"Organization type ": Administracion pública

“Mietpreisbremse” and “Mietendeckel”: Rent regulation system in Germany

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“Mietpreisbremse” and “Mietendeckel”: Rent regulation system in Germany

Mismatches Price
Policies and regulations Price control

Main objectives of the project

Germany, particularly Berlin, faces a significant challenge regarding its rental sector, which plays a crucial role in the city's housing supply. Unfortunately, it has transformed into a speculative market, resulting in forced evictions and a diminished quality of life for millions of Germans. Consequently, Germany has implemented some of the most stringent rent control laws in an attempt to address this issue. Examining the evolution of these regulations provides insight into their impact on affordable housing.

Date

  • 2015: Implementation
  • 2019: Implementation

Stakeholders

  • German Federal Government

Location

Continent: Europe
City: Berlin
Country/Region: Berlin, Germany

Description

Germany is renowned for its extensive rental sector, offering tenants secure tenancies and protection from eviction, making renting an appealing option compared to home ownership. Since the 1970s, a system has linked rent increases to a reference rent for similar-quality local dwellings, updated regularly, usually every four years. A database known as the Mietspiegel provides a nationwide benchmark for tenants and landlords to index rents. However, due to the pressure of rising rents, the Federal Government introduced an even more restrictive law in 2015.

The law, known as the Mietpreisbremse (Rent Control), is a nationwide regulation that took effect in 2015. It mandates the maximum amount of rent a landlord can charge. According to the law, the net cold rent may not exceed 10 percent above the local comparative rent, as set out in the regional rent index. If the landlord charges more than the permitted rent, the tenant is entitled to a rent reduction.

In principle, the Mietpreisbremse applies to tenants living in areas with tight housing markets and to federal states that have implemented corresponding regulations. Besides Berlin, Hamburg, and Munich, many other medium-sized to large cities in Germany are also covered by this regulation. All rental properties are subject to the regulation, with some exceptions, such as newly listed apartments (to encourage new housing supply) or apartments renovated for energy efficiency or necessary modernization.

In 2020, Berlin implemented an additional rent price regulation, the Mietendeckel. This cap prevented owners of flats built before 2014 from charging more than what had been agreed upon in June 2019, effectively freezing all rents. It also stipulated that rents exceeding acceptable levels by 20% should be reduced, varying based on location and quality. Landlords failing to comply with the new law faced heavy fines. The policy was intended to be in place for five years. Unlike the Mietpreisbremse, which sets a limit on rent increases, the rent cap froze rents and utilized a more restrictive index. With Berlin’s law, no increase were possible. Not even a 10%. This measure meant that hundreds of thousands of households were eligible for significantly lower rents, countering the skyrocketing rents of recent years and preventing speculators from buying buildings solely for rent gouging. However, the court ruled that Berlin, as a state in the German federal system, lacked the constitutional authority to impose the cap.

Following the ruling, the Mietpreisbremse was revised to achieve a similar effect to the Mietendeckel. It now protects tenants in Berlin affected by the invalidated regulation by giving the Mietpreisbremse a retroactive effect. Tenants whose tenancies began after April 2020 can reclaim up to 30 months' worth of excess rent paid. Meanwhile, the German government is working to extend Rent Control until 2025.

Both experiences serve as examples of regulations with mixed effects on the rental market. While prices continue to rise, many Berliners and Germans have been able to reduce their rent. Germany offers a broad range of regulations to be tested in the future to determine how cities can lower or control rents.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Landsbyggefonden – the Danish national fund for non-profit housing

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Landsbyggefonden – the Danish national fund for non-profit housing

Policies and regulations National policies
Financing Financial actors Mortgage systems Public funding Progressive financing

Main objectives of the project

Denmark boasts a rich history of social housing, characterized by a unique approach that extends beyond solely catering to low-income individuals. Through a system of non-profit housing organizations, the country has fostered a model of affordable housing accessible to individuals across all income brackets. One of its most notable innovations is the Landsbyggefonden, a fund that facilitates a self-financing model for these non-profits. Once mortgage obligations are fulfilled, tenants' rents contribute to the fund, enabling the construction of new buildings or the implementation of necessary improvements.

