Escrivá affirms that capping rental costs can have “undesirable” results | Economy | EUROtoday

The governor of the Bank of Spain, José Luis Escrivá, said this Friday that capping rental costs may have “undesirable” results. “On the issue of price caps, we lack evidence to evaluate them. There are not many experiences, there are some international ones with mixed effects. I believe a lot in evidence and I believe that a priori opinions have sometimes shown that reality later surpasses you. Therefore, we have to accumulate information, evaluate experiences,” he said in statements to Antenna 3. In addition, he has warned of the housing deficit in Spain due to the strong increase in demand. He has detailed that about 100,000 homes are produced each year and another 20,000 are renovated, but the number of homes generated annually doubles that figure, creating “a growing gap between the supply and demand of homes.”

“That is what sometimes puts pressure on prices upwards and creates a situation, clearly, of difficulty in finding housing solutions, in finding housing, whether renting or buying, for many people. This is a very serious problem that fundamentally requires closing this gap by producing much more housing,” stated the governor of the Bank of Spain. Furthermore, he mentioned that the problems are concentrated in large cities and among young people and immigrants, who are the ones who have the most difficulty finding homes in affordable conditions.

Regarding the regulation of rental prices – a measure approved in March in Catalonia that has reduced rents, but has caused the signing of contracts to fall more sharply – he added that sometimes there may be the case “in which effects undesirable, that is, that the legislator does not look for certain elements that end up occurring due to unexpected dynamics.” “This is what we have to detect here,” he added. In any case, the governor has assured that placing emphasis on prices and the ceiling on them “means not reflecting that the issue is that there’s a lack of housing” in Spain.

Lack of affordable housing

For this reason, Escrivá understands that it is necessary to develop a housing rental market in accessible conditions, which right now “has little or no improvement.” By the way, an analysis by the consulting firm Atlas Real Estate Analytics revealed this Wednesday that if Spain wants to balance its real estate market so that the effort rate (the percentage of their income that households allocate to paying for housing) does not exceed 30 %, 3.5 million affordable homes are needed. A result that exceeds the figure of 1.5 million public housing units that the Government has proposed to achieve, without a specific temporary goal, so that Spain equals the European average for social housing (9%).

“This is perhaps the main conclusion of the analyzes that we have done, and here I believe that it is very important to remember that all Public Administrations have responsibilities: the town councils, the communities and the central Administration, because it is an issue in which the most “Unlike any other, there is a need for coordination and joint work of all Administrations, from the municipal to the central,” he stressed.

Escrivá has indicated that not solely in Spain, however in all the encircling international locations, “there is usually a constitutional recognition that people have the right to live in decent conditions, and that also implies having access to housing in minimum conditions. ”. He has highlighted that “in European culture” social cohesion and social inclusion are crucial components. “That is why, in so many European countries, there are these rental markets in accessible conditions, where there is effectively an element of public aid to promote that element of social cohesion and I would say solidarity,” he concluded.