Housing: solving young people’s dilemma
Only 15.8% of the young population is emancipated, the worst figure in decades. Youth unemployment and housing prices are the two main reasons. Now, the government is trying to find a solution through a new housing law. But will it be enough? We talk about it with the experts.
In Spain, around half of the young people between 16 and 29 years old who live in independent housing do so in shared rented accommodation. If you want to live alone, you have to spend 91.6% of your salary, and if you want to take out a mortgage, you have to set aside at least 55.1% of your salary. Despite the fact that, apparently, buying a home may seem more affordable, the reality is that young people have a veto on the mortgage market. They neither have sufficient savings to cover the initial outlay, nor do they enjoy job stability. This is what the Spanish Youth Council states in its annual study for 2020.
Housing continues to be a big headache for young people who want to emancipate themselves. For this reason, facing this scenario, the government of Pedro Sánchez has announced a new Housing Law, which would have to limit rental prices and favour young people’s access to decent housing. At 11Onze we have analysed the proposed regulation with the Sindicat de Llogateres and the president of the Consell Nacional de Joventut de Catalunya, Guillermo Chirino.
When the law falls short
In an emergency situation such as the current one, in which the rate of youth emancipation has reached historic lows, Chirino considers that “political action cannot wait“. Even so, he warns that, if the law takes 12 or 18 months to be passed, as is usual, this would give landlords room to raise rental prices and, therefore, the effectiveness of the measure would be called into question. The president of the CNJC also warns that the government has already pointed out that this law’s aid would be limited to those young people who work. “This alone rules out more than 50% of young people,” laments Chirino. Furthermore, politicians have stated that the aid would reach around 50,000 young people, that is, only 1% of young people in the state.
“Obviously, this law will not solve anything or facilitate the emancipation of young people,” criticise sources from the Sindicat de Llogateres, who adds that they are not in favour of financing the payment of housing for young people with government assistance. “It encourages the landlord to think that, if young people can pay more, then the price does not have to be lowered, but can even be raised,” they argue.
The inspiration of the Catalan model
With regard to the regulation of rents, the proposal is inspired by the Catalan regulation, the only legislative proposal in force in Spain. This is how the Sindicat de Llogateres explains it, who, together with the Sindicat de Inquilines, have worked intensively on the Catalan law and have fought to bring it to the national level. Nevertheless, the union warns that the differences between the Spanish government’s proposal and the Catalan one are substantial and put at risk the effectiveness of the measure in Spain as a whole.
To begin with, the Catalan law establishes a rental price index, which assures tenants that, in the event of signing or renewing a contract, the price remains the same as in the previous contract. Moreover, if the price is above this reference index, it will have to be lowered. The index is calculated on the basis of the average rental prices for dwellings with similar characteristics and within a specific area. In contrast, in the Spanish government’s proposal, only “legal landlords”, i.e. companies with more than ten properties, would be obliged to reduce the rental price.
“In cities like Barcelona, the concentration of ownership is very high, but only 30% of rental housing is “legally owned”. Most are owned by individuals who, despite owning more than ten homes, would not be obliged to reduce the rent”, warns the Sindicat de Llogateres. In the rest of the Catalan municipalities, where the concentration of property ownership is lower, this measure is, in their opinion, “totally decaffeinated”.
On the other hand, it seems that the application of the reduction will be discretionary, and it will be left to each autonomous region and even each municipality to decide. On the other hand, Chirino argues that, if it is a public measure, “it should be binding for everyone, otherwise it could generate inequality and territorial inequity”.
A dignified life for young people
Beyond the regulations on the price of rent, the new law must provide a whole series of aid available to young people. But the difficulties of emancipation do not seem to have a definitive solution. To begin with, despite the fact that, in order to ensure a decent living, housing should not account for more than 30% of a person’s salary, the reality is that prices are soaring and salaries are too low.
Thus, if the average salary of employed young people in Spain is 969 euros, the amount that should be spent on housing should not exceed 290 euros per month. Even so, the average rental price is 880 euros per month and, in certain areas of Spain, such as Barcelona and its metropolitan area, the figure exceeds 1,000 euros. So, how can we help young people to become independent?
The Sindicat de Llogateres believes that, in order to facilitate emancipation, it is necessary to get to the root of the problem: “We must ensure that all rental housing lowers its prices and facilitates access to vulnerable groups. In Catalonia, many housing collectives are calling for an affordable public rental housing stock. It is not a question of building more, but of recovering housing and ensuring that large landlords allocate part of it to social renting”, they argue.
The CNJC has also created self-advocacy workshops to detect the difficulties faced by young people and try to find answers. “In Catalonia, we already have a law regulating rental prices that has been incredibly effective. It has reduced rental prices in those areas where it has been applied and has also improved confidence in rentals,” they argue. Now, they believe, what is needed is to improve this Catalan regulation and extend it to the rest of the territory. “We still have a long way to go,” they say.
11Onze is becoming a phenomenon as the first Fintech community in Catalonia. Now, it releases the first version of El Canut, the super app of 11Onze, for Android and Apple. El Canut, the first universal account can be opened in Catalan territory.
If you liked this article, we recommend you read:
Accept and not accept when renting a house4 min read
In the real estate market, and specifically in the rental market
Promoting Catalan: the 11 best TikTokers3 min read
We present a collection of the 11 best TikTok profiles made in