Date

  • 1967: Implementation

Stakeholders

  • Landsbyggefonden

Location

Continent: Europe
Country/Region: Denmark

Description

Social housing in Denmark is a fundamental pillar of the country's welfare system, designed to be non-profit and inclusive, fostering a diverse tenant mix for the benefit of individuals and society as a whole. Its primary aim is to provide affordable housing to all those in need. Presently, nearly one million people in Denmark—equivalent to one in six residents—reside in social and affordable housing, comprising approximately 600,000 housing units. Moreover, the proportion of social housing per capita continues to rise.

At the heart of Denmark's affordable and social housing model lies the National Building Fund, known as Landsbyggefonden (LBF). Established in 1967, LBF is instrumental in maintaining high standards of housing stock and enhancing tenant well-being. It also plays a pivotal role in counteracting economic downturns, such as the COVID-19 pandemic recovery efforts. Financed by tenant rents from non-profit housing organizations, LBF supports the expansion of affordable and social housing, as well as the renovation of existing properties.

Under the LBF framework, when mortgage loans for housing construction are repaid, tenants continue paying rents at the same level, with any surplus contributing to the fund as savings. This pooled resource is then utilized to finance the construction of new affordable and social housing units, as well as the refurbishment of existing ones. Such renovations encompass improvements to both interior and exterior spaces, the modernization of buildings to ensure accessibility for the elderly and disabled, and energy efficiency upgrades. Additionally, the fund covers demolition costs in socially vulnerable housing areas and supports infrastructural changes.

LBF serves as a vital mechanism for ensuring self-financing within the social and affordable housing sector, with savings being reinvested to maintain and enhance dwellings and to provide additional housing opportunities. By establishing a closed financial loop, it reduces the government's need to continually invest in new social housing and facilitates long-term planning for housing funding. Furthermore, it helps mitigate disparities in financial strength among various social housing providers and in the development costs of different estates, thereby influencing rental rates to reflect development expenses.

The fundamental goal of the Fund is to foster socially cohesive, safe, and sustainable communities, with a particular emphasis on investing in social activities and reducing rental prices. These endeavors are often organized through local partnerships involving schools, municipalities, or non-governmental organizations, with the aim of promoting employment opportunities and improving educational outcomes for tenants.

Managed by a nine-member board comprising representatives from housing organizations, tenants, and the two largest municipalities in Denmark, the budget of LBF must be approved by the housing minister to ensure effective governance and oversight.

After the success of Denmark, the idea is being used in other countries. In fact, this model is also used in Austria, with the Equity investment funds.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Rent control in Catalonia

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Rent control in Catalonia

Policies and regulations National policies Local policies Governance Price control

Main objectives of the project

In 2020, Catalonia (the region of Barcelona) implemented a restrictive rent control mechanism. Defining a price index in the area, depending on the features of the unit, any owner could surpass the limit of it. By doing so, in the year the limit was set in place, the prices decrease compared to other areas without the regulation.

Date

  • 2024: Implementation
  • 2020: Implementation

Stakeholders

  • Metropolitan Government of Barcelona
  • Catalonia's Government

Location

Continent: Europe
City: Barcelona
Country/Region: Barcelona, Spain

Description

Barcelona, as a global city, faced a big challenge: housing rent. The city has a low social housing stock and private owners had a lot of power to determine the price of the rent. As a result, a speculative increase on the rent was set in place. To avoid it, the government of Catalonia implemented a rent control that became one of the most restrictive ones in Euroe

In 2020, the Catalonia Government created a price index for each area of the country. The price index was based on the features of the building and the rent currently paid in the zone (in new and old contracts). Then, all new contracts made in the zones must be lower than the index. There were fines for non-compliance, ranging from EUR 3,000 to EUR 90,000 depending on the seriousness of the offence.

After a year in motion, the policy was overruled by the constitutional court. The argument was not about the content, but about the legal power Catalonia had to do the regulation. For this reason, in 2024, Catalonia promoted a new rent control based on the legal framework of the Spanish State. In this case, the price index only affects owners of more than 5 housing units. For the rest of landlords, the limitation is that the new contract cannot be above the old one.

