The state as landlord: buying homes with €10 billion a year

The plan for the state to buy homes and rent them cheaply

Four properties. That is the number that separates, in this proposal, the owner who tops up their pension with a rental from the investor who is meant to be swept away. The plan can be summed up in three lines: the state buys homes, rents them below market price, and uses the income collected to keep buying more. An annual budget of €10 billion over five years would be enough, its advocates claim, to settle the matter. And only those who own more than four properties would have to sell.

What the plan proposes: buying, affordable renting and reinvestment

Three pillars hold up the idea. The first: the state becomes a landlord and sets rents below market for those who live in rented housing. The second: that money does not evaporate, it flows back into public accounts —it belongs to everyone— and is used to acquire more homes, so that supply grows on its own. The third, the most contested: nothing would need to be built, because there are plenty of homes; the problem is that they are held hostage for rent speculation.

The detail that spares it a media lynching is the threshold: only those with more than four properties would have to sell. No one points the finger at the small owner who supplements their pension; the declared target is the large landlord. On paper, the line is clear. In practice, the question is who decides where the saver ends and the speculator begins.

Why lowering rents won't conjure up the homes that are missing

This is where the arithmetic gets stuck. If X homes are demanded and supply is smaller, the problem is not the price: there simply aren't enough houses, and making them cheaper doesn't multiply them out of thin air. It is the argument most often repeated against the plan, and it needs no econometrics to hold up.

There is a second half to the problem, less discussed and more uncomfortable: allocation. If the state puts a hundred homes on the market at half price, who gets in and who is left out? Those left out not only fail to benefit: they face a residual market that is more expensive than before. The only way to stretch the housing stock without building is to split homes up and stack residents —public "patera flats", in the jargon— and that doesn't sell in any election leaflet.

Buying at market price or building cheaply: the cost of each route

Buying is not free, not even for a state. Those who back public provision but reject this particular version argue that paying market prices for the existing stock amounts to bailing out large landlords with everyone's money: gold is traded for whatever is on offer, and at best a brutal premium is paid. Their alternative is different: build, a lot and with quality, and let the bubble deflate.

The other extreme proposes the opposite: that the state neither buys nor builds, but steps aside. Liberalise land, overhaul building regulations inherited from the sixties, and allow tall, cheap blocks. The result would be cheap; pretty, certainly not.

The comparison circulating about housing built under each administration —16,419 in the Community of Madrid, 5,000 by the city council and 540 by the central government— is used as ammunition in that stretch of the debate, although the figures come from a satirical account and not an official body. A detail worth bearing in mind before citing them as hard data.

The public housing stock that already exists: arrears and neglected maintenance

Before buying a single home, it is worth looking at the ones that are already public. Anyone who has dealt with social housing management describes a familiar pattern: homes are allocated to the most vulnerable, many cannot pay, and the ball of unpaid rent grows on its own. The business becomes a bottomless pit.

The second front is maintenance. In blocks where the administration concentrates ownership —up to 70% of the flats in a single building— neglect of upkeep is reported, along with managers no one supervises while the money drains away unchecked. Buying more square metres does not fix that original flaw.

The numbers add up: ten billion a year, five years, a stock that would grow on its own. What doesn't add up is the inventory already in public hands that still fails to account for itself.