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April 17, 2014
April 17, 2014

Spain: Social housing privatization: “Either you pay or you’re out in the street”

Author: F. Fafatale Translator: Susana García
Source: Periodico Diagonal  Category: On the crisis
This article is also available in: eselit
Spain: Social housing privatization: “Either you pay or you’re out in the street”

Property companies like Encasa Cibeles, from Azora and Goldman Sachs hedged funds investors, take over 3,000 (VPO) Social Housing.

“Either you pay or you are out, homeless. We are not a charity. We are investors. We have invested millions and we want to make money”. That was the answer IVIMA´s (Social Housing Institute of Madrid) young social housing tenants received from Encasa Cibeles, the front company hiding Goldman Sachs and Azora, to which Community of Madrid government has undersold almost 3,000 VPO (Public Social Housing) for 201,000,000 €.

“We are not an NGO”, they say. However, taxpayers have financed those responsible for the global and domestic financial crisis, for the acquisition of protected real estate for 201,000,000 €, valued at 300,000,000 €. Each apartment has cost them some 67,000 €, while awardees, if they wish to exercise their right to purchase, are required to pay some 150,000 €. It is noteworthy that more than half of these tenants are on minimum wage. They are long-term unemployed, single women with children, large families, migrants, disabled…” These houses are protected, they were built with all Madrilenian´s money”, neighbors claim.

Since Community of Madrid government handed social housing over to these vultures, Encasa Cibeles, in other words, Azora and Goldman Sachs, have not stopped committing irregularities. The first one was a typo mistake showing that they had acquired the 2,935 apartments, spread over 32 promotions, with its 42 stores, for 201,000 €! This error enforced a modification of the resolution, which gave the tenants enough time to appeal to court, helped by movements for the right to a home, such as the PAH. Over 80% of the people affected were able to make use of the free legal advice. But their situation is so precarious, that many of them did not even have the money for their travel expenses to go to appeal.

More irregularities

According to those affected by the sale, “Encasa Cibeles bought the 3,000 social houses with an initial capital of $ 3,000, can you believe it?” “If, by contract, the right to buy must be exercised in 2014, how can they be selling our houses in 2013?” “And why are we asked to either pay the whole rent or buy when the subsidy ends, when we are entitled to up to 8 years?” they ask. Additionally, they denounce that “shortly before the sale, the law was changed to allow the buildings to be sold together as a whole, and therefore avoid to have to give the right of first refusal, but legislation says I have to be asked”.

In recent months, the media have brought to light more wrongdoings –if not alleged crimes– committed by Goldman Sachs and Azora. They have put homes online for sale, with tenants (with hire-purchase option by contract) still living in and priced higher than IVIMA’s appraisal. In some cases, they ask more than the double of what they paid for them to the Community of Madrid. A complete private business with public money and a hint of alleged illegality. Furthermore, the affected people point out the advertisements offer non-existent things, with photographs that do not correspond to reality.

Dear Tenant, pay the real estate tax (IBI)

Recently, those affected received a letter headed “Dear Tenant”, asking them to pay the Property Tax (IBI) and the Council Refuse Collection Tax in advance. They ask an off payment of 600 or 900 €, and even offer them the possibility to split it. Facing this, the neighbours have got information from their respective councils, where they were told that even the houses’ property tax value is still unknown. The property tax is a tax paid by owners, not tenants. In fact, IVIMA never demanded it.

In any case, according to Article 20.1 LAU, the landlord and the tenant should have agreed and made known in writing, at the date of the contract, the IBI annual amount. Something that has not been done, so it should not be required, the neighbours say. Furthermore, Encasa Cibeles is asking for some payments in advance, which so far have not been paid yet by them. Moreover, it is not even known either if it is appropriate for tenants to pay or what the exact amount is. “They’re trying to raise money in any way”, the affected people complain.

As if this were not enough, the landlords are asking their mistreated tenants to help them oust the squatters who are using this social housing. In Ensanche de Vallecas, where the highest rate of affected people lives, approximately 30% of the houses are occupied by families, most of them Romani people. But the tenants have not played the landlords’ game: “Coexistence is not easy, but my problem is not squatters. My problem is how I can make ends meet with the income I have”, they say.

As for the neighbours that do pay, they are trying to separate them: “Every time a grant is over, they tell us that we have to pay the whole rent, or buy the apartment, or otherwise, end up evicted. They are also trying to separate us. They offer us different contract, different apartment, different area…”.

How do the affected people experience this situation? “It makes me sick. I see no logic. We do not have resources. They are playing with our future. I hardly sleep thinking that I might be evicted. We are told that we are fighting against the powerful: the Community of Madrid and Goldman Sachs, which, not only have economic, but also political influence”, a mother of three, whose job is “to look for job”, complains.

Private business with public money.

Cases against the transaction are piling up. In additions to the neighbour’s appeal, a criminal lawsuit presented by the Socialist Parliamentary Group of the Assembly of Madrid against the Community of Madrid and its president, Ignacio González, for funding misappropriation and perversion of justice for the public housing “bargain” sale to a private company has been admitted.

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