Although it is too early to assess the new regulation, the one in 2020 has proved to be effective. Doing a diff-in-diff analysis, the Observatory of Metropolitan Housing (the public agency responsible to assess housing policies) stated that the regulation lowered the price for tenants during the year it was enforced.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Finques d’alta complexitat

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Finques d’alta complexitat

Mismatches Vulnerable groups Vacant housing
Policies and regulations Local policies
Financing Mortgage systems Supply subsidies Demand subsidies
Ownership and tenure Protection of social housing

Main objectives of the project

In Spain, refurbishment loans or subsidies that aim to help the most needed citizens have a high non take-up. In other words, subsidies for energetic improvements in the buildings usually end up vacant or in the hands of those who are not in most need. To tackle this issue, the Barcelona City Hall started the program “Finques d’alta complexitat” (High complexity properties, in english). The goal of the program is to have a proactive attitude of the administration and help those most deprived buildings to access to the loans or subsidies.

Date

  • 2019: Implementation

Stakeholders

  • Ajuntament de Barcelona
  • Foment de Ciutat
  • Vincle

Location

Continent: Europe
City: Barcelona
Country/Region: Barcelona, Spain

Description

During the 1960s and 1970s, Spain experienced a significant surge in social housing development. However, unlike traditional rental models, individuals who gained access to these properties became owners rather than tenants. This was facilitated by a system that allowed for the sale of affordable housing units. Over time, the protective measures on these properties, such as rent limits and restrictions on tenants, were lifted, effectively transforming occupants into unrestricted owners. Consequently, a complex issue emerged wherein low-income owners found themselves residing in deteriorating properties in dire need of renovation.

To address this challenge, Spanish authorities initiated various subsidies and public loan programs aimed at facilitating building refurbishments. However, these initiatives faced considerable challenges, particularly in disadvantaged neighborhoods and among low-income property owners. In those communities, non take-up issues emerged. Social complexities within these communities, such as squatters and elderly residents, compounded the issue. Additionally, many individuals lacked the necessary understanding of how to navigate subsidy programs, while others struggled to afford the financial contribution required for refurbishments due to their precarious financial situations.

In response, Barcelona implemented the "Finques d'Alta Complexitat" program as part of the broader "Pla de Barris" initiative, which focuses on revitalizing deprived neighborhoods. Unlike previous approaches, this program offers subsidies covering up to 100% of refurbishment costs, contingent on the socio-economic profile of the residents. However, the key innovation lies in the proactive engagement of the public sector with the affected communities.

Rather than simply announcing the availability of subsidies, representatives from the city hall, including social workers, architects, and technicians, actively visit the targeted buildings to engage with residents. This interdisciplinary team assists residents throughout the refurbishment process, addressing any barriers or concerns that may arise. By fostering community cohesion and facilitating communication, this approach has not only increased participation in the program but also mitigated potential conflicts, such as rent hikes post-renovation.

Furthermore, the program has contributed to the preservation of social housing by converting vacant or new units into rent-controlled properties managed by the public sector. Since its inception, the "Finques d'Alta Complexitat" program has benefited 123 estates, providing support to 1,582 families and demonstrating its effectiveness in addressing the complex challenges of urban housing renewal.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Home Town Helsinki and the Hitas: Affordable housing in Helsinki

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Home Town Helsinki and the Hitas: Affordable housing in Helsinki

Mismatches Diversity
Policies and regulations Local policies Land
Promotion and production Public promotion Public-private partnerships
Ownership and tenure Shared ownership Protection of social housing

Main objectives of the project

Helsinki, Finland, boasts one of the largest inventories of public land in Europe, enabling the city to pursue an ambitious long-term strategy aimed at fostering affordable housing. The objective is to cultivate mixed neighborhoods, incorporating various housing typologies—whether ownership, market rental, or social housing—provided by the public sector. To achieve this goal, Helsinki is actively collaborating with the construction industry and introducing innovative regulations, including the revitalization of the Hitas system and the introduction of the "company share" model.

Date

  • 2016: Implementation

Stakeholders

  • Helsinki City Hall

Location

Continent: Europe
City: Helsinki
Country/Region: Finland, Helsinki

Description

In 2016, the City of Helsinki introduced the "Home Town Helsinki" long-term policy aimed at fostering a diverse mix of housing to cater to various needs and life circumstances. A central objective was to cultivate mixed-tenure neighborhoods throughout the city, setting targets for both rented and owned housing production in regulated and unregulated markets. Out of the 6,000 dwellings generated annually, 25 percent are subsidized and regulated rental housing, while 30 percent are unsubsidized but subject to regulated ownership, ensuring price and quality control. Helsinki's substantial public land ownership, coupled with conditional land leases, enables the city to pursue its ambitious goals of affordable and inclusive housing.

