The fine print behind the government's big housing plan

Barcelona"Every stone makes a wall." This proverb, which has become a motto in President Salvador Illa's office, fits both literally and figuratively with the Catalan government's strategy to resolve the housing crisis. Beyond regulating the existing market, with measures such as limiting seasonal and room rentals—which Parliament... has approved this week—or curbing speculation—the legislature is geared towards the mass construction of housing, especially public housing. This commitment has been expressed with two grandiose figures, which the president himself announced in the Catalan Parliament a year apart: the 50,000 plan and the 214,000 plan.

Details of the Government's housing construction plan

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These are the two paths that the Catalan executive has devised to increase the housing stock, in order to resolve what is included in the Sectoral territorial plan for housing in Catalonia The Territorial Plan for Housing and Sustainable Housing (PTSH), a 500-page document approved in October 2024 after three years of development and fourteen years of delay, stems from a 2007 law that established the need for a territorial plan to coordinate housing policies. One of the most significant conclusions drawn from this document is the large gap between the number of homes created annually in Catalonia and the number built: it is projected that up to 355,000 households will be excluded from the housing market in the next fifteen years. To remedy this, the plan defines, among others, the municipalities that are areas of strong and proven demand, which will have to reach, within twenty years, the goal of urban solidarity; that is, that 15% of citizens live in affordable housing, thanks to some form of public intervention. According to the PTSH itself, it is estimated that more than 300,000 homes will have to meet this condition by the end of the period.

First phase: safeguarding public housing

It is in this context that the Catalan Government (Generalitat) proposed the 50,000 Plan, which outlines the Generalitat's contribution to achieving the urban solidarity goals for the next five years. The objective is to promote the construction of 50,000 subsidized rental apartments by 2030 by identifying building plots—that is, fully developed land with all urban planning and development procedures completed—ready for construction. These plots are being identified thanks to the participation of local councils in the public land reservation process. The Government launched the first call for proposals at the beginning of the year, which yielded 666 plots for approximately 22,241 subsidized housing units. A second call, focused on smaller municipalities, is planned for the end of this year or the beginning of next year and will consist of subdivided plots to facilitate the project. Of the 22,241 plots, 65% (14,398) already have a developer assigned. However, the number of finalized plots – that is, those that met the requirements – was set at 315, with a capacity for 14,087 homes, and the Generalitat published the first call for aid to developers and municipalities for the construction of the apartments in July. But the 50,000 plan also draws on other measures that, according to the Government, have meant that 31,000 homes already have the process "underway." This does not mean that construction has begun. On the one hand, there are 22,241 homes – if all the identified plots are taken into account – which are added to the 4,000 that Incasòl is building, the 3,000 that the municipalities are building with Next Generation funds, and the 1,800 that have been purchased from banks and funds, including InmoCaixa. The remaining 18,960 projects to reach the 50,000 target are still pending, leading the sector to believe that the 2030 deadline may be premature.

A 30-year financial structure

The truth is that, for the moment, what's really underway are the 14,087 homes for which there's a call for applications for subsidies for developers and municipalities to build the apartments, totaling 2.7 billion euros. This amount has been budgeted until 2059 for these 14,087 homes, and it comes from the sum of the 1.863 billion euros that the Generalitat (Catalan government) will pay to developers until 2059 in the form of a subsidy so that they all receive a monthly rent of 10.65 euros per apartment. This is what's called the rent differential, designed to compensate developers who build rental properties in areas where the price per square meter is below the stipulated 10.65 euros. If, for example, in an area within Zone 4 of Catalonia, the price per square meter is €6.61, the Catalan government will pay €4.04—the amount needed to reach €10.65—to the developer. This formula aims to guarantee affordability for tenants, who will ultimately pay the full €6.61. The €1.863 billion allocated until 2059 represents a portion of the €2.7 billion budgeted for the 14,087 homes. The remaining €835.8 million corresponds to subsidized financing for the development of officially protected housing, meaning a subsidy provided by the Catalan Finance Institute (ICF) to developers. In this case, the subsidy will extend until 2049. All these calculations are based on the same starting point: the estimated construction cost per home is approximately €150,000.

This financial engineering consists of cost flattening: instead of the developer or the Generalitat assuming the direct investment in construction – estimated at these 150,000 euros per apartment – the administration acts as a guarantor of profitability, which allows the mobilization of billions of euros. Second phase: the land factory for the 214,000 plan

While the announcement of the 50,000-unit plan came in October 2024, the 214,000-unit plan arrived exactly one year later, and in the same manner: Isla announcing the grandiose figure from the Parliament's podium. This figure doesn't represent the number of homes this government will build, but rather an estimate of the approximate potential housing that could be built across 179 planning sectors distributed throughout Catalonia.

While the 50,000-unit plan considers a first level of available plots, with a deadline of 2030, the 214,000-unit plan includes levels two, three, and four, and groups together land—meaning there is territory that is not yet ready for construction. Building, broadly speaking, involves three phases: planning, urban development management, and urbanization. Thus, the more than 200,000 potential homes are those that Catalonia can begin developing right from the start, within which the government has dubbed the New Strategy for Priority Planning Sectors.

The 179 sectors identified throughout Catalonia are plots of land that were, in many cases, blocked by litigation, lack of investment in urbanization, or endless bureaucratic procedures. Level 2 sectors have approved planning and land readjustment completed, lacking only the infrastructure work, with a potential capacity for 22,619 homes. Level 3 includes land with approved planning but pending administrative procedures such as land readjustment, with a potential capacity for 38,008 homes. The final level, the most undeveloped and with the most comprehensive plan, comprises sectors requiring new planning or significant modifications. According to Territori's reports, this level has a projected potential of 108,676 homes, but could reach 140,000, a 30% increase.

An estimate of buildable homes

Therefore, the figure of 214,000 homes is a potential estimate, as the government's goal is for all 179 sectors to be transformed into building plots by 2030. This does not mean they will be built upon, but rather ready for construction. Of this total, approximately 100,000 homes will be officially protected housing (VPO), and of these, half will be designated for affordable rental. These identified sectors are mostly located in the Barcelona metropolitan area (41) and the Greater Barcelona metropolitan area (48). Some examples include the Fecsa Endesa sector and the area around the Colonia Güell in Sant Boi, Can Ametller in Sant Cugat, and Santa Coloma de Cervelló. Also included are Sector 129 in Granollers, Les Bassetes in Vilafranca, and the Eixample Nord in Vilanova i la Geltrú. The remaining sectors are located in Camp de Tarragona (22), Barcelona (18), Ponent (12), the central regions (10), and the rest of Catalonia. "The distribution reflects the intensity of housing demand and the availability of land foreseen by current planning regulations," explained the Minister of Territory, Sílvia Paneque, this week.

The dance of figures and promises

From Silvia Paneque's press conference explaining the 179 sectors, the government's forecast emerged: it will mobilize 8 billion euros to build approximately 100,000 of the 214,000 homes designated as social housing. The truth is that Isla's administration committed to investing around 4.4 billion euros to build the homes in the 50,000-unit plan, which would amount to 1,100 units per year. However, these calculations include other aspects of the plan, such as emancipation grants and loans, according to sources within the Generalitat (Valencian regional government). Other government sources have not clarified whether the 8 billion euro figure is final. The relationship between the two plans – 50,000 and 214,000 – with figures that will vary slightly, lies in the Government's promise to bring the first number of homes to the public rental housing market before 2030 and to have the plots ready that same year so that the second number can be built. In fact, there may be some overlap, since the plots of land in level 2 that are developed could eventually be included in the 50,000 plan if construction begins on schedule.