Aims and Objectives
To facilitate access to privately-rented housing for people with limited financial means.
Although the Spanish Constitution recognises ‘the right to enjoy decent and adequate housing’, public housing policies have prioritised one particular form of tenure, home ownership, and there is limited availability of housing in other tenures for those who cannot afford, or do not want, to be home owners. State intervention is mainly through market mechanisms – financial support though reduced interest rates, subsidies and tax exemptions for home owners. Nationally 82 per cent of housing is privately owned, the second highest percentage in Europe, 8.5 per cent is privately rented and 9.5 per cent socially rented. It is not easy to increase the supply of rented housing with the consequence that a significant part of the population struggles to find decent housing, among them many people with social difficulties. The continuous increase in house and rental prices has forced an increase in the percentage of their income that people have to pay for accommodation, in many cases over 40 per cent. Overcrowding is one result of this, with poor living conditions for those who cannot afford to buy their own homes, or are ineligible for social rental. In 2007, over two million homes were empty in Spain.
Provivienda’s key areas of work are Residential Mediation (including providing information, advice and legal services, rental mediation, negotiating mortgages for young people, and managing housing registers); Residential Inclusion (providing housing with social support for vulnerable groups such as migrants and women victims of gender violence) and Technical Assistance (technical and legal advice and setting up programmes based on Provivienda’s own experience).
The Rental Mediation Programme mediates between property owners and individuals with low incomes and limited social support, to open up opportunities in the rental market that would not otherwise be available. In particular it works to ensure access to housing for individuals with low incomes and limited social support, especially the young, ethnic minorities, refugees, immigrants, those with physical or mental disabilities, single parent families, exiles, homeless persons, older persons and others at risk or socially vulnerable. Landlords are typically wary of renting, or impose abusive contractual terms, for those they perceive as having insecure/irregular employment. Provivienda addresses this by arranging multi-risk insurance guarantees for rental payment, either through an insurance company or, more often, providing these guarantees themselves. Agreed rents are approximately 20 per cent lower than market rents, but still attractive for landlords, particularly those whose property was standing empty. Starting in Madrid in 1990, the programme has now spread to other regions in Spain, housing in total 87,000 people in the last 20 years. It also meets a broader range of needs, including the provision of mortgages for young people and directly providing shared accommodation and supported housing for those with social or economic problems, for whom the rental mediation programme is not immediately appropriate. It works in collaboration with local authorities, who largely fund its activities and refer the residents. The guarantees offered by the programme to ensure that rent is paid by the tenants are provided through an external insurance company or directly by a Provivienda bank guarantee. These guarantees serve to attract landlords, though in practice they are rarely called upon, as incidences of unpaid rents are very low. Many landlords, for example, are concerned about renting to immigrants, but rates of rent payment are good and it is often not necessary to invoke the insurance offered by the programme.
Private rental leases are extended annually for a minimum of five years, although the tenant can leave with 30 days notice prior to the contract ending. The Provivienda arranged guarantee is provided typically for the first year and after this the lease continues between the two parties without further guarantee, although the period of cover can sometimes be extended up to five years, if needs be. Provivienda also provides a range of services including information and training to tenants and landlords on their rights and obligations under tenancy law; assessment of rental properties including valuations and furniture inventories, selection and invitation of applicants for identified properties, drafting of contracts and follow-up and assistance over problems, termination of contracts, defaults etc. These services are provided without any charge. Provivienda also occasionally funds refurbishment of properties that owners cannot afford to upgrade and in return receives the rents over a contractually agreed time period. It also makes arrangements for those single people who do not have friends to share with to move in with others, in what they term ‘Living Groups’. Currently 24 per cent of tenancies are let on this basis.
The total income received by Provivienda in 2010 to deliver its programme was US$7,070,000 with a small surplus made of US$30,600, 90.5 per cent of the funds coming from contracts with municipalities and eight per cent was from grants (mostly from social programmes of savings banks) with the remainder from Provivienda’s own reserves / funds. Staff costs are the major expense, accounting for 69 per cent of expenditure.
