General trends in financing social housing in Spain

The affordability of houses has become one of the main problems for Spanish families in recent decades. The government has been actively involved in designing policies to solve this problem. Theoretically, the characteristics of the housing stock and population always determine the type of public intervention. In the Spanish case, there are some features that give rise to a particular approach which is slightly different from that of the rest of Europe. The following elements, among other things, have been taken into account when designing housing policies in Spain: the cultural importance of home-ownership, the evolution of prices, the distinct condition of large cities such as Barcelona and Madrid, the high proportion of mortgage burdens in relation to family income and the role played by the several levels of government. In present Spanish housing policy, it is possible to identify at least two main trends. Both the 1992-95 scheme and the 1996-99 scheme seek to provide financial support, basically to the demand side, in order to promote ownership and reactivate the building sector as a way to expand the whole economy. The housing market in Spain is strongly influenced by government intervention: a varied set of instruments has been applied in housing policy for the period 1996-99. The government also formulated a plan of action that followed the trends established by the former programme (Plan de Vivienda 1992-95). The aim of this paper is to examine in detail the objectives of the scheme and the instruments implemented to achieve them. In addition, we will analyse the involvement of the banks and the savings bank system and their role in the funding of the scheme. We will conclude with an evaluation of the extent to which the objectives of the first scheme have been met. We will also make some predictions and mention the special details concerning the second scheme.