Spain launches housing plan for neediest eviction victims

MADRID Thu Jan 17, 2013 2:03pm EST

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MADRID Jan 17 (Reuters) - Spain's government on Thursday launched a social housing plan offering properties at low rents to some families who have been evicted from their homes.

Close to 6,000 properties owned by the country's banks will be offered to the most needy, the government said.

Evictions of those unable to keep up their mortgage payments have become increasingly common in recession-bound Spain and protest and campaigns to help vulnerable families grew last year after the suicides of several people whose homes had been seized.

At least 400,000 properties have been repossessed in Spain since 2008, though not all of those are residential. Deep spending cuts and a lengthy recession threaten to exacerbate the problem as unemployment benefits run out for instance.

The Spanish government suspended evictions for two years for those most in need last November in response to mounting public anger, including those with young children, the disabled and the long-term unemployed.

The new housing plan is also aimed at the most vulnerable people pushed out of their homes since early 2008, when a real estate bubble burst.

The end of the property boom hit Spanish banks hard -- ultimately forcing the government to seek up to 100 billion euros ($133.58 billion) in European aid for its lenders last year -- and led to a growing spate of property repossession.

Spain's Economy Ministry estimated in November that 120,000 families could be in a position to qualify for the low-rent scheme for evicted families, for which conditions are very specific.

Single parents with two or more children for instance, or families with at least one child under three are among those that might be considered.

The 5,891 homes now up for grabs, were put forward by 33 Spanish banks, including nationalised lenders like Bankia , which offered up the biggest number of properties. The Bank of Spain and local municipalities have also signed up to the plan, called the Social Housing Fund.

But campaigners and consumer groups have criticised the measures on evictions taken by Spain so far, saying they fail to help enough affected families and do not tackle some of the roots of the problem, like poor mortgage-lending practices.

They also claim the government has shied away from damaging its lenders too badly by taking more stringent measures that could hurt their balance sheets.

"This moratorium (on evictions) is insufficient as it excludes the majority of people affected through requirements that are arbitrary and discriminatory," victims support group PAH said in a recent statement.

The social housing plan signed on Thursday will make the special rental contracts available for two years, with prices varying between 150 and 400 euros a month. The government said banks involved could eventually make more housing available.

Britain's Barclays and Germany's Deutsche Bank , which have big retail operations in Spain, are among those participating in the scheme.

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