With ownership of 70 percent of its land area, Helsinki plays a significant role in providing and advocating for affordable housing. The city boasts a portfolio of 60,000 housing units, with 48,500 government-subsidized for rental purposes. Most new housing developments occur on city-owned property, with the municipality directly producing 1,500 dwellings annually, including 750 units of subsidized rental housing.

Housing transactions on city-owned land operate under the "company share" model, applicable to both owner-occupied and subsidized flats. Under this model, the exchange involves trading the company share rather than the title to the land and housing, a process managed by the city.

Helsinki employs a distinctive approach to ensure that middle-income families can afford to reside in all neighborhoods, including the priciest ones. This approach, known as the "Hitas" system, aims to reduce housing costs on publicly owned land. Hitas homes, typically priced below market rates, have an upper limit on selling prices. These homes are situated on rental plots owned by the city. The pricing of units is based on actual production costs, with maximum prices regulated by the city. The selling price is established when the plot is assigned for construction, and subsequent sales must not exceed this maximum price. Allocation of Hitas units is through a lottery system. While owners incur lower monthly costs, they also pay land rent fees. This scheme proves effective in areas where market costs surpass production expenses. For builders in Helsinki, developing Hitas units on public lands is the sole viable option, ensuring guaranteed sales despite lower profits due to high demand.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Tourist short-term rental regulations in Palma, Mallorca, Spain

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Tourist short-term rental regulations in Palma, Mallorca, Spain

Mismatches
Policies and regulations Planning

Main objectives of the project

The new modalities of tourism endanger our cities and the option to have affordable housing. Nowhere is this reality more clear than in Mallorca. For this reason, the City Hall adopted a new regulation to protect the multi-family buildings of the city. The ban was one of the most restrictive ones in Europe: no apartment can be rented to tourist in the whole city.

Date

  • 2018: Implementation

Stakeholders

  • Palma City Hall
  • Consell de Mallorca

Location

Continent: Europe
City: Palma de Mallorca
Country/Region: Palma de Mallorca, Spain

Description

Palma is located in the south of Mallorca. It is considered one of the most touristy cities in the world. The tourist activity has been built with to features: low-salaries (to compete with other destinations in price) and land speculation. Since the 2008 crisis, as in other cities in Europe, the speculative nature of tourism moved to short-term rentals of housing units. To avoid the harsh consequences, the city hall took a drastic measure.

In 2018, the city council of Palma introduced regulations to ban all tourist rental apartments in the city, leaving only a small number of single-family homes available for rent by tourists on a short-stay basis. This measure was disputed in court. In 2022, the city hall won the case at the Suprem Court of Spain.

The interesting part of the regulation is how they used a legal loophole to implement it. In 2017, the Balearic Island Parliament approved a new regulation for tourist rental apartments. In the new law, they stated the possibility of banning new short-term rental licenses. However, a territorial plan needed to be approve. Moreover, a complete ban was not possible. There was a mandate to specify which typologies of housing and in what zoning areas the ban could be introduced. Yet, considering the urgent need of regulation in some zones, either the regional government or, only for the city, Palma’s city hall, could enforce precautionary measures.

This “urgent” regulation was thought as an instrument to define a new and provisional zoning area of the city (such as its center) and for a specific type of building. For example, to stop a new big project of tourist apartments or hotels. However, Palma declared that all the municipality should be zoned as a zoning district with urgent need for banning short-term rentals. As for the typology of housing, they ban all multifamily apartments to be rented to tourists. We have to bear in mind that multifamily buildings are overwhelmingly majority in the city. So, by using the loophole, nearly every building in the city was affected by the ban.

The territorial plan, approved two years after the ban, respected the regulation of the city. The Palma experience gives proof of how legal loopholes can empower cities to take bold regulations to face the housing crisis we live in. Now, the houses thought as affordable for people are being protected.

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Vivalla renovation

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Vivalla renovation

Mismatches Segregation Services Diversity Vulnerable groups Climate change
Policies and regulations Global frameworks
Promotion and production Public-private partnerships Participatory processes

Main objectives of the project

In 2010, ÖrebroBostäder, a public housing organization, initiated a strategic partnership agreement with construction company Skanska and architectural firm White Arkitekter to renovate the Vivalla district in Örebro. Residents of the housing complex actively participated in the planning process with the assistance of the Swedish Tenants Organisation. Workshops, including sessions for children, were organized to gather insights into residents' needs and preferences. Innovatively, Skanska employed 80 unemployed residents for the renovation and construction work through a unique bid specification. The Swedish Ministry of Employment collaborated with Skanska and ÖrebroBostäder by facilitating frequent informative meetings and interviews with residents. Additionally, the Municipality of Örebro supported ÖrebroBostäder by overseeing and approving the changes in the urban planning of the area.

