After more than a year of ignoring the city councils’ urgent requests to allow them to release the inactive 50,000 million euros they had in cash or in bank accounts to contribute to solving the housing problem, government Ha … Less than a month before the end of the year, they decided to create a loophole so they could use their 2024 surplus to finance housing policies. This is what the Prime Minister announced yesterday in one of the two interviews he gave in an attempt to resume the political program initiative.
On paper, the measure could allow city councils to release part of the €6.642 million surplus with which they closed fiscal year 2024, representing roughly a similar amount for city endowments. Government housing plan (7,000 million euros), but it happens that since we are in December and after we received at the beginning of the year a recommendation from the Ministry of Finance to make use of those resources to pay off debts, a large part of this surplus is no longer available in the funds of municipal institutions, as municipal sources explained to ABC.
Perhaps because of this circumstance, the president of the Spanish Federation of Municipalities and Provinces (FEMP) said, Mayor of Jerez María José García Pelayowhich advocated the demand for greater flexibility so that city councils can use their surpluses to provide housing for their citizens and which once again recalled this demand toHousing Minister Isabel Rodriguezjust a few days ago in La Coruña, reacted cautiously yesterday to the Prime Minister’s announcement and admitted that it was “expected” waiting to see how this announcement is reflected in the Bank of England.
At the beginning of the year, the Treasury gave the order to municipalities to allocate the surplus to pay off debts
Sources at the municipal level believe that this announcement is malicious and nothing more than a political maneuver to please togetherwhich requested this measure from the government, and it will not have real operation in the future. It must be remembered that the current regulations leave the licensing of financially sustainable investment programs in the hands of the Ministry of Finance, and therefore any action in this area must receive the approval of the Treasury, for which the municipal surplus is considered a kind of insurance to ensure the gradual reduction of the public deficit. This feeling is fueled by the fact that the Ministry of Finance never commented on this matter, despite being urged to do so by the government. Fimpat the last meeting of National Authority for Local Administration To deliver deficit targets for the period 2026-2028.
Varapalu for the residential sector
The measure announced yesterday has caused great dissatisfaction in the sector, considering that it represents only a small portion of what can truly be launched, at a time when public and private housing construction is most needed. Sector sources lament that this could happen when city councils are ready to help solve Spain’s public housing stock shortfall, “but their hands are tied by money blocked in the bank”. The same sources confirm that “this assistance is very little given the funds that municipalities have been left without,” stressing that the solution also lies in simplifying regulations and freeing up land to enable construction.
the rest
6,642 million is the surplus achieved by municipalities in 2024, a figure close to the 7,000 million from the government housing plan allocations.
Because in the residential sector, there was also great pressure on the government to release this surplus in order to allocate it to the construction of public housing. In fact, this is a demand that the Rental Home Owners Association (ASFAAL) has made on several occasions as a solution to the housing problem. “City councils cannot spend it because of the spending rule; “When we need a profound change in public housing policies and budgetary aspects, given that Spain is one of the countries with the highest property tax collection and the lowest investment in housing in the EU,” the association says, “it is essential that city councils really have the capacity and budget to address the problem.”
For now, the exact details of the announcement are still known, but the reform demanded by Gantz will also allow local governments to allocate these benefits to investments aimed at water saving, waste collection, social assistance “or investments with positive climate change impacts and energy efficiency improvements,” it was announced yesterday. Ministry spokeswoman Pilar AlegríaThis was during the press conference after the Cabinet meeting. Specifically, autonomous communities and city councils will be able to use the surplus obtained in their accounts during 2024 for financially sustainable investments during 2025, 2026 and 2027.
Failure to pay the rental deposit
In parallel with this procedure, Prime Minister Pedro SanchezHe also announced yesterday the creation of an assistance provision for delinquent tenants “in the case of rentals to young people or vulnerable families.” But it is not a new measure in any way, because what the executive authority will present to the next Council of Ministers is insurance against non-payment of rent, which is what government and together They had already agreed last year to lift the ban on the omnibus decree, sources from this newspaper confirm to this newspaper. Moncloa. In fact, on November 18, the Council of Ministers authorized urgent administrative processing of the draft royal decree setting the terms of these guarantees, which will initially only protect rents adjusted according to the Housing Ministry’s price reference index, as approved at the ministerial meeting on January 28, 2025.
According to the text published at the time, reparations would be administered by the autonomous communities and cities but financing would be borne by the state (Ministry of Housing). Furthermore, funds can only be requested after the defaulting tenant has left the home, either through a judicial release or through a judicial or extrajudicial agreement certifying the recovery of said home. If nothing changes regarding the initial wording, in order to receive assistance, landlords must file and update the legal deposit, and must sign with the tenant the Rent Guarantee Commitment.