Barcelona seeks investment funds with 5% to 6% returns for affordable housing

Deputy Mayor Jordi Valls calls for investors with patience and returns of 5% to 6%, and criticises funds seeking 20% and evicting tenants.

The Barcelona City Council wants investors with patience and moderate returns to expand the stock of affordable housing. This was expressed by Jordi Valls, Deputy Mayor for Economy, Housing, Finance and Tourism, during the V National Housing Congress organised by ApcEspaña.

Valls differentiated between the funds he considers acceptable and those he does not. "Investment is necessary, but there are some I like and others I do not like. What we need are those who have patience and are willing to invest with returns of 5% and 6%," he stated.

"Now, a fund is coming to the city that is buying a property, seeking a return of 20% and evicting tenants, so I also have the right as a City Council to say that we do not like it. But a fund that supports housing producers who build and supports a community, with a position of patience, is different," Valls added.

The municipal official advocated for collaboration between the public and private sectors. "We all want to reach a solution in the housing sector, but it is not easy. Let us maintain the relationship, even if we do not always agree. We need to work together and generate alliances," he urged.

Barcelona is working to increase its protected residential stock from the current 2% to 15%. To achieve this, Valls called for the involvement of the development sector. "There will be public money. We also need to try to mobilise private money. Our goal is to reach 15% not only through public promotion but also through private public promotion and the third sector. There is no capacity for the public sector to promote everything alone."

He also addressed financial institutions. "Those banks that say they do not want to invest due to reputational risk; the risk will come if they do not invest in the main social problem in this country, which is housing."

Valls acknowledged the difficulties faced by solvent municipalities in investing due to spending rules. "The municipalities that are solvent cannot invest, as there are no new budgets. Barcelona is the city with the most public stock, at 2%, and we want to bring it to levels of other cities in Europe. And for our goals to reach that percentage, there must be public promotion, both from the City Council and also from the private sector and the third sector. We need pathways with everyone. If someone believes that only the public sector can do this, it is a mistake."

The Deputy Mayor mentioned measures to expedite supply. "Administrative simplification is necessary, but also reducing urban burdens, lowering the VAT on affordable housing, and seeing what tax incentives can be produced. These are elements that can allow us to mobilise the supply much more easily, with public financing, through the ICO and through the Icpe. But we also need to establish stressed areas."

These statements come at a time of debate about the role of large investors in the housing market in Barcelona. The council insists that the solution lies in combining public and private efforts to expand the protected supply and contain prices.