“We should regulate rent prices throughout the Balearic Islands,” claims Eduardo Robsy

Eduardo Robsy (Maó, 1976) is the head of the Balearic Islands Government’s Directorate General of Housing in a climate of inaccessible rentals and impossible purchases because it is solely built for foreigners with high purchasing power. The Conselleria has just completed the interim expropriation of sixteen flats for social rent from major owners, including five in Eivissa.

When will the first families be able to move into the expropriated flats?

There are two flats that do not require any intervention and will be assigned. However, it is difficult to specify a certain date because it is a very uncertain process. You must proceed in order and notify the first families on Ibavi’s list. And this is when the issues arise, either they do not answer the phone or have moved their address. We can’t move on to the next one if we don’t have the first name, so it isn’t a very agile process. We’ve changed the registration and adjudication mechanism because we can’t ensure that everyone who registers meets the requirements right now. Six months, in my opinion, is a reasonable amount of time to resolve the allocations and the little remodeling work that needs to be done in the other flats.

The banks that own the sixteen expropriated apartments have begun legal steps to reclaim them. Were you taken aback by this belligerence?

No, not at all. It was obvious when we began working on the first draft of the law. The banking executives then took it upon themselves to tell us whatever they thought. Even the president of the National Commission for Markets and Competition permitted himself to send letters, which I won’t call threatening, but they should be treated seriously. And, at every step, major holdings and vulture funds, which we all have in our minds, have been present via very important legal firms. So far, however, the courts have decided in our favor. We’ll see whether there’s a decision on the merits of the case, but it’s a good sign that the banks have lost their sense of utter impunity, which they’ve had for a long time.

What would happen to the families that were given the properties if the court ruled against them? Would they have to vacate the apartments?

Because of the way the case is written, I believe it would be tough. The most likely outcome is that there will be a pricing disagreement and a correction. But all we’ve done is carried out a legal mandate. If we had made a mistake in the formulation, a judge would have already delayed the procedure, taking the preventive steps sought by the owners for granted. If we run into that issue, we will argue that the signed rental contracts are valid and must be followed.

Is it possible to initiate additional expropriation proceedings?

We have roughly 700 empty flats from significant tenants on our list. However, their communication has been weak in many cases, and some have even told us of flats that they have rented. What we do have, on the other hand, is housing in general. And for social renting, we are looking for multi-family flats with specified qualities. We exclude really large units or those with community swimming pools, for example. Or flats that require extensive renovation. To know what we have, we need to delete the present list. I’d like to believe that if we do a second file, it will serve as a deterrence, and that banks will speed up the sale and renting of these apartments. It’s an incentive for them to put them on the market since they can’t keep them empty indefinitely.

Aside from the properties on the registry, how many unoccupied flats have remained on the Balearic Islands for at least two years that could be expropriated?

We believe that, based on the inspections we have conducted, there are no significant pockets of noncompliance outside of the register. There aren’t many that fulfill our criteria: they’re in livable condition, they’ve been closed for at least two years, and they’re not unlawfully occupied. When big numbers are provided, I don’t take them at face value. A census is being conducted to update the data from the previous one, which was conducted in 2011, and we will have a more accurate picture. In any event, the Balearic Islands’ housing crisis is caused by a variety of circumstances, and there is no one-size-fits-all answer.

We also need to construct public housing.

Ibavi has historically created subsidized housing on a sale-purchase basis because, not long ago, everyone aspired to be a homeowner. As a result, the public housing stock that we currently administer is quite tiny, especially when compared to the state average, which is already low in comparison to Europe. Because we come from a situation where nothing was done, public housing must be created continually over time.

At the start of the legislature, then-councilor Marc Pons promised to quadruple the amount of subsidized homes in the Balearic Islands. Do you believe it’s possible?

It appears to be a little difficult to me. We have attached the commitment to expand the park in a thousand dwellings, a 60% increase. To continue, we would need more land and funding than we currently have. The major issue with housing policy is that, on the one hand, they are prohibitively expensive. On the other side, they are time-consuming. We have an immediate problem, yet a public housing complex takes at least two years to complete.

The central government is working on a housing regulation that will cap rental pricing in high-crime zones. What might these areas in the Balearic Islands look like?

Housing is a major issue on the islands, particularly for demographic reasons. More people are arriving, and there is a high demand. It does not make sense that on the same island, certain regions are classified to be under stress while others are not. We recognize that in order for the measure to be effective, it must be expanded across the entire archipelago.

Even taking into consideration that the issues in Eivissa and Menorca are distinct?

Eivissa and Formentera are a few years ahead, but the dynamic is the same across the board: a surge in prices due to investment in residential properties by foreign individuals with very high purchasing power.

This rental price control has been criticized by economists. As an economist, do you believe it will be an effective measure?

Yes, but it must be done properly. There are obvious concerns, such as the renter signing a contract and then demanding the difference in price in dirty money from the landlord. Or demand constraints; if the price is extremely low, some landlords will refuse to rent. But it’s a good starting point. It is the one with the greatest potential to have the most immediate impact of all the ones we can see. Tax breaks for landlords are excellent, but they only make sense when you conclude or start the contract; their effects are not instantly passed to the rent.

Are you concerned that only high-end homes for the very wealthy are being developed on the Balearic Islands?

Obviously, sure. The complaint, which is shared by builders and developers, is that no product is being developed for the middle classes. This, combined with the forecast of continuous population growth until at least 2035, necessitates the expansion of housing supply at reasonable prices. On the one hand, we must state unequivocally our commitment to rehabilitation. On the other hand, we need to figure out how to develop housing at a reasonable cost. The issue in many island towns is that urban planning is not very intensive; a relatively low number of dwellings per hectare is set, forcing developers to build very huge flats. These are the ones that find their way onto the luxury market. We must shift to a smaller, more affordable housing model that is more in tune with the realities of today’s families, which are becoming increasingly small. Even if only for one person.