The housing crisis punishes SMEs: half give up growing due to the high cost of flats

BarcelonaThe housing crisis is also a drag on business growth. This is according to a report prepared by the SME Observatory of the Catalan employers' association of small and medium-sized enterprises, Pimec, which indicates that one out of every two businesses in the country has renounced applying growth measures – from expanding staff to opening new production centers – due to the residential pressure suffered by both the company and the workers.

The president of the Observatory, economist and professor at Pompeu Fabra University Oriol Amat, detailed at the presentation of the study how the current gap in the real estate market "slows down" business activity in the country. "If housing negatively impacts the business fabric, it impacts society and the ability of companies to generate well-being," stated Amat. In this regard, the entity warns that "the cost and availability of housing directly condition the functioning of the labor market and, therefore, the competitiveness of companies".

The report, based on a survey of more than 400 Catalan small and medium-sized enterprises, details the multitude of expansion decisions that the private sector has stopped making due to housing. More than 28% of those surveyed have limited staff expansions due to the surcharges and obstacles created by the extreme pressure on residential prices. More than 16% have stated that they have had to postpone expansion projects, while an additional nearly 14% have gone so far as to discard initiatives of this kind.

In addition, nearly 10% have shelved projects to open new workplaces and 6% state they have even considered moving one of these centers to a less pressured area. "It is the most difficult economic cost to see and, at the same time, the most relevant for the competitiveness of the territory," say those from the observatory.

Although Amat acknowledges that the limits to the growth of Catalan companies are multiple, the report points out that housing is the "deepest net predictor" for calculating whether a company will be able to undertake an expansion project. According to the Observatory's calculations, housing and mobility factors multiply by 3.4 the probability of "making any decision that limits growth". On the other hand, factors such as company size or geographical location "do not show significant net effects" that twist the arm of small and medium-sized business owners.

Salaries, time and transport

The analysis by Pimec experts reveals that many of the country's small and medium-sized enterprises have suffered setbacks, delays, or blockages in hiring due to causes linked to housing prices. According to Amat, approximately 83% of those consulted have noticed that potential employees have raised their salary expectations to cope with the rising costs of rent and residential purchases. In the same sample, 57% claim to have had to incur additional costs in filling open vacancies due to this same conflict. The housing emergency has caused, according to the Observatory, the private sector to have had to disburse an extra 5,500 euros in salary costs to fill its vacancies.

From the workforce's perspective, companies detect that the housing crisis particularly affects the most vulnerable employees: those with medium-low salaries – it is especially serious among salaries below 35,000 euros per year – and who perform tasks that require full-time presence. In this regard, Amat laments that SMEs are more exposed to this threat, as they have "less room" to increase salary offers, provide residential alternatives, or adapt working hours and attendance conditions.

In fact, according to the survey, nearly two-thirds of Catalan SMEs have seen candidates for filling relevant vacancies withdraw from a firm offer due to housing pressure. Furthermore, a third of employers lament "problems retaining staff" for these same reasons. Once again, it is the base of the labor pyramid that is most lost in this labyrinth: nearly half of the workers who choose to leave a company and cite these reasons are young people "at the beginning of their careers and with lower incomes than those who have been there longer."