Madrid Sold 1,860 Public Housing Units to a Vulture Fund, Losing 25 Million Euros

Madrid Sold 1,860 Public Housing Units to a Vulture Fund, Losing 25 Million Euros

Madrid lost 25 million euros and left thousands of public housing tenants in limbo. The deal was closed by Ana Botella, head of the Madrid City Council, transferring 1,860 protected housing units to an investment fund. Tenants learned by letter that their flats were no longer protected. Lawsuits and complaints have faded, and no one has been convicted.

The official account sold the deal as a clean exit for a housing stock dragging costs. The fine print came later, in the form of rent hikes and neighbors seeking flats in the suburbs.

What Peine to Madrid’s 1,860 Public Housing Units

The Madrid City Council transferred 1,860 protected housing units to an investment fund. The price was low. So low that the city lost 25 million in the deal, according to the reconstructed balance. Tenants received no call or meeting: they learned by letter that their protected housing was no longer protected.

Some argue these units were sold cheaply due to payment defaults and maintenance issues eating municipal budgets. The accounting logic holds: an aging stock, low rents, and repairs at the taxpayer's expense. Yet another fact weighs: if the asset was so toxic, why did a specialized fund buy it, knowing how to squeeze real estate assets better than anyone?

The Tenant Who Went from Paying 400 to Over 800 Euros

The impact was not abstract. There are concrete cases: couples paying slightly over 400 euros a month found themselves with bills over 800. The jump forced many to move to suburban municipalities, adding transport costs and uprooting. One such move ended with mental health sequelae, according to circulating testimony.

The hike was not a billing error. It was the model. When a protected unit loses protection, the owner can raise rents to market levels. And Madrid’s market shows no mercy.

Why No One Has Been Convicted for the Sale of Protected Housing

Complaints and lawsuits have faded. No one has been convicted. The courts have not found — or sought with equal energy — the thread connecting the political decision to the tenants' financial harm. The deal was defended as a management decision, not a windfall.

The defense has three legs: the stock generated losses, defaults grew, and maintenance was paid by all taxpayers. It is the argument of the unbearable liability. The accusation has another: that public assets were sold at a discount, shifting social costs to those with the least.

The Vulture Fund, the Liability, and Everyone’s Money

The buyer was not an NGO. It was a fund specialized in discounted real estate assets. Its business is to buy cheap, raise rents, and rotate the asset. If the stock was a bottomless pit, the fund would have bought a problem. Instead, it bought 1,860 units in a European capital with structural demand.

The sale proceeds were used, according to the municipal version, to pay salaries and pensions and to prevent parts of the city from filling with what some call “scum.” That phrase, with that disdain, is signed by more than one in public debate. And it explains much of the consensus sustaining the deal.

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With these premises, it is foreseeable that the deal will remain without judicial responsibility and that tenants will continue paying the difference. The unforeseeable is whether a city council will ever calculate the real cost of selling public housing cheaply before signing. The arithmetic is not complicated. The will, another thing.