The Barcelona Housing and Renovation Forum (FHAR) dedicated a block to analysing how public-private collaboration can be a tool for increasing the affordable housing stock. The Barcelona City Council’s Housing Director, Javier Burón, presented the Barcelona Housing Metropolis (HMB) project and its goals of promoting and managing affordable rental homes in the city itself and its metropolitan area. The objective of this entity is to construct a stock of 4,500 homes in ten years by means of a private partner. HMB is formed by the Barcelona City Council, the Barcelona Metropolitan Area and the private companies CEVASA and Neinor.
Firstly, Burón wanted to specify the context of the HMB project, which, he explained, is just one more instrument for solving the deficit of 9,000 public homes in Barcelona and its Metropolitan Area. This tool of public-private collaboration will represent only one-third of the new protected homes built by the City Council. One-third more will originate from public-community collaboration, and the majority, two-thirds, will continue to be of the direct promotion type. All of these tools for the promotion of affordable housing have made it possible to build 8,000 new homes in recent years. In addition, around a thousand homes have been captured from the private market to be converted into affordable rental homes.
Burón described the great challenge entailed by the creation of HMB, since it represents a pioneering form of public-private collaboration. As no model like this has existed to date, it has been necessary to create from scratch an ad hoc structure and a set of rules of governance and operation. HMB will be a public-private mercantile collaboration in which the four partners, two public and two private, will establish a permanent collaboration that will make it possible to work, invest and assume risks jointly. This form of collaboration, which is differentiated from contractual collaborations in which the relationship is for the construction of a particular series of homes, can be a solution for today and for tomorrow, Burón said.
In this process it has also been necessary to create a new form of governance. The option selected was a model in which the public and private sectors have absolute parity: an unprecedented system which, Burón said, has raised doubts in both the public and private sectors. The public sector has demanded a public controller because the management team will be 100% private.
The HMB will now commence the construction of the homes of the first phase, which includes 600 of the 4,500 planned homes. They will have an average floor area of 70 m2, with a maximum price of €8.95/m2, when the average price in the city is €14/m2, and they will be allocated to affordable rental housing. That is to say, they are not designed for persons in situations of vulnerability but for the middle classes who are suffering the problem of dissociation between rent prices and salaries. “Now we’re entering the least spectacular phase of the project. It’s time to work, to build homes, to find tenants and to promote more vehicles of this type in Catalonia and Spain,” Burón said.
Challenges and opportunities of public-private collaboration in the promotion of affordable housing
The question of how to intensify this second phase of the extension of public-private collaboration to guarantee the right to housing was precisely the issue debated by the speakers who joined Burón in the round table: the CEO of Savills Aguirre Newman, Anna Gener; the Managing Director of Neinor Homes, Borja García-Egotxeaga; and a member of La Hidra Cooperativa, Laia Forné. The discussion was moderated by the journalist of El País Clara Blanchar.
All the speakers agreed that we have a serious problem of access to housing, not only among the most disfavoured families but also among the middle classes and particularly among young people, and that it is everyone’s responsibility to solve it. The CEO of Savills Aguirre Newman, Anna Gener, began by highlighting two consensuses: that there is a shortage of affordable housing below market prices and that this housing has to be on a rental basis. In fact, she wanted to make a call for generating stable policies, seeking consensuses and creating a degree of mutual confidence that will permit generating tools of public-private collaboration.
A key point for establishing this public-private collaboration is finding investors interested in becoming involved in it. In this respect, the Managing Director of Neinor Homes, Borja García-Egotxeaga, explained why his company, one of the private partners of HMB, is expressing its support for this type of collaboration. He explained that the company’s profit motive is necessary but not sufficient. Companies form part of the ecosystem, and therefore they have to take into account sustainability, contribution to society and good governance. “We have to move towards being a collaborative company well integrated into society. This gives us future and so we’re interested in developing the social part of these projects,” he said.
Anna Gener spoke about another type of investors who may be interested: those who have a long-term vision and prefer security over high yields. They are often small private savers. Burón also said that this type of investors fit much better with the public administration, and he contrasted them with distressed investors like vulture funds, with which he said the administrations should never collaborate. “Calm capital that searches for an almost boring business is not a myth. These investors do exist and we need models to offer them,” he said.
Laia Forné, a member of La Hidra Cooperativa, offered a critical point of view of public-private collaboration. “Our role is to be the discordant voice but seeking joint dialogue,” she said. For that reason, she wanted to sound a few notes of warning. The first was to remind everyone that this is not the first time in Spain a wager has been placed on private management of the housing stock arguing that it will be a more efficient method than public management. She recalled that this was already done in the 1990s and that, in the end, this construction of protected housing by private agents who acquire the ownership of the land has culminated in a decapitalisation of the State and a loss of public housing which has passed into private hands, and a mercantilisation of the land. Consequently, she made a call to reformulate this collaboration with a new management model which will “make this relationship virtuous.” This model has to be more transparent, and the work of the private operators has to be more fiscalised, the management has to be democratised, has to incorporate the citizenry, learning from what is already being done in the community sector, and has to incorporate social indicators and seek to benefit the local economic fabric and not only the large construction firms.
The HMB project, as we have said, is an innovative and pioneering initiative. But all the speakers agreed that it is a start and an avenue to be explored to enlarge the affordable housing stock. Burón said it is a model which, adapted to each particular case, can be exported to many other cities, and he encouraged the agents involved to make solid efforts in this direction. Borja García-Egotxeaga said that the HMB is only a starting point for overcoming the challenges, and he invited everyone present to imagine where we will be ten years from now.