Date

  • 2023: Construction
  • 2011: En proceso

Stakeholders

  • Promotor: ÖrebroBostäder
  • Architect: White Arkitekter
  • Constructor: Skanska
  • Örebro City Hall

Location

Continent: Europe
Country/Region: Örebro, Sweden

Description

Originally constructed as part of the Miljonprogrammet (Million Program) Swedish government public housing scheme in the late 1960s, the Vivalla neighborhood in Örebro has long struggled with high unemployment and various social issues. Despite its size, equivalent to that of a small town, Vivalla lacked essential amenities and services, and its physical isolation from the rest of the city compounded its challenges. However, through collaborative efforts led by ÖrebroBostäder, White Arkitekter, and Skanska, the entire neighborhood has undergone a transformative revitalization, creating a safer and more positive residential environment.

Initiating a strategic partnering agreement between Skanska and ÖrebroBostäder from 2010, the focus has been on refurbishing and renewing three blocks, with the project expected to conclude by 2024. Alongside renovating approximately 400 apartments, the partners have prioritized the development of green spaces and meeting areas within the neighborhood. Engaging in extensive dialogue with residents, solutions were identified to enhance safety and foster a sense of community. The project encompasses renovations, demolitions, new constructions, and significant alterations to the outdoor landscape. For example, by moving the entrances of selected buildings from the long eastern flank to the western flank, they created entrance spaces where neighbours can meet. By demarcating public and semi-private spaces more clearly, they facilitated the social “territories” that people need for their sense of identity, community, and security.

Energy efficiency was central too. It reduces the impact on the environment and lowers heating costs by installing solar panels, for example. The houses in Vivalla are more energy efficient than the building norm requires. They also tested the latest technology in a variety of climate-smart measures, such as the smarter FTX system where they preheat the outdoor air via ground heating holes in the ground. Moreover, green roofs where installed (with sedum coating)

Notably, the project aimed to introduce features unique to the neighborhood and attract new tenant demographics, aligning the population structure more closely with the municipality as a whole. ÖrebroBostäder demonstrated a commitment to change while preserving existing qualities such as low-scale, car-free walkways, and distinctive red-brick facades. Subsequent stages of the regeneration project have continued to replicate these patterns and designs throughout the district.

A significant achievement of the initiative is the Residents Builder program, providing work placements for unemployed residents in the renovation. Designed to reduce segregation and facilitate entry into the labor market, around 80 individuals have participated in placements with Skanska and subcontractors. Additionally, efforts to combat segregation have led to a more diverse population within the neighborhood, accompanied by the opening of new services such as the "Trainstation" education center, offering opportunities for skill development among young people in areas like music, photography, and digital literacy. The goal is that 70% of tenants must have an income. This will even increase diversity in the community.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Valle de Jinámar Regeneration Plan

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Valle de Jinámar Regeneration Plan

Mismatches Vulnerable groups
Urban Design Environments Regulación Técnica
Promotion and production Public promotion Participatory processes
Ownership and tenure Protection of social housing

Main objectives of the project

Since 2017, the Telde City Council has initiated an inclusive revitalization initiative for Valle de Jinámar, leveraging local community organizations, resident involvement, and financial support and coordination from both the Canary Islands and Spanish governments. The plan for Valle de Jinámar prioritizes the needs of its residents, aiming to empower the community in decision-making processes and foster a sense of ownership over neighborhood management and individual lives. Various stakeholders including service providers, educational institutions, governmental bodies, and businesses have participated in a collaborative effort focused on enhancing local community capacity to drive social and economic progress. Additionally, companies involved in renovation and social projects have created employment opportunities for local residents.

