The various governments of our country have squandered nearly 160 billion in tax benefits in favor of owners over the last 40 years. This is one of the main conclusions of the report entitled “Four decades of failure of housing policy” published this Tuesday by the economic cabinet of the Workers’ Commissions (CCOO). According to the union’s experts, thanks to these personal income tax deductions for the purchase of apartments and houses, 1.6 million social housing units could have been built with affordable rents.
“Spain could today have an affordable stock of nearly five million owned or rented homes. This is the opportunity cost of the poor allocation made over four decades,” deplore CCOO. Since the 1980s, only one in five completed houses has been public. In total, 2.7 million over this period, whose weight on the market has continued to decrease, until it only represents one in ten homes since 2020.
The union’s experts point out that the 160 billion wasted on personal income tax deductions meant “a transfer of public money that the seller appropriated by increasing the sale price, knowing the greater capacity to pay by the buyer thanks to tax assistance. Furthermore, they exhibit “a clear regressive bias,” because “taxpayers with greater earning capacity benefited to a greater extent.”
“If each year the tax cost of this deduction had been allocated to the promotion of public housing, in 2024 we would have a public stock of 1.6 million housing units,” recalls the report. To perform this calculation, CCOO took the following factors into account. Firstly, the construction cost in June 2024 was 1,310 euros/m2 built, according to the Appraisal Society. This implies, approximately, a construction cost of around 1,500 euros/usable m2. “At the same time, we considered that a public rental stock should provide a solution to the different housing needs of households, and would therefore be composed of 50% 3-bedroom housing (80 m2), 25% T2. one-bedroom dwellings (60 m2) and 25% of one-bedroom dwellings (50 m2),” he explains. With these data, we obtain an average cost per accommodation of 101,250 euros, the value used in the calculations.
In contrast, between 1992 and 2022, Spanish central governments spent €7.311 million in 2023 on tax breaks for tenants to cover the costs of renting their habitual residence. “Tax supports that have been largely appropriated by their owners, who have also benefited from other significant tax reductions in their tax base,” the report says. “With these 7,311 million spent on tax deductions, 72,000 rental housing units could have been built to supply the public stock. »
Furthermore, “the compilation of expenditure allocated to housing policy between 1997 and 2024 by the State is estimated at 33 billion euros in 2023. This money was mainly intended to finance through the General Budgets of the State (PGE) the successive State plans for housing, which in turn provided funds to the housing plans of the different autonomous communities and where a wide range of housing actions were financed, not always in line with the objectives theoretically defended”, defends the CCOO economic cabinet.
“With these 33 billion euros, 327,000 homes could have been built, which would be part of the public rental stock. In fact, part of these funds will have been used to finance part of the construction of the meager public housing stock that currently exists, estimated at around 300,000 housing units in all public administrations,” these experts comment.
OPVs are no longer built
The report also defines sheltered housing, known as VPO. The weight of this social housing “which the population can opt for is anecdotal in relation to the total volume of housing supply available on the real estate market. “Almost all of the housing available on the market is at free price.” This shortage of public supply has exacerbated the problem of access to housing, as well as low wages and the impact of tourist rentals, which has reinforced the treatment of apartments and houses as speculative investment products, especially for funds and “big guys”.
“In fact, the net balance of sheltered housing has been clearly negative for a decade. Each year, 40,000 to 50,000 social housing units are sold (dispossessed) (a total of 765,000 between 2007 and 2023) while only a few thousand new social housing units are built each year, increasingly diminishing the existing stock of housing social, the non-disqualification of these houses should not be generalized. Over the last decade (2013-2023), 368,000 protected housing units have been lost, a figure in which transfers of protected housing units exceed the number of new protected housing units built and which adds to real estate speculation,” they explain from CCOO .
“Decades of palliative housing policies and an absolute dominance of the market and the real estate sector have not improved the accessibility of housing in Spain nor the economic effort of families,” the report concludes.
