Sareb has 9,275 available apartments in Catalonia: this is all we know about the transfer to the public company.

The Spanish government takes a further step to strengthen the State Housing Company (Sepes) after the legislative change that allows it to "manage and build housing". This Tuesday, the Council of Ministers approved the incorporation of more than 40,000 Sareb apartments into this public company. Of the total apartments, 9,257 are located in Catalonia, or 27.8%, according to data from the Ministry of Housing. Additionally, 2,400 plots of land with a capacity of 55,000 apartments are to be incorporated, according to the Ministry's calculations. The Spanish government's objective is for all of them to become part of the state's public housing stock—Spain has been at the bottom of the European list for years—and be allocated to social rentals. This measure adds to the list of formulas, especially rentals, that currently affect citizens. "The goal is to make these apartments available to families for affordable rentals," stated the Minister of Housing, Isabel Rodríguez, at a press conference after the Council of Ministers. The impact will not be immediate.

How many floors are we talking about?

The Ministry of Housing has identified more than 40,000 properties, as well as 2,400 plots of land where 55,000 apartments could be built. These plots are now in the hands of Sareb, which will become part of the Sepes (Spanish Housing Authority). The number of apartments already built alone is greater than the real estate assets currently held by Sareb (approximately 37,500 homes, as verified by ARA). The government's announcement includes more homes, taking into account the properties that Sareb expects to receive in the next two years from non-payments by developers or construction companies during the real estate boom, which are still being disputed in court.

Regarding the plots of land, Sareb has identified many more, but the Ministry of Housing only wants to include those for residential use and, therefore, excludes rural or industrial plots.

What is the status of the properties?

"SEPES has carried out an evaluation process for the land and buildings," reports the ministry headed by Isabel Rodríguez. This process took into account various factors of economic, legal, and technical viability. For example, in the case of technical criteria, the buildings were assessed for structural defects, compliance with urban planning legislation, and adequate habitability.

It should be noted that a large part of Sareb's apartments—the so-called bad bank– These are toxic assets from the housing crisis (unpaid apartments) that were weighing down bank accounts and that Sareb took over to refloat the financial institutions (and the economy). Beyond the possible reforms required over the years, some weren't even finished.

What is the timeline for the transfer?

The intention is to transfer these apartments from Sareb to Sepes as quickly as possible, although the government hasn't specified a timeline for their incorporation: "The procedure and pace of incorporation of the properties will be carried out in such a way as to allow for proper integration into Sepes's assets, taking into account the operational capacity and legal status of both entities," the ministry explains.

For now, the only deadline on the table is the planned dissolution of Sareb in 2027, so the identified properties and plots should be transferred before then. In any case, it is up to the Fund for the Orderly Restructuring of the Banking Sector (FROB) and, therefore, the Ministry of Economy to decide whether or not to extend their life.

Will the State have to pay Sareb?

During the press conference, Rodríguez stated that the transfer of the properties and plots of land will not entail any additional costs for the public coffers. "It is a donation of assets to the State," he said. Thus, Sepes will not pay for the properties it will receive, which, according to the ministry's calculations, are valued at 5.9 billion euros at current market prices.

However, sources consulted by ARA indicate that it is not so obvious that it will have no impact on the public coffers and point out that each apartment or plot of land owned by Sareb comes with a small portion of the mortgage (debt) assumed at the time by the so-called "Sareb" (Spanish Ministry of Public Works). bad bank and which today stands at €29 billion. In fact, it's worth remembering that in 2021 the European Commission forced the State to include Sareb in its debt as a guarantor.

"The donation doesn't mean that [Sareb's] debt will evaporate. You have to repay it at some point, and if that's not possible, the guarantor comes into play, which is the State and, therefore, the taxpayer," the same sources indicate. Last year, Sareb's managers already anticipated that it would be very difficult to repay the entire debt before its dissolution in 2027.

What has the government done so far?

Transferring the Sareb flats to the state public housing stock was a promise that Pedro Sánchez already made before the 2023 general elections. Sánchez then quantified the number of properties from the so-called bad bank at 50,000 (between apartments already built and those yet to be built).

However, the new public housing company came into play this January. The government announced the transfer of 3,300 properties and almost 2 million square meters of land to the entity (were assets of the general administration of the State), as well as the real estate assets held by Sareb. Sánchez spoke of an "immediate incorporation" of up to 13,000 homes (currently part of the 40,000 apartments announced). From now on, this number is expected to increase progressively.

Additional budget

Following the change in Sepes, the new public company also has priority when it comes to purchasing housing and public land. In this regard, the Council of Ministers approved an additional €593 million to complete the construction and renovation of buildings, as well as the purchase of land from the Ministry of Defense.

State Housing Plan

In parallel, the Spanish government has begun a round of technical meetings with the autonomous communities to channel the state housing plan for the 2027-2030 period, which focused, among other issues, on the Conference of Regional Presidents held in Barcelona on June 6. Sources from the Ministry of Housing explain that contacts have already been held with the Basque Country, Catalonia, Navarre, Asturias, the Canary Islands, and Galicia, and that all of them have joined the Conference's minimum agreement. Specifically, these communities have agreed to triple the plan's investment (up to 7 billion euros), which means that if the State contributes 60% of the budget, they will contribute the remaining 40%. It was also agreed to permanently protect the apartments financed with these funds so that they do not leave the public housing stock and to provide more official data on the residential market.

The ministry's intention is to convene a sectoral conference to reach a joint agreement, but given the reluctance of some PP regional governments, such as the Community of Madrid, the ministry will prioritize bilateral negotiations, the same sources explain.