The city of Barcelona recently revived a controversial policy that forces banks to turn the properties they've repossessed into public housing, reports CityLab contributor Feargus O'Sullivan. There are more than 2,000 unoccupied homes across the city, much of it still fallout from the 2007 financial crisis. The city is now turning five homes that have been empty, bank-owned properties for more than two years, into homes for people on the public housing list.
While the current list contains just five addresses, the city estimates that up to 600 empty apartments in areas of high demand could ultimately be pressed into public service using the law, helping to ease Barcelona’s affordable housing shortage. As test cases, these actions could pressure financial institutions to release their properties into the rental sector—something they can be reluctant to do because, unwilling to set themselves up as landlords, they hold out hopes of selling them properties outright. As you might expect, a policy that forces the banks’ hands has already proved controversial, not just within the city, but nationally.
The policy works like this. When the city identifies an empty property in an area of high demand, it is allowed to issue an expropriation order that would transfer control to the city. This order can be put off only if the bank finds a tenant for the building—paying an affordable, city-adjudicated social rent—within three months, with the banks being given a 14-day period to appeal the decision. Once handed over, the property needs to stay within the socially rented sector for four to seven years. Banks found to be concealing empty properties for the purpose of avoiding the edict are liable for a small fine—Bankia, Spain’s fourth largest bank, has already incurred a fine of €7,200.
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