How Spain’s social housing imploded

(Reuters) - Social housing in Spain is not generous.

Rented social housing makes up just 2 percent of all residential property compared with 18 percent in Britain and 17 percent in France, according to the European Federation of Public, Cooperative and Social Housing.

The country’s investment in social housing is just 0.79 percent of Gross Domestic Product, about half the European average, according to Human Rights Watch.

Rather than offer subsidies to help people rent cheaply, Spain’s government has focused on helping people to buy. Social

housing tenants have typically rented for around 10 years and then been given the option to buy.

The property crash has torpedoed that policy. Rent-to-buy agreements set the purchase price at the start of the rental lease. When prices rise, that works. But any flats coming up for sale now were priced at the height of the boom. Today’s buyers would likely pay above a property’s current market value.

Reporting by Sonya Dowsett; Edited by Sara Ledwith