Opinion

Hoarded homes are a European failure, not a Spanish one

Thirteen funds own 100,000 homes in Spain, and a country is reaching for expropriation because the market outgrew it. Europe should finance affordable rental supply before every capital improvises its own drastic law.

Homes hoarded by investment funds are a European failure, not a Spanish one. That is the judgement we start from, because what is happening in Spain this week is not a local quarrel about rents. Frente Amplio, the platform Ada Colau leads into the 29-N elections, Spain's general election on 29 November, has made housing its flagship: a law to expropriate the portfolios of funds that own more than 1,000 properties, and a tax of 10 percent on accumulated housing. Colau wants the vote to be a referendum on whether housing is a right. We think the vote proves something else. When a party reaches for these instruments, the market behind those rents has outgrown national answers, and Europe should build the alternative before every government improvises its own.

The scale is the problem, so start there. Colau denounced as immoral that thirteen funds accumulate 100,000 homes in Spain. Thirteen firms can shape the rent of a whole country. This is not one Madrid landlord or one Barcelona block. That is why Spanish politics has escalated to a 10 percent housing tax, applying to companies from their first home and individuals from the fourth where combined value exceeds 800,000 euros, with exemptions for stable affordable rentals. Desperate instruments are what a country reaches for when it faces a market bigger than itself.

And punishments like these barely touch supply. Frente Amplio estimates its measures would cut affected rents by an average of 31 percent, bringing more than 500,000 empty homes, tourist rentals and high-priced listings back to the residential market. But note what they measure: redistribution of homes that already exist. Housing is now a priority for a large part of the parties in the Spanish campaign, from rental prices to the difficulty of buying and the power of large owners, which tells you how far the emergency has spread. A continent of mobile young Europeans, the Erasmus generation that studies in one country and works in the next, needs new supply in the cities it moves to. The market has not delivered it so far, and Spain's escalation to drastic instruments shows what happens when supply is left to it.

Punish accumulation in one country and the money shifts to the weakest rules, while renters are left with no new supply.

The European Commission and the European Investment Bank should launch a European affordable housing programme. Common borrowing would finance the construction and purchase of affordable rental homes. Member states facing accumulated portfolios would gain a supply-side answer, not only taxes and expropriations. The money is not exotic. Only common money can match owners spread across a whole country. This is where the opposition stands. Colau accuses the PP and Vox, Spain's conservative and far-right parties, of defending tax cuts and housing deregulation. The choice is simple: fund homes together, or watch every capital improvise its own drastic answer. Build the supply, and the drastic answers stop being the only ones on the table.