Is it the end of the housing model based on the new construction?

Local housing challenges from the market point of view and the needs of the population

"For a long time we said that the 21st century should be that of housing policies. We are in 2021 and I think we have a problem if people continue to perceive that this issue is not resolved," said Dolors Clavell, lawyer and moderator of the second session of the Municipal Conference on "Local housing challenges from the market point of view and the needs of the population".

To address the challenges of housing from different angles, the Catalunya Europa Foundation, together with the Office of Club de Roma in Barcelona and the la Fundació la Caixa have launched the Municipalist Conference on Housing, within the framework of the cycle "The transformation of the city ". The program has the support of the Barcelona City Council, the AMB, the Diputació de Barcelona, the Santa Coloma de Gramenet and Sant Boi de Llobregat municipalities and the collaboration of the PEMB and Barcelona Global.

The round table was attended by Juan Antonio Módenes, researcher at the Centre d'Estudis Demogràfics, Jordi Bosch, technical director of the Observatori Metropolità de l'Habitatge and Guifré Homedes, general director of Amat Inmobiliaris.

Currently, the demand for home formation is balancing with dissolutions. In the case of Barcelonès, the difference between the creation and destruction of homes is already practically 0, that is, to satisfy the demand for the creation of new homes, the existing supply would be sufficient. Juan Antonio Módenes explained that, in addition, this trend will continue, since the number of births is low and, therefore, in the medium and long term, the demand for the formation of new homes will also be low. This logic, however, is not so simple because part of the offer is diverted to other uses, such as tourism, apart from the fact that some of the houses that are left empty do not meet the minimum requirements to be occupied. It is therefore important to reflect on the need to carry out rehabilitation and adaptation processes over the next few years to guarantee the reuse of the dwellings that are left unoccupied.

According to Juan Antonio Módenes, we are facing the end of the housing provision model based on new construction. The current demographic base, which is very small compared to the middle parts, leads us to foresee that the new models of housing policies will have to be based on the management of the existing stock. Furthermore, in Catalonia the emancipation of young people is very late. Between the ages of 25 and 29, only 20% of young people are emancipated, a very low proportion when compared to other European countries. Managing the emancipation of young people is therefore also one of the great challenges of housing policies.

Jordi Bosch, technical director of the Metropolitan Housing Observatory, confirms that from 2013 there was strong inflation in rental prices that was not accompanied by a parallel increase in household income. In the AMB, the overload rate, that is, people who have to allocate more than 40% of their income to meet the cost of housing, is 42%, very high figures compared to other European countries.

On the other hand, the Covid-19 crisis has meant that during 2020 there has been a dramatic drop in new rental contracts. As a result of this drop, as well as the decrease in tourist pressure, as of April 2020 there has been an increase in housing on offer and, consequently, a readjustment of the market in order to provide an outlet for the homes. However, this readjustment also coincided with a decrease in the economic capacity of households and, therefore, there have been no immediate effects on the surcharge rate.

The director of Amat Inmobiliarios, Guifré Homedes, points out important changes in demand, due to the effects of the pandemic. Teleworking, the disappearance of tourism and the desire of some people to leave the city to go live in greener places, has meant that, from the real estate world, they have seen changes in demand. These events have led to a context of less pressure on the Barcelona market, as the focus has shifted away from the cities.

Homedes posed some of the challenges of transforming city centers in the future. And, especially, he pointed out the rethinking of the usefulness of offices and commercial premises that will remain, or have already been empty. For the director of Amat Inmobiliarios, the use of this park of empty premises and the possible conversion of these into homes is one of the great challenges of the housing market.