“Public-private collaboration is key to addressing the affordable housing challenge”

Vivienda asequible. Affordable housing.

“Public-private collaboration is key to addressing the affordable housing challenge”

For over three decades, Fadeco has played a crucial role as a link between real estate developers’ associations across the eight provinces of Andalusia. In this interview, its president, Ignacio Peinado, addresses key issues in the region, such as the scarcity of developable land and the need to overcome regulatory barriers to promote sustainable and balanced growth. He also discusses the critical role of collaboration between the public and private sectors in ensuring housing access and developing projects that meet the real demands of Andalusian society.

Real estate development is one of the strategic sectors in Andalusia. What is the current state of the industry in the region, and what are its main challenges?

Andalusia’s housing industry is well-established and backed by leading companies and top-level professionals. However, the region faces a challenge common to other parts of Spain: the difficulty of accessing housing. According to estimates from independent organizations, Andalusia has a housing deficit of more than 100,000 homes, both in social housing and in the free market, covering both sales and rentals. Additionally, more than 500,000 young Andalusians, despite being employed, are unable to leave their parents’ homes due to high housing costs.

The sustained increase in prices has created a situation where many families are forced to make an unsustainable financial effort to buy a home. Faced with this reality, the region’s main challenge is meeting the growing housing demand. To achieve this, it is essential to speed up the management processes that enable us to secure urbanized land, the key resource needed to meet the high demand for housing.

Addressing the shortage of ready-to-build land is one of the major demands from real estate developers to the administration. This issue is particularly acute in major urban centers like Seville, Málaga, and areas such as the Costa del Sol. What kinds of measures or decisions are necessary?

Many measures can be taken, but the priority is to eliminate the obstacles that hinder the economic viability of land developments. This could be directly achieved through a strong commitment from public authorities, increasing the budget allocations for this purpose. It is clear that there is an inverse relationship between spending on housing access and promoting construction, as well as the proportion of social housing within the total. For this reason, we are concerned to see that the budget allocated for this purpose in the Andalusian government is less than 1% of the total, down from 1.5% in 2009, even when back then we had a large housing stock and much lower prices; figures that, in today’s scenario, would be entirely insufficient.

“Andalusia has a housing deficit of over 100,000 homes, both in social housing and the free market.”

Being aware of the administration’s strict budget constraints, we have also proposed alternatives that do not impact public finances, such as offering more flexibility in land use compensation or delaying the current 7% bond required when creating the Compensation Board until the start of urbanization work. However, the proposal we believe could have the greatest impact on activating sectors that offer higher percentages of affordable housing is what we call IMPASS (Andalusian Impulse for Sustainable Land). This proposal prioritizes land developments aimed at social housing construction, focusing on those that follow ESG criteria. This will also benefit the public administration since the urban infrastructure costs will be lower once these developments are completed.

In summary, these initiatives aim to ease current restrictions and stimulate the sector, increasing the supply of affordable housing and facilitating more equitable access to housing for citizens.

How can the region’s housing access problems, especially for young people, be solved? What actions does Fadeco propose to improve this situation?

Isolated solutions are not enough; multiple measures must be adopted in a coordinated manner. It’s concerning to think that young people’s housing access problems will worsen when they reach retirement age if they haven’t managed to buy a home. Otherwise, they will face rental payments under a pension system in fragile balance.

For this reason, the best option would be a national housing agreement involving local, regional, and national administrations. Among other goals, this would help reduce the tax burden on housing and address over-regulation.

In the short term, more social housing could be built by making the use of existing land and buildings more flexible, whether for sale or rent. In the medium term, reactivating sectors where planning is already underway is necessary, accelerating the approval of those with strategic importance for the region by including them in the fast-track office or activating the exceptional mechanism of declaring a housing emergency, allowing for immediate action, as in extraordinary situations such as floods or pandemics.

How do you view public and social housing initiatives in Andalusia? Do you think they are sufficient, or could new measures be implemented?

