Article written by Lorenzo Alonso Felipe, CEO of Avalmadrid
Access to housing has become one of the major social and economic challenges of our time. In Spain, and especially in dynamic regions like the Community of Madrid, more and more people are finding it difficult to access decent housing at a reasonable price. This is not an isolated perception or a temporary concern. It is a reality that affects thousands of young people who are delaying leaving home, families who are dedicating a growing percentage of their income to rent or mortgage payments and workers who are forced to live increasingly further from their workplaces.
When we talk about housing, we are essentially talking about life plans. We are talking about being able to start a family, the stability needed to build a future and the peace of mind that comes from knowing your home isn't constantly at risk of becoming an unattainable luxury. That is why the housing debate shouldn't be approached solely from the perspective of the real estate market or the current economic situation. Above all, it is a social issue.
For years, housing construction has failed to keep up with the demands of a growing economy like Madrid's. Demand has continued to increase – due to population growth, the attraction of talent and the region's own economic vitality – while supply has not been able to keep pace.
The consequences of this imbalance are well-known: mounting pressure on prices and a widespread sense that decent housing is becoming an uphill battle. Yet public debate tends to focus on the symptoms – rising rents and purchase prices – rather than the underlying causes. And the root cause is simple: there is not enough affordable housing.
Tackling this problem demands both a broad perspective and a dose of realism. Housing is a complex sector where urban planning, land availability, financing, development capacity and legal certainty all intersect – and this is before even factoring in the energy demands of new neighbourhoods. When any one of these elements breaks down, the entire system feels the strain.
One of the keys: financing for developable land
Land is perhaps the most critical factor of all. Without developable plots and urban planning frameworks that expand the housing stock, any significant increase in supply remains out of reach. Yet even when land is designated for subsidised housing, another obstacle frequently emerges – less visible to the public, but equally decisive – namely, the financing needed to acquire that land and develop the projects.
Subsidised housing operates under its own distinct conditions. Margins are tighter, and the goal is not solely economic but social. As a result, certain project phases – particularly land acquisition – can make access to credit considerably more challenging than in conventional developments.
If we are genuinely committed to expanding the supply of affordable housing, viable projects must secure the financial backing needed to move forward. This is precisely where public-private collaboration proves indispensable. Governments are central to land development and urban planning, but bringing projects to life and mobilising investment also demands the active involvement of developers and the financial system.
Objective: more than 8,000 new homes in the coming years
At Avalmadrid, we know this intersection well. As the mutual guarantee society of the Community of Madrid, our mission is to help SMEs and businesses access financing on better terms – enabling them to bring their projects to life. In recent years, we have seen how this role can be just as valuable in the housing sector.
It is with this in mind that, together with the Community of Madrid, we have launched a dedicated programme to support the financing of land acquisition for affordable housing. The objective is clear: to help projects with a genuine social purpose move forward more easily.
This instrument enables developers and cooperatives to access bank loans with stronger guarantees during one of the most demanding phases of the entire process. In practical terms, this translates into something tangible: a greater likelihood that land designated for subsidised housing will actually become homes. The potential scale of this initiative is significant – it could mobilise nearly €900 million in land investment for subsidised housing across the Community of Madrid, contributing to the delivery of more than 8,000 new homes in the years ahead.
Yet beyond the figures lies something more important: the logic underpinning initiatives of this kind. The solution to the housing crisis will not come from any single measure or institution. It will emerge from the accumulation of many coherent decisions that allow the system to work as it must.
Long-term perspective
What is needed is more available land, faster urban development, greater security for investors and financial instruments that allow projects to become a reality.
But there is something else that is too often missing from public debate: a long-term vision. Housing is not built overnight. From the moment a plot of land is identified to the moment a family crosses the threshold of their new home, years can pass. That is precisely why the conditions for future supply must start being built today.
At Avalmadrid, we see our role as extending well beyond the issuing of loan guarantees. Our purpose is to contribute to the economic and social development of the region – and that means standing behind projects that generate activity, employment and opportunity.
Housing is perhaps the area where this responsibility becomes most tangible. Because behind every development, there are not just bricks and investment figures – people are waiting for the chance to build their lives.
If we want our cities to remain places where people can truly live, work and pursue their aspirations, we must acknowledge that access to affordable housing is a shared responsibility. In this endeavour, public institutions, developers and financial entities each have an indispensable role to play.
