• According to the first study on“Access to Housing and the Need for Affordable Rentals in Catalonia”presented by Culmia, the existing housing stock in the Barcelona metropolitan area meets only 14% (30,000 homes) of the need for affordable housing in the short term, while the city of Barcelona itself has space for only 3,000 subsidized housing units in the short term.
• Overall, Catalonia will need 225,000 new affordable homes and an investment of 1,010 million over the next ten years to ease pressure on the market.
• By region, Barcelona will account for 68% of investment in affordable housing over the next few years (206,000 homes), Tarragona for 16% (10,000 homes), Lleida 12% (4,000 homes), and Girona 4% (5,000 homes).The adjustment of the rental rates for affordable housing in Catalonia (the maximum rent at which these properties can be rented) means that the investment required to meet demand in Catalonia is significantly lower than in Madrid, Andalusia, or the Valencian Community.
• The adjustment to the price of social housing units in Catalonia(the maximum rent these properties can command) means that the investment required to meet demand in Catalonia is significantly lower than in Madrid, Andalusia, or the Valencian Community.

Culmia, a real estate platform that brings together all housing solutions on the market, has released its first report on “Access to Housing and the Need for Affordable Rentals in Catalonia,” drawing on data from the consulting firm GAD3 and the Institut Cerdà. The report analyzes the housing cost burden faced by households in Catalonia’s most populous municipalities, as well as trends in rental market prices and demand compared to other neighboring countries and regions.

Among its main conclusions, the report notes that Barcelona and its metropolitan area currently have a need for up to 216,000 affordable rental units to ease market prices. In terms of short-term availability, the existing land in the municipality of Barcelona can accommodate only 3,000 affordable housing units, while the metropolitan area covers just 14% of the need, which translates to 30,000 housing units. This creates a land shortage for 186,000 housing units in the metropolitan area. Across the entire territory of Catalonia, it will be necessary to develop 225,000 new affordable rental homes, plus 68,000 public rental units, and provide assistance to 106,000 households to help them transition to homeownership over the next 10 years in order to meet demand, ease current market prices, and reduce the proportion of income that Catalan households spend on rent—currently an average of 30% of their income.

The public investment required to undertake new affordable housing developments in the Catalan region amounts to 1,010 million euros.
By province, the bulk of this investment would be concentrated in Barcelona (68%), where the greatest need will require an estimated 700 million euros to develop 206,000 housing units. Tarragona, meanwhile, would account for 16% of the investment in affordable housing (200 million for 10,000 homes), Lleida 12% (100 million for 4,000 homes), and Girona 4% (50 million for 5,000 homes).

Compared to the other regions, the latest update to the rental rate cap in Catalonia (the maximum price at which these properties can be rented) means that the required investment is lower than that needed by the Community of Madrid, even though the number of homes it needs is higher. According to the report, the Madrid region needs 174,000 new affordable rental homes over the next decade, requiring public investment of 5,418 million euros, compared to 1,010 million for 225,000 homes in Catalonia.

Andalusia is another of the autonomous communities that needs a greater number of affordable rental housing units, with a total of 85,000 new units and public investment of 4,529 million. It is followed by the Valencian Community, with 55,000 housing units and 3,245 million, and the Canary Islands, with 46,000 housing units and 3,486 million.
According to Francisco Pérez, CEO of Culmia,“Catalonia has a solid foundation to take the lead in the development of affordable housing, although policies are still needed to foster greater public-private collaboration capable of meeting both immediate and future demand.” In recent years, we have seen a significant reduction in the share of the Catalan government’s budget allocated to housing, which directly contributes to the lack of solutions for establishing a structured model capable of meeting rising demand.”

The Generalitat’s housing budget remains the same as it was ten years ago, yet there has been less development

According to the report “Access to Housing and the Need for Affordable Rentals in Catalonia” prepared by Culmia, the Generalitat’s budget allocation for housing has remained stable over the past 17 years, although its share of the Catalan government’s total spending has declined significantly. Between 2006 and 2010, the Catalan government’s average annual spending on housing amounted to 870 million out of a total general budget of 34,668 million. This spending was used to build 6,000 affordable public housing units per year. However, during fiscal year 2022, the housing budget totaled 997 million (out of a total of 53,554 million), and only 867 public housing units were built.
Roughly speaking, in 2006, the budget allocated to housing policies and development accounted for 2.5% of the Generalitat’s total budget, compared to the 1.8% it represents today.

The Importance of Long-Term Taxation for the Government

The study also examines the benefits to the government resulting from taxation and tax payments generated by this public-private partnership. According to data from the fiscal analysis included in the study, during the construction phase of these affordable housing units, the revenue for the government from taxes such as theIBI, IAE, and ICIO, among others, would amount to 22,000 euros per housing unit, to which an additional 2,000 euros per year from the annual operation of the unit would be added. (See chart.) Furthermore, once the asset reversion provided for in these partnership plans has taken place—ideally estimated to occur after 50 years of operation—the government’s revenue from property taxes would be supplemented by revenue derived from capital gains, bringing the total to 280,000 euros per housing unit.

There is less affordable housing in Spain than the European average

In a context where housing production in Spain has fallen by 86% from its all-time high in 2006 (80,000 homes are built annually), the national market ranks at the bottom of Europe in terms of public housing construction, and is now the fifth country in the entire European Union with the smallest stock of public housing. Of the total housing production, only 10% consists of affordable housing, and of that percentage, the majority (80%) comes solely from private investment.
In Spain, 150,000 new households are expected to be created each year in municipalities with more than 50,000 residents; therefore, if the current trend in housing development continues, there will be a shortfall of 20,000 affordable homes each year.
As explained in the report “Access to Housing and the Need for Affordable Rent, ” when analyzing the housing cost burden rate by income group, households with incomes between 1,000 and 2,000 euros are currently the most vulnerable, with a disproportionately high housing cost burden rate exceeding 50%. It is precisely this group (41% of rental households) that would have access to this new supply of affordable rental housing.

You can view the full report here in Spanish and here in Catalan.