The problems considered in the above sections and, in particular, the increased visibility they acquired during the financial crisis have placed the difficulties of ensuring access to this basic asset at the top of the political debate. The attention is drawn, however, to the fact that whereas in other countries social policies on housing have been on the political agenda for some time, in Spain there has been less political recognition of this social problem.
Access to housing, and the need for public decisionmakers to intervene to make it universally available, is a right enshrined in the general legal frameworks of European countries. The EU Charter of Fundamental Rights (2000) establishes that the EU recognises and respects the right to social and housing assistance to ensure a decent existence for all those who lack sufficient resources, in accordance with the rules laid down by Community law and national laws and practices.
This general right is also included in the Magna Carta of most of the countries in the EU. In the case of Spain, the Constitution explicitly states that all Spaniards have a right to a decent and adequate home and that the public authorities must work to achieve the necessary conditions and establish the appropriate laws to enable this right to be fulfilled.
Housing policies are organised differently in each country. There are countries where regional authorities pursue most of the initiatives to facilitate access to this basic right. In other countries, it is the central government that leads public intervention in this sphere.
Governments have a range of options to ensure the fulfilment of these rights. These options can be grouped into two main types:
- Regulatory mechanisms: These facilitate a system of accessible prices by means of, for example, regulating land prices and rent levels.
- Budgetary mechanisms: These can generally be grouped into three core groups:
Financial assistance: This is offered to households to enable them to access a home, be it purchased or rented. This type of transfer increases the choices open to beneficiaries, but it has also been criticised on the grounds that it has an impact on housing prices by raising applicants’ spending power.
Subsidised housing: This is one of the most common types of intervention in European countries and may be public or private sector.
Income tax incentives for homeowners and tenants: These have become one of the most widespread measures in Spain in recent decades. The main problem with this approach is the difficulty of meeting the housing related needs of families on low incomes, since they generally do not benefit from assistance provided through personal income tax.
1. Spending on housing assistance
Most countries in the EU provide some kind of benefit to enable low-income families to cover the costs of maintaining or accessing a home. However, there are considerable differences in the investment of public resources that countries make and in the national trends in this spending. The United Kingdom, for example, invests far more than any other EU-28 country, with relative spending higher than 1.3% of GDP. The use of this instrument is also higher than the average in France and in most northern countries. In contrast, in countries in Eastern Europe, this type of assistance either does not exist or the spending levels are very low.
Spending on this type of assistance in Spain is considerably lower than the average of the EU-28 (less than half ) and, unlike in most European countries, it fell during the financial crisis. The budgetary difficulties faced by autonomous community authorities (due to a sharp drop in tax revenues as a result of the fall in income levels and consumption) and the serious rise in the number of people facing problems as a consequence of inadequate income (causing rising demand for financial benefits) led to intense pressure on programmes for which spending was already very low even before the crisis began.
It is unsurprising then, given the circumstances, that the effect of these benefits and assistance is very low in Spain, one of the group of countries where the impact is lowest. Anglophone and northern European countries, as well as France, stand out once again as states where housing assistance has the greatest impact in reducing the poverty rate. In Finland, the United Kingdom, Netherlands and France, the difference between the rates of poverty without this type of assistance and with it included in households’ disposable income is over 20%. This means that in these countries, this assistance has a major redistributive effect and it does indeed serve to remedy situations of poverty.
The effect in Spain is much lower than in the aforementioned countries (Spain occupies 22nd place in the ranking). In clear keeping with the cited reduction in spending, this effect fell, albeit slightly, in the period studied. Just 1% of the population receive this assistance – in northern countries, this figure is close to 15%– and the assistance per capita (total population) is less than 14 euros per year.
2. Subsidised housing
The second of the major instruments that help people to achieve their right to a home is policy on subsidised housing. Spain has traditionally opted for this kind of policy in preference to direct financial assistance. In recent decades, however, our country has leant more towards tax breaks for home purchases.
Encouraging access to home ownership by means of subsidised housing has had a major impact on other ways of meeting the social need for accommodation, with a rented housing market that is smaller and more expensive than in other countries due to the short supply. Added to this is the limited tradition and spending on policies that aim to foster access to a home by means of renting.
The result, in practice, combined with factors mentioned in previous sections, is that Spain is the EU country where rent accounts for the highest proportion of households’ disposable income and is, moreover, one of the three countries with the highest percentage of people bearing excessive rented housing costs.
Trilla and Bosch (2018) have identified four phases or periods in the evolution of subsidised housing in Spain.
- In the first period of growth in construction in Spain (1959-1965), subsidised housing amounted to as much as 70% of the total.
- In the years that followed up to 1981, there was a sharp decline in the volume of subsidised housing, which nevertheless still accounted for between 30% and 40% of all homes built.
- In the adjustment period of the first half of the 1980s, open-market and subsidised housing construction were almost the same.
- From the mid-1980s, the dramatic growth of the construction industry resulted in the declining importance of subsidised housing, which fell to below 20% of the total. This fall was also influenced by the increasing introduction of house purchase incentives, applied via the tax system, which became the dominant policy.
Ministry of Public Works statistics on new-build housing make it possible to draw a connection between the evolution in the past with the current situation. The figures show an ongoing fall in subsidised housing since the start of the financial crisis, to the extent that it has now reached historic lows. At the peak moments of the crisis, this type of housing once again accounted for a very high proportion of the total number of homes built despite the fall in the construction of new homes. As a result of the collapse of the sector, the construction of open-market housing fell to a volume seven times lower than before the downturn. In the economic recovery period, subsidised housing seems to have been abandoned as a housing policy instrument, with the lowest levels of construction since the 1950s.
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