Article 47 of the Spanish Constitution states that, as Spanish citizens, we have the right to both dignified and adecuate housing. And even more, that the public authorities must ensure the necessary conditions and establish the relevant standards in order to implement this law, regulating that land be used in accordance with the interests of the general public to prevent speculation and that the community participates in the capital gains generated by urban activities of public entities.
In 2006, Miloon Kothari, the United Nations Special Rapporteur on the Right for Adequate Housing, came to Spain on an official mission in order to evaulate the housing situation in our country. Led by the Observatorio de Derechos Humanos DESC, he had the opportunity to meet various members of collectives and social movements in Barcelona, Madrid, and Sevilla. He also interviewed public institutions and various public offices, among them the Ministry of Housing. This Ministry was launched two years prior with the mandate to guarantee everybody the right to housing. Months after the visit, the Rapporteur issued a devastating report which concluded that the right to housing in Spain had been systematically violated, and that the public administrations were totally complicit in this infringement. The report, which had a great impact in the media, denounced the commodification process which housing (and, by extension cities) had been subjected to. At the same time, it urged the State to implement a series of measures in order to deal with the situation before it was too late.
The real-estate party
In a bid towards fast and easy growth, Spain devoted itself to the real estate market over the many years, constructing more homes than in Germany, Italy, and France combined. But this overproduction did not translate into greater accessibility. In contrast to the neoliberal dogma, prices continued to rise, making the cost of living in Spain one of the most expensive in the European Union.
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Among others, two key elements explain this paradox: on the one hand, low interest rates and deregulation of credit allowed banks to loan as much money and to as many people who wanted it, which they did for a long time; on the other hand, the possibility of leaving millions of homes empty for purposes of speculation and without any kind of penalty. Based on this model, the State facilitated the confusion between the right to housing and the guarantee of access to easy credit, which drove the impulse towards private property beyond reasonable limits and put a better part of the population deep in debt.
For years, people listened to only one message repeated by real estate agencies, promotors, contractors, financial entities as well as the media: that housing was a secure investment and that housing prices would never go down. These messages were institutionalized by the voices of public administrations. The Ministry of Housing stated that now was the time to buy, year after year, while the Ministry of Finance cultivated the necessary conditions accompanying these messages by putting forward policies that encouraged people to indebt themselves: a fiscal policy that provided tax reductions on home purchase, a land policy that encouraged speculation, deregulation of the rental market that overruled any real alternative to home ownership and made public housing insignificant. Despite the constitutional mandate, Spain never developed a policy directly aimed at guaranteeing the right to housing. In fact, it focused instead on putting forward an economic policy in which the commodification of housing became a generous source of income for certain private as well as government sectors.
The drama in numbers
But things can always get worse. If during the real estate bubble, Spain was one of the countries within the European Union where high prices made it difficult to access housing, the bursting of the housing bubble and onset of the crisis added this dilemma of access to the loss of thousands of homes by people who, according to statistics, had already solved the first problem. With an unemployment level of 22%, more than 5 million people with no paying job and 1.4 million homes where every family member is unemployed, it is easy to have a sense of the magnitude of the mortgage tragedy.
According to the data provided by the judiciary, between 2007 and the third quarter in 2011, 349,438 foreclosures were initiated throughout Spain. According to data from 2011, 212 processes are initiated each day, that is, 6,360 per month.
Although not all of these foreclosure processes apply to primary residences, in most cases they do. One also has to take into account that the process of foreclosure affects not just the individual but the entire family. Furthermore, a single foreclosure usually involves more than one home, as financial institutions (aware of the risks involving in granting subprime mortgages) demanded co-signed guarantees, quite often none other than the homes of close family members, particularly parents. What most of the people signing these mortgages were not aware of was that co-signers must respond to foreclosure with all their present and future assests in exactly the same way required by the mortage holders. For this reason, one foreclosure process could result in the loss of two or three family housing units. Under these circumstances, we start to talk about a problem that, directly or indirectly, affects more than two million people, a number that could double in the coming years, with no forecast predicting the end of the recession.
With this level of affected it's not so strange that the Platform for those Affected by the Mortgage Crisis (PAH) emerged. The first valuable contribution made by the PAH was to visualize the number of foreclosures taking place, to put on the table the legal anomaly present within the Spanish foreclosure procedure that often has devastating consequences. In Spain, handing the home back to the bank is not enough to pay off the debt as the loan rests on the person and not the mortgaged property which is only a guarantee and, in the case of default, is not considered enough to erase the debt. In a situation of non-payment, the home goes up for auction and if the auction is unsuccessful, which happens in 90% of the cases in the era of the crisis, the financial institution can revalue the home at 60% of its original price (although recently little it was 50%). The difference in the debt which doesn't fall within this 60%, plus the default interest and legal costs of the process (both very high) leaves an outstanding debt to a former home owner. Additionally, this is a debt that continues generating interest, making it impossible to overcome.
The result of this anachronistic legislation is a contemporary version of slavery; those who committed the mistake of signing a mortgage are financially condemned for life. It is also not just that the bank that may exercise its right to claim the remaining debt, either by appraising the value of possessions by the debtor or seizing a portion of his income. In addition, the debtor becomes a deliquent in publicly accessible files, such as files on nonfulfillment of monetary obligations (Asnef or Badexcug) and the Record of Unpaid Acceptances (RAI). Thus, an eviction entails financial condemnation which results in social exclusion. An individual may be repossessed for life (payrolls, bank accounts, inheritances, etc) and have serious difficulties in leading a dignified life, as appearing on a list of defaulters could become an obstacle for finding work, renting a home, obtaining a telephone contract or even receiving public assistance. Just for wanting to obtain a place to live, a primary and necessary good recognized as a fundamental right, one becomes an outlaw with no solution in sight. Of course, this serious violation of the right to housing implies the violation of other fundamental and interdependent rights, such as the right to health. The anxiety felt before an impending eviction and the financial death of families causes severe psychological disorders, which on occasion result in, among others, violent episodes, alcoholism, child neglect, family tensions, increase in domestic violence and suicide attempts.
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