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The lack of updating of the maximum price of VPOs in Madrid limits promotions

Date: March 3, 2024 Time: 19:44:34

Social housing has been one of the most important issues that the Spanish government has had to address. The country is at the bottom of European countries with only 3% of social properties, a difference in the media that reaches almost 10%. However, various efforts have been made to increase the supply of affordable housing, such as the announcement of the mobilization of Sareb land with the aim of reaching 20%. Even so, the Association of Real Estate Developers of Madrid (Asprima), assures that the national market needs an annual production of 75,000 affordable homes and that to further promote these constructions, greater public-private collaboration is necessary and urgently update the maximum price of housing (PMV) of the floors of official protection (VPO).

As explained in conversation with ‘La Información’, the president of the business organization, Carolina Roca, in the last four years Madrid has concentrated 52% of affordable housing in all of Spain, crowning itself as the community that has promoted a large part of these projects. According to the expert, this occurs because the authorities of the Community “have understood much more what collaboration with the private initiative is and have not demonized this type of support.” However, she emphasizes that there is still a long way to go, especially in the updating of maximum housing prices because this will help encourage construction.

In the specific case of subsidized housing, Roca calls on the Autonomous Communities to act, because it is essential to make this adjustment of values ​​in the economic legal framework because the derivations directly. There are currently territorial entities in Spain that have not been updated in ten or fifteen years. Madrid, for example, has not modernized this index for 15 years and “they are still tied to when they were referenced to a minimum interprofessional salary of 700 euros. It is crucial that the PMV be updated”, denounces the president of the promoters association.

Asprima has presented a historical analysis and current situation of affordable housing in the report “The housing problem does have a solution” and among the main conclusions it is considered that a national pact for housing must be carried out with a long-term strategy and with three main objectives: to facilitate access to housing for middle-income families; advance the age of emancipation of our youth, and increase the birth rate. Among its measures, the adjustment of the PMV also stands out. The report puts in context that an increase in its price in accordance with the production costs that makes promotions viable and will allow an increase in the volume of construction.

The document exemplifies that this is a key measure in the case of the Basque Country. This indicates that in the two months after the increase, 65% of the homes for the entire year were started. Catalonia has also been another of the CCAAs that has made this decision. With the accumulated increases in PMV that they have made, they are 37% above the current levels in Madrid. Specifically last year, subsidized housing increased its price by more than 10% in the Basque Country in order to encourage its construction.

The PMV must have an increase in line with the construction costs, which makes promotions viable and allows an increase in the volume built.

“The most important thing is that an automatic update mechanism be created, so as not to freeze the index and so that this does not mean a political cost each time it has to be done,” said the president of Asprima in the presentation of the report. In this regard, the director of studies at Fotocasa, María Matos, comments to this newspaper that profitability is the main reason that leads developers and construction companies to bet on a project and that they are companies that in many cases answer to investors and that must to obtain benefits: “Risk is another important factor, and the outdated prices are an indication that ‘the accounts do not come out’, especially taking into account the 25% increase in the price of materials in the last year”, condemns Fotocasa’s board of directors.

Regarding the number of urban projects that currently exist in Madrid, the president of Asprima welcomes the initiative and indicates that they are “very necessary” for the country’s real estate system. Currently only the southeast of the capital has an investment of 22,000 million euros with four megaprojects where more than 150,000 homes will be built. A large percentage of these planes will be destined for subsidized housing and Roca emphasizes that “it is essential not to put stones in the way of these projects. Little by little we see licenses coming out and deliveries of promotions beginning to be made.”

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Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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