- The provision of social support creates greater stability and independence in tenants.
- Increased supply of affordable housing for those on low incomes, with rents being anywhere between 10 and 30 per cent lower than market rent.
- Bringing empty properties back into use helps improve vibrancy of residential areas.
- Improved attitude of landlords towards tenants.
- Greater social interaction between private tenants and their local communities
The programme has been adopted in some areas by local authorities and replicated as a public service, albeit generally with some modifications.
The programme has been incorporated within housing and other policy measures for youth and people at risk of exclusion at a national and regional level. For example, it is in the Ministry of Housing’s State Housing and Rehabilitation Plan 2009-2012 and the National Action Plan for Social Inclusion 2008-2010 of the Ministry of Health, Social Policy and Equity. It is also included in most regional plans e.g. Canary Islands Housing Plan and the Youth Housing Plan of Catalonia. Provivienda participated in the consultation phase of the Ministry of Labour and Immigration’s Strategy Plan for the Integration of Immigrants 2007-2010 and the Community of Madrid’s Regional Plan for Integration.
Why is it innovative?
- Social intervention in the private rental market, which addresses the needs of both landlords and tenants.
- The use of the rental guarantees helps bring empty homes back into use and increase the affordable rental stock, with the reduced rent level negotiated to reflect the guarantee provided.
- The focus on different needs and opportunities of women and female lone-parents as tenants and co-tenants. For example, 57 per cent of leaseholders in Madrid in 2009 were single mothers
- The ‘Living Group’ housing arrangement, whereby individuals without other family / living networks are brought together under a group lease arrangement to share a house or apartment.
- Emphasis on speed of response to demand – average waiting time is between one and two months for landlords at present given the larger number of properties available and reduced demand due to the economic crisis.
- Where the programme identifies other needs, it establishes new programmes to accommodate these needs, for example a re-housing programme for victims of gender violence and an integrated support programme for immigrants.
What is the environmental impact?
- By bringing empty properties back into use, efficient use is made of existing buildings.
- By stressing the importance of offering housing close to work, social and other ties, the programme has an impact on the environment by reducing travel to work / school.
- Although some training is provided at the start of a tenancy with regard to giving residents a greater awareness of recycling and responsible use of gas, water, electricity etc, the main focus of the project is not here.
- Landlords are encouraged to replace old, inefficient heating systems and to improve insulation, which some of them do.
Is it financially sustainable?
The programme receives considerable public funding, since it is generally executed in partnership with a municipal authority. However, Provivienda has been successful in establishing the model in a diverse number of locations, with a variety of institutional partners, thereby spreading the risk of over-dependence on a single funding stream. Minor budget reductions have been imposed in the last two years, although the current economic crisis has caused major problems with non-payment on government contracts in the last six months. Provivienda has built up its own funds over the last 20 years to be able to use as a guarantee fund and other emergency needs, although these are now being rapidly depleted.
The programme creates stability and reduces mobility, which brings substantial financial benefits for private tenants as well as helping create a greater permanence, which is of benefit to the local community.
For landlords, particularly older persons on low pensions with a property to let, the programme can restore a reliable and important income stream.
The lower rent level means that the percentage of income devoted to housing costs is reduced from the high rates of 40 per cent being paid by some households.
Ninety per cent of leases continue once the guarantee in the first year has expired. Many properties are re-entered into the portfolio at the end of the five year period, enabling a long-term increase in the supply of affordable stock.
Grants and advances are used to help tenants to pay rents during a difficult time, for example when unemployed, thereby preventing homelessness.
What is the social impact?
- Private tenants form a diverse group, which is characteristically less likely to generate community links. However, by encouraging longer-term stability in the rental market and enabling people to live where they want to live, the programme facilitates community integration, particularly in respect of education and leisure activities.
