In Spain, it is very common to recognize the script of protected housing: it is built on public land, it is protected for decades and when the term expires, the apartment goes on the free market, a moment that companies and investment funds take advantage of to buy at the base price. In Donostia, the Basque government decided to change that ending and opt for the “Viennese model”.
Its housing department has reached an agreement in principle with Testa Residential, a company linked to Blackstone, to acquire the surface rights to 510 protected homes in the Benta Beri neighborhood for €100 million. The signing is scheduled for later this year and, when it comes, the flats will have permanent public protection classification
Image: 196,000. 100 million divided by 510 comes to this per housing. The Ministry of Housing contributes about 30 million and the Basque Government pays the rest in installments. Councilor Dennis Itxaso maintains that the cost is the same as building many other houses from scratch, so it pays off. 1,700 residents will be paying rent between 600 and 1,000 euros per month — Euskadi is in the top 5 in terms of housing prices. Moreover, those who own multiple dwellings charge more expensive rents than private owners.
How do we get here? In 1994, the Basque government granted development to Metrovacesa and Vallehermoso and gave them surface rights over public land for 75 years until 2069. The apartments were leased in the late 1990s with a 30-year security, which expires in November 2028. Finally they end up between 520% of Testa and Blackstone and 520% of Blackstone. It controls. As of earlier this year, about 40 tenants received letters announcing their contracts would not be renewed. Neighbors organized themselves into the Alokairu Association in support of Stop Evictions, and that’s where the news came from.
stones in the road. For Blackstone, it is worth remembering that it landed in Spain in July 2013, in the middle of the real estate crisis, when assets were at historic lows, purchasing from the Madrid City Council – then managed by Ana Botella – 1,860 subsidized houses (EMVS 500 million) from the Municipal Housing and Land Company. their market value.
Today Testa Residential has a large portfolio in Madrid. In 2018 alone, Blackstone took control of the REIT by buying stakes in BBVA, Santander, Merlin and Acciona, and with it came about 10,600 rental apartments, mostly in the capital. After a few years of sales, it still has almost half of its portfolio in Madrid and will have more than 8,300 homes at the end of 2025. This should not be confused with Fidere, the fund’s other SOCIMI: the 1,860 EMVS apartments that the city council sold in 2013 ended up in Fidere, not Testa, and Fidere has already sold its portfolio to Brookfield.
What does “Viennese Model” mean? Vienna has been building municipal housing since 1919 and does not sell it. It has over 220,000 own apartments and around 60% of its residents live in social or subsidized housing. The key is not only the size, but that this park does not return to the market. Even there it is not a paradise: rents are also rising, although less in public parks. Euskadi has already taken a step along these lines: since 2003, new VPOs have permanent qualifications. By the 1990s, Benta Berry had completely dropped out.
Master and replica. Rita Maestre used the news as an example of what she would do as mayor of Madrid. He cites Colau, Ila and now the Basque government as cases of restoring public housing rather than selling it, and points to the PP for looting in Madrid. One of the most repeated answers is that the land already belongs to the Basque government, which has allowed private housing to be built on public land and now has to pay for it. If he had built it himself and paid the rent, it could have already been paid off.
Criticism based. The Donostia Plenary Session requested not to repeat this formula in 2020. In addition, the operation transferred 510 houses to the public, but did not build any new ones. The Basque Executive already owns the land and what it will buy is the surface rights, uniting the land and buildings under the same ownership. Itxaso insists it had no choice: “510 rental houses are not available” to resettle anyone in or around the city. The mayor of San Sebastián from the PNV celebrated that the government had recovered the property.
First? According to the Basque government, this is the first time such a thing has been done in Spain. This is not the only move: Navarre has protected by law the permanent qualification of its rental VPOs, the PP appealed to the Constitutional Court. In August, the Basque executive itself bought 57 houses from Kutxabank for 100,000 euros each, distributed in 26 municipalities.
And that’s a principle of agreement for now. It took more than a century for Vienna to become a public park, and Donostia bought only 510 houses. Whether this is the first brick or an isolated case remains to be seen. The Basque government plans to approve a law reform later in the year that, according to its calculations, will benefit another 500 homes, including 100 in Intxaurrondo.
Picture | Juan Herrero/EFE (Housing Block owned by Blackstone)
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