The bursting of the housing bubble and the economic crisis in Spain brought years of increases in the number of evictions, especially as many families were unable to pay their mortgages, and it was also impossible for many young people to become financially independent in the face of low wages. At the time, many experts turned to Article 47 of the Spanish Constitution, which speaks of the right to decent housing, to denounce the lack of help from institutions and private companies.
Today, with the crisis over, this article is once again on the lips of politicians and social movements alike to demand decent housing in the face of rising house prices both for purchase and rent in certain Spanish cities, especially Madrid and Barcelona.
From a legal point of view, Article 47 of the Spanish Constitution is a principle of social and economic policy, not a fundamental right, a criticism by some parties and social movements. In practice, this means that this principle should not be binding on the legislator, with the aim of transforming it into law through the ordinary activity of legislators. But as it is not a fundamental right, there is a wider margin for ideological interpretations, as Javier Burón, housing manager for the Barcelona City Council, makes clear.
Meanwhile, Javier Rodríguez Heredia, investment director of Azora Europe, insists that it is not a fundamental right, so it doesn’t stand above everything else and "defending it cannot come at the expense of attacking Rights and Freedoms of the Constitution, such as the right to private property (art. 33) or the right to freedom of enterprise in a market economy (art. 38), the guarantee and protection of which corresponds precisely to the public powers according to the Constitution itself".
José Luis Ruiz Bartolomé, real estate consultant and analyst, highlights two interpretations of Article 47:
- One of them is "from a collectivist or communist position, which interprets it as the recognition of a real and effective right to have a home," says Ruiz Bartolomé. But the expert's objection to this interpretation is that it is a mere guiding principle of socioeconomic policy and not a fundamental right, such as the right to private property and inheritance. "Therefore, and inasmuch as it would be harmful to these specially protected rights, the communist interpretation of the precept has no place in our legal system no matter how much some people are insisting right now," he says.
- The other interpretation is that the Constitution recognises the right that citizens have for the powers that be to guarantee, from the point of view of equality of opportunity and respect for private property, that the housing offered by the market is dignified and adequate. "In fact, the article must be read in its entirety, not just the first sentence, which can lead to confusion," insists Ruiz Bartolomé.
"This reading is compatible with the fact that a social and democratic state governed by the rule of law such as ours has among its powers that of providing a roof for those who are excluded or threatened with social exclusion," he adds.
In general terms, when speaking of the right to decent housing, it almost always refers only to the first sentence of Article 47: "All Spaniards have the right to enjoy decent and adequate housing.” But the rest of the article, which is equally as important, if not more so, is often ignored:
"The public authorities will promote the necessary conditions and will establish the pertinent laws to make effective this right, regulating the use of the land in accordance with the general interest to prevent speculation.
“The community will participate in the capital gains generated by the urban development of public entities.”
The role of public authorities and land use in Spain
Article 47 refers to the role of the Public Administration in giving effect to this right. In this sense, Javier Rodríguez emphasises that it is not the responsibility of private companies. He adds that in order to promote this guiding principle, "the use of land should be regulated to avoid speculation. It is unheard of that, with the creation of the urban land being in the hands of public powers, this is a scarce good. And it is also unusual that with the regulation of land being in the hands of the administration, it has not been regulated to make it profitable to manufacture subsidised housing at affordable prices below the market average.”
"It is clear that the law urges politicians to promote healthy and balanced market conditions, away from speculative bubbles," stresses Ruiz Bartolomé.
Javier Burón, on the other hand, points out that, although the article speaks directly about public authorities, they are not the only ones to promote the conditions for making the right to decent housing effective; there must also be input from private entities for it to become a reality. "The means that exist are not sufficient to facilitate a public policy that produces these results. And not only is it a question of building new constructions, but there is also the option of buying residential buildings or rehabilitating buildings," he adds.
Article 47 also mentions land as an element to prevent speculation. Mikel Echavarren, CEO of Colliers España, believes that what was meant in that article was that in order to avoid possible speculations in the housing market, the Public Administrations would manage and protect the development of the cost of land through the urban instruments they have at their disposal.
"In other words, in no case is it indicated that they would intervene directly in the housing market, but that their tools would focus exclusively or fundamentally on preventing market speculation on land. Therefore, this is precisely the type of management they should focus on, and in which they have failed miserably to delay the processes of urban development, favouring the increase in land cost and adding uncertainties that undermine the right to housing. In short, their lack of diligence in the efficient management of land development has caused the right to access to housing to be limited," Echavarren said.
The role of capital gains tax in financing urban development
Finally, capital gains are also spoken of in an abstract manner in article 47. Javier Rodríguez Heredia clarifies that what this paragraph means is that it is the capital gains tax from urban development, and not from private savings, that should finance this guiding principle. "With a public housing stock 10 times less than what the rest of Europe has, we wonder what has happened to all the money that has been generated with the transfer of land to administrations over the past 20 years," he says.
He criticizes the fact that only the first line of article 47 is read to "justify market intervention, to demand that private savers and institutional investors make up for the absence of an affordable public housing stock, 15 years of an absence of housing policies and the diversion of the capital gains funds from urban development to ends other than promoting the right to decent housing.”