From the book: "Spain beyond Myths", by Carlos Alonso Zaldivar and
               Miguel Castells, Alianza Editorial, Madrid, 1992.

The main social policy issue still to be dealt in Spain is housing. A combination of economic, territorial, historical and demographic factors, plus a housing policy aimed at liberalising the sector since 1985, have thrown housing into a deep crisis which in the early nineties has become a prime source of criticism of the Socialist Government's policy, a criticism supported by certain indisputable facts.

The real estate sector and the building industry have grown, but the housing situation has worsened, mainly in large cities and at the expense of the younger generation and of newly-formed families which have had to look for homes in a rigid real estate market subject to strong speculative pressure. The current housing crisis in Spain has basically resulted in newly-formed families being kept out of the real state market because they are unable to pay the prices for homes. Housing costs throughout Spain are estimated to have risen 67% between 1987 and 1990, while family incomes during the period, according to the Survey of Family Budgets, rose less than 28%. The differential between housing costs and family incomes widened much more sharply in the large cities. The crisis led to youths becoming economically emancipated from their parents at a later age during the eighties. By 1991, they were becoming emancipated after they turned 27. The average age at which youths get married also rose in Spain over the 1980-87 period, from 24.9 to 26.3. The tragicomedy of securing a "little flat" in order to be able to marry is still a feature of courtship in Spain in the nineties. The paradoxical fact, which shows the basically speculative nature of investment in housing in recent years, is that despite the housing crisis the number of unoccupied dwellings in Spain has increased to 15.8% of the total in 1991. Added to the number of second homes, which are 15.4% of the total, this brings the total number of homes in the country which are not used as main homes to 31% in 1991.

The Socialist Party and the Government responded to the criticism during the period before the municipal elections of 1991, undertaking to embark on a new housing policy aimed at providing homes within a term of four years (1991 to 1995) for 460,000 families at prices or rents that they could afford, and to revise the Rental Act in order to improve the comparatively insecure situation in which lessees have been placed. To be able to fulfil these promises, the Government has to revise the existing financial arrangements and tax benefits, and must substantially step up public-sector spending on housing, which currently stands at between 0.7 and 0.9 of GDP (according to various estimated), the lowest level in the European Community.