Date

  • 2017: En proceso

Stakeholders

  • Telde City Council
  • Cabildo de Gran Canaria
  • Gobierno de Canarias
  • Spanish government
  • European Union

Location

Continent: Europe
City: Las Palmas de Gran Canaria
Country/Region: Las Palmas de Gran Canaria, Spain

Description

The Canary Islands stand out as the region with the highest concentration of vulnerable populations in Spain, with Valle de Jinámar in Gran Canaria hosting a significant portion, comprising over 20% of its total population. Situated between the municipalities of Telde and Las Palmas de Gran Canaria, Jinámar encompasses both its historic center and the broader area known as Valle de Jinámar. This neighborhood is marked by a demographic profile featuring a considerable number of at-risk children and youth, a significant proportion of low-skilled professionals, high unemployment rates, and elevated levels of poverty and social exclusion, affecting 46.28% of families, with a disproportionate impact on women.

Initially developed in the 1970s to accommodate residents with limited economic resources through public housing, Valle de Jinámar underwent a subsequent privatization process, granting tenants ownership rights. However, it became evident that mere access to housing was insufficient to address the area's pervasive challenges. Consequently, the regeneration plan integrated social considerations, particularly focusing on the necessity for socio-educational and employment initiatives tailored to the residents. Through partnerships with local businesses, these projects were aligned with the broader regeneration efforts.

Presently, regeneration efforts have yielded refurbishments for 1,702 homes, primarily focusing on external enhancements, with an additional 434 residences undergoing renovation, while 2,573 units await rehabilitation. Beyond housing, community and sports centers, such as the "Centro Integral de la Infancia" and "Pabellón Juan Carlos Hernández," have been renovated to offer essential services and recreational opportunities to residents, addressing closures and disuse resulting from the 2008 economic crisis. Now, the “Centro Integral de la Infancia” offers psicological and educational support to the young people of the area. Moreover, after 13 years being closed, the sport center has reopened its door. Sustainable mobility emerged as a central focus, prompting the collaborative development of a mobility plan with residents and local businesses, emphasizing pedestrian-friendly initiatives and cycling infrastructure.

Addressing social challenges necessitated forging partnerships with 61 companies and local nonprofit organizations, facilitating the implementation of 135 socio-educational and employment projects spanning all age groups. The participatory nature of the renovation process was evident in the organization of workshops involving collaborating entities and apartment association representatives, as well as satisfaction surveys conducted among residents to solicit feedback. Additionally, an "Information Point" was established within the neighborhood, staffed by local technicians to provide support and promptly address community concerns.

The overarching objective of the project was to adopt an integrated approach, combining physical retrofitting with targeted social interventions to address entrenched vulnerabilities within the neighborhood comprehensively. Furthermore, governance structures involving multiple public administrations were established, ensuring community involvement in decision-making processes.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Opengela

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Opengela

Mismatches Vulnerable groups
Financing Supply subsidies Demand subsidies Sustainable development financing Public-private collaboration
Ownership and tenure Protection of social housing

Main objectives of the project

Emerging from the recognition that a significant portion of the population faced barriers in accessing traditional bank loans due to insufficient income and repayment capacity, the 'MAS OPENGELA' mechanism, combining public and private funds, provides loans with a 15-year repayment period. These loans aim to assist low-income households in fully financing home renovations. Additionally, OPENGELA facilitates coordination among neighbors for refurbishment projects and fosters dialogue among building owners to facilitate successful renovations.

Date

  • 2019: En proceso

Stakeholders

  • Constructor: Basque Government
  • Promotor: Bilbao Municipal Housing
  • Constructor: Bilbao/Bilbo municipality
  • Constructor: Eibar municipality
  • Basque Energy Agency (EVE)
  • Debegesa
  • Gabineteseis
  • Zabala innovation
  • GNE Finance
  • Housing Europe

Location

Continent: Europe
City: Bilbao
Country/Region: Bilbao, Spain

Description

In the 60s and 70s Spain build a large amount of social housing units. However, the vast majority of them were in a regime that after decades, the old tenant become the sole owner of the housing unit. Then, social housing stock has been reduced. As a result, all over Spain, low-income communities manage low-quality and old buildings in need of refurbishment, but without having the budget to tackle the deficiencies. The OPENGELA project wants to address this.

The main point of the project are their offices, working as One-Stop-Shops. Located in the neighbourhood of the refurbishment, in those offices, a multidisciplinary team helps the owners to manage their renovation. Basically, their work consists on, first, achieving an agreement among all the owners of the building to do the refurbishment. As condominium, to make the building accessible, there is a need on an agreement among the owners which is always risky and difficult when low-income people must do a financial effort to it. Secondly, the office guide the owners on how to access subsidies and financial help. All can be asked and managed from the office, reducing the inconveniences to residents.

