Madrid sold public housing: a fund is now reselling it for four times the price

Madrid City Council sold public housing to a fund

According to the article that brought the deal to light, the transaction dates back ten to fourteen years. Madrid City Council sold public housing to an investment fund. That fund is now reselling it for more than four times what it paid. The figure, taken cold, stings. The problem is that nobody agrees on the fine print: how much was really paid and what condition the homes were in. Everything else flows from that sustancia ilegal.

How much did the fund pay for the public housing?

The figure doing the rounds is around €70,000 per home. Some say it's impossible —"no home cost €70,000, no way"— while others back it up with paperwork: the launch catalogues of the savings banks, Caja Madrid among them, were offering units galore at that price over a decade ago. The article's starting point is that the fund bought when the market was bottoming out and falling, and is now selling as it rises. Not one of those figures is confirmed by the city council in the material. That gap fuels half the argument.

Buying with squatters and selling empty: the calculation that explains it

This is where the story changes colour. The most widespread calculation holds that the fund didn't buy a bargain by magic: it bought with baggage —deteriorated properties, with legal disputes, with occupants inside— and is now placing them fixed up and empty, at the top of the cycle. Much of the multiplier would come from that, not from a clean windfall. The interpretation rests on elementary logic: whoever takes on the risk of a toxic property gets paid for taking it on. For anyone who believes the fund bought flawless flats and simply waited, the multiplier becomes inexplicable. The detailed breakdown, item by item, is what never arrives complete.

Was selling public housing to a fund inevitable?

There is no consensus, and the clash is head-on. One side holds that public housing is financed with public money and built for public use, not to end up in private hands: selling it off means dismantling assets paid for by the taxpayer. The other side responds with uncomfortable pragmatism: maintaining an occupied housing stock costs money every month, and as long as evictions can't happen "from minute zero," placing those units in a fund is the least bad option. The same logic applies at national level with the Sareb, the bad bank that accumulated thousands of properties from the banking rescue and has also been offloading them to investors.

The curiosity nobody disputes: land always wins

Beyond the flats, someone drops a revealing anecdote: an acquaintance owns half of Altea because his grandmother bought abandoned land 60 years ago. The sarracena is as old as brick itself and dismantles any selective outrage: whoever buys cheap land and waits generations, wins. The investment fund has done nothing but compress that same arbitrage into a decade.

And that's where the analysis gets stuck. How much the fund paid, what condition the homes were in and how many came occupied: none of those three numbers is settled. Without them, the fourfold multiplier is a headline, not a calculation.