Feijóo promises a million homes in Spain: the numbers don't add up

Feijóo promises a million homes and the numbers don't add up

Can Spain build a million homes in four years? That is the question raised by the Popular Party's housing plan announcement, and the answer circulating among those who have run the numbers is a resounding no. Not for lack of land —95.7% of the territory is off-limits under planning law, but not because it's a ravine— but because of a combination of money, labour, power grids and jurisdictional issues that nobody can quite reconcile.

The first obstacle is arithmetic. At 100,000 euros per home, a million homes would cost 100 billion euros. The spending ceiling planned for 2026 is around 216 billion, meaning between 10% and 12% of Spain's state budget would have to go to construction for four straight years. Today, housing accounts for less than 1% of public spending. And the rest of the budget is mortgaged: pensions, debt interest, defence. Cutting from there is politically impossible.

How much does it cost to build a million homes?

The most commonly cited calculation starts from that base of 100,000 euros per unit, a conservative figure when you look at the actual price per square metre. From that starting point, the bill exceeds what the state collects in many entire budget lines. The alternative put forward by the plan's defenders is that the public sector shouldn't pay: the idea is to make it easier for private capital to build, not for the treasury to put up the buildings.

Even so, the equation remains shaky. Buildable land is not the problem, according to the more technical analyses: 95.7% of land is barred from construction by regional and municipal regulations, another 2% is already built on, and the remaining 2% would require amending urban plans that can take a decade. It's not that land is scarce; it's that the laws protect it.

The labour and power grid bottleneck

Even if the money appeared, there aren't enough hands. Construction suffers from a shortage of skilled workers that can't be solved in a couple of years, but only through a decade of training. And here opens the debate's most uncomfortable contradiction: if three or four million migrant workers are needed to build that million homes, the very plan that promises to contain demographic pressure would fuel it through the back door.

The second bottleneck is physical. The power grid cannot handle the urbanisation of a million new households plus their plug-in vehicles. Some argue that reversing current energy policies would unlock capacity; against that stands the fact that transmission and distribution networks take years to reinforce, and water has its limits too. A million homes are not just rooftops: they are streets, schools, health centres and public transport.

The precedent nobody wants to repeat

The shadow of the construction bubble looms over the proposal. Some see in the plan a return to the days of the property bubble, when cheap credit and land fever inflated prices until the burst. The most sceptical point out that the financial conditions of 2007 bear no resemblance to today's: there is no easy credit now, not even for a solvent individual. The problem wouldn't be a new bubble, but the inability to deliver.

The archives offer a curious fact. During the Franco era, the Decree of 22 November 1957 provided an outright subsidy of 30,000 pesetas for a flat costing around 120,000 in a working-class area, and the Instituto Nacional de la Vivienda (National Housing Institute) granted 0% loans on some tranches. With a 25% subsidy and favourable financing, developers put in not a single peseta. That model built entire neighbourhoods, but also left streets unpaved and services half-finished for decades.

Why only aid for those under 40?

The most criticised point is the age limit. Making housing access easier only for the under-40s leaves out those who have spent half their lives paying rent without being able to save for a deposit. The most repeated objection is that the criterion should be financial means, not date of birth: a fifty-year-old without family support who pays rent needs more help than a businessman's twenty-year-old son.

The plan's design also ignores real demand. Cutting taxes or offering guarantees doesn't lower prices when there are ten homes for twenty families: the price is what it is because of scarce supply, and tax relief only changes which family gets the home. Without touching land supply and bureaucracy, any deduction gets swallowed by the market.

Who holds the powers and who builds the homes

The institutional detail that undermines the announcement is that housing falls under the jurisdiction of municipalities and autonomous communities. Most are governed by the same party promising the million homes, and they have spent years without building a single public block. Promising from opposition what isn't done from regional government has a name in economics: narrative.

The result, with the available data, is that of that million, ten will be built, at most. Good intentions remain a headline. And meanwhile, the problem that really matters to those looking for a home remains unsolved: there is no new accessible housing for under 200,000 euros, which means a monthly payment of 750 euros plus a 30% deposit.