Town Halls to impose fines of up to 100,000 euros on banks and companies with empty flats

Barcelona is one of many Town Halls to follow Terrassa Town Hall’s initiative to approve a motion for fining banks and large companies which own empty flats. Some other towns are considering following suit after receiving the Platform for People Affected by Mortgages(Plataforma d’Afectats per la Hipoteca – PAH) motion. Meanwhile, the Catalan government is working on a new tax with the same objective.

Barcelona (ACN).- The industrial town of Terrassa, 50 km from Barcelona, was the first municipality to approve a motion to penalise banks and big companies for owning flats without tenants. Many other Catalan towns and cities, such as Sabadell, Manresa, Girona, Cornellà and Tarragona have followed suit. All of them have approved the motion in Town Hall plenary sessions without opposition. In Barcelona an institutional declaration has been approved with the same objective. In the Catalan capital any owner to be discovered with an empty flat will have to face up to three 100,000 euro fines if he did not take measures. In Lleida a similar motion has also been approved, while fining banks is not foreseen. The Platform for People Affected by Mortgages (Plataforma d’Afectats per la Hipoteca – PAH – in Catalan) sent all Catalan political parties a motion to be approved in all 945 Catalan municipalities. Carles Sala, Secretary for Housing and Urban Improvement, casts doubts on the efficiency that these sanctions may have on the number of council rented flats.

The Town Halls of Terrassa, Sabadell, Manresa, Vilanova i la Geltrú, Cornellà (all of them in the Province of Barcelona), Girona and Tarragona have sanctioned a motion to fine banks and companies which possess empty flats. Town Halls may execute this action thanks to a Catalan housing law from 2007.

In most cases, the motion has been approved by unanimity. In the case of Girona, the first provincial capital to make this step, the initiative was led by the Catalan Green Socialist Party (ICV) and the Radical Left-wing and Independence Party (CUP) and presented in the Town Hall plenary session together with the Catalan Socialist Party (PSC). The Centre-Right Catalan Nationalist Coalition (CiU) and the Catalan branch of the Conservative People’s Party (PPC) abstained during the vote.

Barcelona’s institutional declaration

The Catalan capital’s Town Hall has made an institutional declaration backing the demands of the Mortgage Plataform (PAH) in emergency housing issues. It also compromises the City Council to “detect and register” all empty flats in Barcelona, starting by the ones owned by banks and big companies. The task will be developed by a research project which includes “crossing data from the administration or carrying out at a field inspection”. If a non-occupied dwelling is found, the owner will be advised and, if after a fixed period the flat was still empty the owner would be fined “up to 100,000 euros”. All the parties in the Town Hall supported this declaration except the Catalan branch of the Conservative People’s Party (PPC).

The difference in Lleida

In Lleida’s City Hall the Mortgage Platform (PAH) motion was rejected, but the Catalan Socialist Party (PSC) approved the idea using its absolute majority. This measures foresees opening disciplinary files on banks after requests when they “default onthe social use of housing”, but declines to fine banks in any case.

The Housing and Urban Improvement Secretary questions its effectiveness

Carles Sala, Housing and Urban Improvement Secretary of the Catalan Government, has explained his doubts about the approval of this motion. “The financial entities would not be incurring any illegality if they had the flat rented at market price, but this is not the case and is where evictions happen”, said Sala who expressed his aim of forcing these flats to be rented at a socially acquirable price. He also advised Town Halls to cover themselves legally, so as not to give banks the possibility of winning in court.

At the same time, the Catalan Government is about to apply a new tax on empty flats which will be charged to banks. This measure, as Carles Sala confirms, has been safeguarded juridically so as not to be questioned.

The importance of this measure

Since the explosion of the crisis housing has been one of the central problems for the families. Nowadays, Spain is facing a contradictory situation of “people without houses and houses without people”, according to activists in the Platform for People Affected by Mortgages (PAH).

Evictions have been daily bread. The Catalan first instance courts ordered nearly 70,000 foreclosures between 2008 and 2012, according to the last data released by the Spanish Judicial Power Council (CGPJ).

On the other hand, there is an excess of 400,000 apartments in Catalonia, as calculated by the real estate appraisal company Tinsa. The official data for empty flats hasn’t been updated since 2011, but then the National Statistics Institute published that there were 3.5 million empty dwellings in Spain out of more than 25 million houses. It was estimated that 800,000 of the empty properties were owned by banks. In Catalonia, there were 3 million houses and 500,000 of them were unoccupied. 

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