Socimis limit their investments in Barcelona due to housing regulations

Socimis limit their investments in Barcelona due to housing regulations

The vision of the real estate market held by the main Catalan administrations is causing concern among companies in the sector. Specialized firms developing medium and long-term plans in Catalonia say that they have a much smaller presence than what they intended. The municipal regulation on rents has deterred several Socimis from expanding in its territory. According to La Información, companies who have already defined their growth strategies with these conditions, think a lot about whether to continue investing in these regions.

The current situation is that several of these vehicles plan to limit their future exposure in the autonomous community, a worrying situation when more than thirty listed companies have assets in Barcelona. In addition, there are other actors who directly rule out developing their activity in the city.

This reluctance to bet on the city of Barcelona is explained by the reforms of the rental market that the mayor, Ada Colau, has promoted. The council approved a few weeks ago the declaration of a stressed zone for the entire city, which means that for at least five years the price limitation tools included in the Catalan Housing Law can be applied. The votes of the municipal government (Barcelona en Comú and PSC), ERC and JxCat allowed it to go ahead. Before, the allegations of the associations of promoters and owners of rental housing were rejected for being "privileged minorities", in the words of the Councilor for Housing, Lucía Martín.

This tendency to discard Barcelona is on the way to becoming a constant for the Socimis, although it had already happened for some time. Executives of these vehicles maintain that in the past they ruled out several investments or even their entry into the Barcelona market due to the promises in real estate matters of the local and regional executive powers. "We decided not to enter when we started our activity some time ago. It was clear to us then," says one of the sources consulted. Among the reasons he alleges is Colau's position and his formation on the rental market, which is defined by the price cap and by a complete intervention of the administration in the business managed by the companies.

The other reason that discouraged the Socimis is the rule that requires new developments to reserve 30% of the flats for social rent. This reform was approved in December 2018 after the Modification of the General Metropolitan Plan (MPGM), and affects all new works and major reforms that have more than 600 sqm. An extreme that is expected to be included in the state Housing law that the Council of Ministers will approve next Tuesday, which will be an endorsement for that measure, although in this case compensation for developers is contemplated, something that the City Council of Barcelona does not take into account.

The last straw for these possible injections into the community's real estate governed by ERC and Junts per Catalunya is the regional legislation on leases that goes along the same lines as what Colau defends. This rule is the one that protects this price control, based on a reference index that determines which areas are stressed and that is currently applied in 60 Catalan municipalities. Companies have already warned that since its launch in September 2020, investments have been reduced.

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