OPENGELA serves as a prime example of a public-private partnership, comprising various public entities including the Basque Government, Basque Energy Agency (EVE), Bilbao Municipal Housing, and Debegesa, alongside two European-level organizations (FEDARENE and Housing Europe). The private sector is represented by three specialized firms: GNE Finance for financing, Gabineteseis for communication, and Zabala for European affairs. While Bilbao Municipal Housing and Debegesa have taken the lead on projects within the current setup, private partners such as GNE Finance and Zabala contribute expertise in novel financial instruments, as well as technical, social, and legal aspects to the consortium.

OPENGELA also offers financial support through MAS OPENGELA (Social Support System Fund) – a blend of public and private funds – which offers refundable loans in 15 years to help low-income households cover the investment needed to renovate their homes. This system helps residents cover 100% of the investment. The application process is streamlined: it not linked to life insurance, there is no cancellation fee, the payment deadline is up to 15 years and the nominal interest rate is 5.95% or 6.45% depending on the energy efficiency ambition. Moreover, the age limit was extended to access those loans. Now, access to them is up to 70 years old.

OPENGELA was first established by two pilot projects, one in Otxarkoaga (Bilbao) and the other in Txonta (Eibar). In the first case, work is done on five buildings encompassing 16 house numbers with a total of 240 homes. Other courses of action will also be undertaken from there, such as the refurbishment of the old shopping centre and the launch of business initiatives in premises which are currently empty. As for the case in Txonta, the pilot Project works on a total of 221 homes in 17 house numbers. The renovation will follow current standards of energy efficiency and accessibility. Te result is clear: more than 800 people have already benefit from the project. Furthermore, the financial solution has facilitated the uptake of building renovation in vulnerable areas without compromising the debt level of neighbours. On average, applicants allocate 26.20% of their income to cover debts with banks, which allows a low margin of debt to deal with financing. OPENGELA managed to mobilise private investment of 3.2 million €. Now the methodology is implemented in other locations.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Affordable Housing Bonus Program in San Francisco

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Affordable Housing Bonus Program in San Francisco

Mismatches Vulnerable groups
Policies and regulations National policies Local policies Planning Public-private initiatives

Main objectives of the project

San Francisco has faced challenges in ensuring affordable housing for its low and middle-income residents. However, through a reevaluation of California's Density Bonus schemes, a solution has been achieved. This involves providing incentives for the construction of affordable housing by allowing developers to surpass construction regulations.

Date

  • 2016: Implementation

Stakeholders

  • San Francisco Planning

Location

Continent: North America
Country/Region: San Jose, United States of America

Description

In California, the public administration does not have a lot of finance or land options to develop affordable housing. In a system relying on private investment, the USA and California have developed a way to push privates to build affordable housing. One of these options is the Density Bonus.

In a density bonus scheme, a developer is permitted to build a larger project on a site than would otherwise be permitted, in exchange for including specific elements such as a certain percentage of affordable housing units. In some cases, a developer can contribute land or funds for creating off-site affordable housing. In California, State law requires local governments to encourage housing development for all income levels and assist in the development of adequate housing to meet the needs of low- and moderate-income households. In 2016, the city of San Francisco revised its original scheme to adopt a 100 per cent “Affordable Housing Bonus Program”.

San Francisco encountered a significant issue with its density bonus scheme: the majority of housing units were allocated to low-income individuals, neglecting access for middle-income workers. Additionally, these schemes fell short of achieving the diverse mixture typical of a dense city like San Francisco. In response, the city introduced the "Affordable Housing Bonus Program" to address these challenges.

First, the program determines commercial corridors where developments can be made. The idea is to build in diversity and mixture of use. Then, the Local AHBP will offer incentives to project sponsors that elect to provide 30 percent or more affordable housing units on-site. Of this 30 percent, 12 percent must be permanently affordable to low- and moderate-income households and 18 percent permanently affordable to middle-income households. Projects that include 30 percent or more affordable units for low and middle-income households will be able to build more residential units and up to an additional two stories than currently allowed under existing zoning regulations. Yet, the Local AHBP includes special incentives for 100% affordable housing developments. These projects are generally built by non-profit developers, and usually require public subsidies. Projects with 100 percent affordable units will be able to build more residential units and up to three additional stories of residential development than currently allowed under existing zoning regulations.

This program goes beyond the State one, allowing for only one story more and having just a maximum of 20% of affordable housing.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España