Public housing initiatives in Andalusia are practically symbolic. The main way to improve them is to increase the budget allocated to housing policies, which is currently completely insufficient to meet demand. In this regard, the Andalusian government’s housing budget is 0.2% of GDP, far below the European Union’s target of 0.4%. Some studies clearly highlight this situation, estimating that more than €7 billion in public investment would be needed to build 200,000 homes over the coming years.

How can private developers collaborate with the public sector to improve the supply of affordable housing?

Public-private collaboration has become a key tool for addressing the affordable housing challenge, allowing administrations and private companies to work together to fund, build, and manage affordable housing. This collaboration combines resources to optimize the always limited public funds available for housing development, integrating the expertise of both sectors to maximize social and economic impact.

“It is essential to speed up management processes to secure urbanized land.”

Despite this, public-private collaboration in housing policies is hindered by the regulatory environment and the lack of economic and financial incentives aimed at increasing supply. For this reason, Fadeco is advocating for measures to encourage this collaboration, primarily focused on simplifying processes and ensuring legal certainty, not only in construction but also in land management and the execution of urbanization works, incorporating public aid programs for land acquisition, urbanization, and the construction of affordable or social housing, whether through public or private initiatives.

Similarly, we are working to incorporate land exchange programs, swapping undeveloped public land for private urban land, allowing administrations to fast-track housing developments. We also aim to avoid external costs stalling the development of sectors indefinitely due to the unfeasibility of execution.

Andalusia’s new Housing Law, expected to come into effect in 2026, focuses on affordable housing, youth access, and increasing supply. Andalusia has become the first autonomous community to create its own regulations in this area, following the initiation of the draft bill. Why has Andalusia taken a different approach from the national housing law?

In my opinion, the national law is excessively interventionist, opting for over-regulation rather than incentivizing. The consequences can already be seen in some regions where it has been applied for a year. While it may be too early for definitive conclusions, so far, it has only reduced the supply of rental housing and increased prices. Moreover, there are constitutional concerns, as it encroaches on regional powers, and it focuses too much on price controls and penalties rather than encouraging the construction of more public and private housing, which could negatively impact real estate investment.

The demand for industrialized, smart, and sustainable homes is booming. How are developers responding to these new trends?

The focus on building smart and sustainable homes is not only a social responsibility but also a smart business strategy. Growing demand from buyers looking for more eco-friendly and healthier homes is transforming the real estate market. Investing in sustainability also attracts investors committed to ESG (Environmental, Social, and Governance) criteria, positioning companies competitively within the sector. Sustainable construction helps meet increasingly strict environmental regulations, avoiding potential future fines and ensuring long-term project viability.

At Fadeco, we believe that sustainability should not be limited to the buildings themselves to make them efficient and sustainable. We advocate for sustainability from the outset, beginning with the land urbanization phase. Therefore, one of our proposals is to prioritize urban developments with ESG criteria by offering higher development potential for social housing construction. This will also benefit the administration since urban infrastructure maintenance costs will be lower once completed.

Industrialized home construction offers several key benefits. First, it significantly reduces construction time, as factory production of modules or components allows for greater control and efficiency, shortening home delivery times. This not only optimizes operational costs but also allows for quicker project turnover, increasing profitability.

Additionally, industrialization reduces errors and improves construction quality by minimizing the inaccuracies typical of traditional construction. This translates into fewer repairs, generating additional savings. Strategically, industrialized housing is a solution that meets the demand for sustainability, with more resource-efficient processes and a smaller environmental footprint, positioning developers as innovative and committed to building the future.

How do you envision the future of the real estate sector in Andalusia and Spain over the next five years?

If the right decisions are made, Andalusia could become a benchmark for sustainable and inclusive urban development, where public-private collaboration plays a crucial role.

Although the current situation is complex, we believe there is room for growth and adaptation, driving projects that meet the real needs of the population and promoting greater housing accessibility. If we can overcome regulatory obstacles and improve the availability of developable land, Andalusia’s real estate sector will experience sustainable and positive growth in the coming years.

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