- The shared living approach helps bring people into social groups where previously they did not have those linkages.
- The demand for social support often reduces by the second year of a lease, indicating that the intervention encourages self-autonomy and independence.
- Training is provided in a range of life skills, including the basic information on landlord and tenant law, so that tenants are more aware of their rights.
- By preventing homelessness and reducing vulnerability, the programme benefits the mental health of people disadvantaged in the housing market and their physical health by providing decent, appropriate, secure rented accommodation.
- The programme enables private tenants to participate as active citizens. By exercising choice over where one lives, the right to participation and to being a ‘visible citizen’ is enhanced.
- Provivienda’s additional support programmes are specifically aimed at reducing social inequalities e.g. by working with immigrants, young people, slum dwellers and a range of other vulnerable people.
- Landlords are not permitted to choose the tenants who will occupy their property under this approach, thus preventing exclusion on the basis of racial groups, single parent households
- Increased knowledge of rights, legal advice etc. opens up the possibility of a more active role in society for tenants, as well as providing stability. Residential stability allows for greater involvement in the local community.
- Constant fluctuation in the private housing market, both in rent levels and regulations, requires continual revision of the Programme’s tools and methods of working. Flexibility in the model is essential to address this.
- Spain’s economic crisis has not resulted in a significant decrease in house prices or rents but has made access to credit more difficult as well as causing rising unemployment.
- Some applicants do not qualify for the programme due to the minimum income requirement. Provivienda has therefore worked with other agencies to design alternative residential facilities for less economically independent people.
- Differing levels of connection between housing and social services in different autonomous communities. Some authorities integrate housing and social services well e.g. providing rental subsidies or grants, and others do not.
- Funding barriers as cuts have been made by government in its social expenditure.
- Where the government has taken on the programme as a public service, it is often less flexible and more bureaucratic, losing out on some of the key successes of Provivienda’s own approach e.g. rapid response, attentive listening.
- Secure housing has a positive impact on well-being and self-esteem.
- Importance of intervention rests not only in respecting the right to housing but in providing a comprehensive social service.
- Location is important to participants who want to be able to live where they have solid social networks and/or are near to work, social and health services, schools etc.
- Having a flexible model is important, so that it can be adapted to changing contexts.
- Aspects of the programme most valued by participants are close interaction with professionals and attention to individual circumstances; effective, rapid solutions to problems; fitting type of accommodation to needs; guarantees; flexibility over monthly payments; guidance on education, health, employment etc.; easy access to staff and personal visits to homes.
- Specific role for each professional, rotating work in order that each staff member gains a global view of the project and develops a collective sense of purpose, a strong commitment and job satisfaction.
- Good information systems and tools for confronting conflicts are important.
Satisfaction surveys are sent to landlords and tenants and interviews are carried out with tenants. Discussion groups, meetings, workshops and group sessions are also used to evaluate the project. Regular monitoring (as well as training of professionals) is undertaken by the government under its agreements with Provivienda. The publication Manual de Buenas Practicas (Good Practice Manual – 2006) is based on an evaluation of the programme.
Geographically, since its beginnings in 1990, the programme has been scaled up within the autonomous region of Madrid and extended to other autonomous regions, currently in Valencia, Canaria and Catalonia, where it is operating within 25 municipalities. It has been extended from young people, to cover others at risk of social exclusion. The Good Practice Manual prepared by Provivienda (2006) was subsidised by Madrid Council in order to plan and improve future extensions of the work.
The model has been taken up by local authorities within the autonomous region of Madrid and in all the autonomous regions of Spain, although there are some concerns that the levels of support provided are not exactly those of Provivienda’s approach; as well as by NGOs e.g. Goiztiri Association, Adsis Foundation and ProHabitatge.
There has been interest in some elements of the model in Italy (Italian Cooperative ‘ABN’) and Colombia (Councillors and Development Secretary of Medellin), but this has yet to be delivered on the ground.
National government, NGO, Umbrella, Local government