "In France, these are called social housing providers, and they are organizations that clearly play a complementary or substitute role for the public sector in providing social housing. Here, we don't have them because we haven't had a history of social rental housing. We have 118 foundations linked to Cohabitat, as well as cooperatives, and there are entities that resemble what is called that in Europe," explains Carme Trilla, president of the Metropolitan Housing Observatory, who is also president of Habitat3 and manages public administrations to guarantee the right to decent housing for people in vulnerable situations. "There should be rental housing, but traditional developers aren't interested, and we are left with only public entities, which are few, and other non-profit developers, which are also few," Trilla elaborates.

A specific regulation

The commitment to public rental housing by the Spanish government and the Generalitat (Catalan government), focused on resolving the housing shortage in Catalonia and throughout Spain, has motivated the need for a specific legislative framework to enable the deployment of these entities. "A law is needed on housing associations that provides anti-speculative guarantees and limits profits. A legal framework is needed so that public and private capital and professionals can build and manage affordable rental housing in the long term,” argues Burón, who includes some European examples of this model in his book.

The key lies in a new legislative framework that incentivizes this model; that is, if you are a developer and social housing provider, you have the capacity to be a developer and social housing provider. They have drafted a bill that they will send to the Ministry of Housing and Urban Agenda for parliamentary review. Having come from the antagonistic policies of the Spanish government—which has implemented the housing law and the price cap—and the autonomous communities governed by the PP—which refuse to apply it—Burón is hopeful: “There are already enough operators with years of experience to tell the State that if it wants more.”