Yesterday, Sánchez presented the new “España Crece” (Spain Grows) fund and claimed it will mobilize €23 billion for housing construction at a rate of 15,000 units per year. Given that the Bank of Spain estimates a shortage of 700,000 homes in the Eurozone’s fourth-largest economy to resolve the housing crisis, at the current pace of “España Crece,” housing needs would not be fully met until around the year 2070.
Sánchez presented “España Crece” as an instrument that is easier to execute than current European funds, which he noted must be completed by August 31st. The announced €23 billion does not come solely from the State, but also includes private capital recruited for the operation. Sánchez avoided re-labeling this fund as “sovereign,” as it is actually an injection of European loans into the Official Credit Institute (ICO).
The ICO (Official Credit Institute) will receive an additional €10.5 billion in equity to bolster its role as a public promotional bank, aligning it with similar institutions already operating in other European countries. According to data revealed by the Prime Minister, one-sixth of the total funds mobilized will be allocated to housing.
“The ‘Spain Grows’ (España Crece) initiative aims to mobilize up to €23 billion in public and private funds to boost the housing supply and make decisive progress in closing the housing deficit. Our goal—our purpose—is to finance the construction of 15,000 homes per year,” stated Sánchez. He added, “We aspire to reach a total investment of €120 billion by combining public and private capital.”
However, industry experts deny that the housing crisis in Spain is a financing issue. Instead, they assert that the real problems are a lack of buildable land and a lack of legal certainty.
