The Real Estate Hypocrisy of Sanchismo

The Spanish government has announced its intention to provide funding to investment funds for the development of affordable housing through Spain Crece, a financial instrument managed by the Instituto de Crédito Oficial (ICO). This move represents a significant policy reversal, coming after years of criticizing so-called "vulture funds," discrediting "predatory SMEs," and blaming property owners for the real estate crisis. Now, Prime Minister Pedro Sánchez acknowledges the need for private capital to address a problem his administration has created and failed to resolve. The shift highlights a growing recognition that public-private collaboration is essential to expand residential supply. The initiative follows a period marked by a structural deficit in housing availability, with protected housing remaining historically low, incompatible with the needs of a society struggling to access homes. After eight years in office, Sánchez can no longer solely attribute the consequences of his policies to external factors. Legal uncertainty, rent controls, and the lack of an effective strategy to mobilize land have discouraged investment, contributing to the current housing crisis. The government's decision to embrace private investment underscores the reality overriding ideological rhetoric. While the change itself is not inherently problematic, the previous vilification of investors for political gain has raised concerns among critics. The inconsistency extends beyond housing policy, with former Socialist leader Alfredo Pérez Rubalcaba warning that those who live differently from their beliefs eventually think differently. Examples include leaders opposing private education yet sending their children to private schools, self-proclaimed feminists accused of harassment, and abolitionists of prostitution using such services. One particularly controversial case involves Montse Mínguez, a socialist spokesperson whose partner, Sergi Vélez, controls a real estate network comprising at least thirty rental properties. Mínguez chaired a municipal council meeting in Lérida in 2017 that approved a zoning modification related to her partner’s property. These revelations have prompted calls for transparency and accountability from those advocating for ethical real estate practices. The government's new approach includes allowing entities such as merchant societies, temporary company groups, venture capital funds, including fund-of-funds vehicles, investment vehicles, and other legal forms to access preferential financing under Spain Crece. This initiative was previously highlighted by Sánchez and launched earlier this month with instruments aimed at boosting the supply of affordable housing. In addition to housing policy, the government is considering raising pensions shortly after the upcoming elections, scheduled for December. Both Sánchez and Economy Minister Carlos Cuerpo indicated that pension increases would occur after the election, with the government in session, rather than before. They emphasized that the increase would align with inflation rates, as mandated by recent legislative reforms. Sánchez criticized opposition parties for questioning the pension system and urged them to focus on pressing employers to raise wages instead of threatening pension cuts. The upcoming election campaign sees both the PSOE and PP targeting voters concerned about pension security, with Sánchez emphasizing the stability of the pension system and the progress made in increasing minimum wages and reducing job insecurity. He assured pensioners that their benefits would be adjusted according to inflation and called on the right-wing parties to engage with business groups to ensure wage increases that sustain the pension system.