“The Commission does not intend to regulate prices”

In a letter addressed to the European Popular Group, known to this newspaper, the former vice-president of Pedro Sanchez admits that the future European plan for affordable housing will not include price caps.

Ribera’s clarification comes after the European PP asked him for formal explanations after his intervention in the European Parliament’s special housing committee.

Five EPP MEPs, led by the Spanish Borja Giménez Larraz And Abbey of Wondersdemanded that the Commission, in another letter to which this newspaper had access, distance itself from any means of political control of rents and sales prices.

In his writings to Teresa Ribera, Dan Jorgensenalso a social democratic commissioner for energy and housing, the People’s Party recalls that “the diagnosis of the housing crisis is shared”, but warns that “The recipes already tested for rent control have failed”.

Spanish MEPs, as well as Nikolina Brnjac, Dirk Gotink And Regina Dohertyprovide data on European capitals, such as Berlin and Barcelona, ​​where rents are capped “they have considerably reduced the supply”triggered insecurity and failed to “contain prices”.

Interventionism in Spain

The Commission’s response represents a political victory for the European PP, which has been trying for months protect the community project against the interventionist theses applied in Spain under the mandate of Sánchez and Minister Isabelle Rodriguez.

The people want Brussels to draw a clear line: “More housing and legal security”and not repeat the model of generalized limits promoted by the Housing Law.

The origin of the clash lies in a recent intervention by Ribera at the Housing Committee of the European Parliament, where it was interpreted that opened the door to “establishing price caps” on rentals and purchases inside the Affordable Housing Plan of the EU.

The EPP deputies warned that this message opened “a regulatory path which has already failed” and requested a correction in writing.

In their letter to Jorgensen, Giménez Larraz and the other signatories recall that “direct price controls create an illusion of immediate relief for a few, at the expense of get worse permanently access to housing for the general public.

They insist that European experience shows that controls “discourage investmentsreduce the available stock and feed more expensive and more opaque parallel markets“.

Berlin, Barcelona and Stockholm

In Berlin, they explain, the Mietendeckel “reduces the supply of rental housing up to 60%“, apartments moved to the tourist sale or rental market and therefore, far from making them less expensive, raises prices.

Barcelona is mentioned as another laboratory case: the Law 11/2020 reduce the long-term rental offer by 13% and failed to contain prices. This dynamic, they point out, was then reproduced by the State law for the right to housing.

A third example is Stockholmwhere a strict control system generated waiting lists with more than 810,000 applicants and average lead time of nine years in 2023.

“The Commission cannot adopt a strategy for distributing shortages,” MEPs warn. “An effective social policy It is not a question of managing scarcity, but of generating abundance.“, they emphasize in their letter.

The response letter signed by Ribera and Jorgensen assumes a large part of this diagnosis and dispels the fear of a generalized capping directive. “We both wish to emphasize that Commission has no plans to regulate property prices as part of the next Affordable Housing Plan“, write the members of the Commission.

“No more than necessary”

Ribera also qualifies the scope of his remarks in the parliamentary committee. ensures that refers to safeguards and “conditionalities” “national public support schemes” in the context of the decision on State aid for services of general economic interest (SGEI) and “price regulation in general”.

Brussels considers it necessary that these conditions for protected housing benefiting from public aid “be fixed in a transparent manner” and place their “below market” pricesbut that these “are not reduced more than necessary”.

In other words, it is avoid abuse of public money, without imposing a political ceiling to the entire European real estate market.

The Commission rules out any direct regulation of prices and is committed to increasing supply. However, Moncloa demands the rent control model, the public enterprise Casa 47 and the extension of price capping in “difficulty areas”.

MEP Giménez Larraz sums up the difference by ensuring that Ribera “excludes implementing in Europe what Sánchez is doing in Spain” and hopes that the final plan will include the EPP’s proposals: “More and more housing, less bureaucracy and legal security against illegal occupation.”

Maravillas Abadía, for his part, claims to concentrate the future European plan “among young people and families”for whom access to housing has become the “main obstacle to their life project”.