Reluctance of communities to touch their price caps for subsidized housing

The real estate sector is raising questions again government plans so new developments allocate 40% of land for subsidized housing (VPO). According to the criticism of the Valuation Society, many autonomous communities still do not update the modules that determine the maximum price at which a house of this type can be sold.

A cap that has become obsolete in the face of ever-increasing growth construction costs, with a lack of labor and supplies and an increase in the price of raw materials with the outbreak of war in Ukraine. The data shows that these costs have increased by 8% in the past year and close to 27% since 2019. 1,201 euros per square meter.

works without margin

Except in some regions such as the Basque Country or La Rioja where these price limits have been updated, there are still territories where protected land cannot be put on the market because it does not generate a margin. “It’s practically impossible to build at the current level of costs,” insists Consuelo Villanueva, director of institutions and large accounts for the Appraisal Society.

In addition, the very scarcity of new construction also affects the decline of VPO, which in Spain constitutes a large part of private ownership. Construction is six times less today than 15 years ago, experts say. Specifically, the number of new building permits was 108,985 at the end of 2022, the figure is practically identical to that of the previous year (108,318), and very far from the 865,561 formalized during 2006. The sector estimates that, in order to cover current demand, Spain should build between 200,000 and 220,000 homes per year . That is, practically 100,000 per year more than the current ones.

This stagnation in new construction meant that “in just three decades, we went from building more than 300,000 subsidized homes to about 40,000,” the Appraisal Society points out. And it also affects land prices, which is why the moderation in recent months has not turned into a sharp decline between now and the end of the year. Quite the opposite. According to appraisers, the price of new apartments rose to 2,809 euros per square meter in June, which is 6.4 percent more compared to the same period last year.