On Tuesday, the Spanish Government approved the 2026-2030 Housing Plan, under which it will provide €100.5 million of a €168 million package for the Balearics. The Balearic Government will have to contribute the rest, this being the first time that regional governments have been required to make contributions of 40%.
One of the key measures in the plan relates to grants for developers of public housing. The intention is to finance the construction of public housing for rent in collaboration with developers through grants of up to €85,000 per property. The maximum rent would be €900. In municipalities with fewer than 10,000 people, there will be the possibility of making this public housing available for sale as well.
The Balearic Government's 'Safe Rental' programme is to be adopted by the Spanish Government, and the plan will provide grants of up to €17,000 for homeowners who transfer a property to a regional government as part of this programme, provided the rent is capped at €600. If the property is located in a high-demand area, the grant will be €25,000. An additional €12,000 will be allocated to finance renovations of the transferred properties.
Another measure involves grants of up to €30,000 for rehabilitating empty homes - ones that have been vacant for more than two years, provided these homes are for affordable rental for at least five years. If the home is located in a rural area, the grant can be up to €35,000.
The 40% contribution is in principle, as there is at least one measure by which the Balearic Government would only need to put up a maximum of 30%. Madrid will provide funds to regional governments to purchase homes both directly and through the right of first refusal. The Spanish Government could push its contribution up to 85% if the properties are in so-called high-demand or stressed areas.
The snag is that the Balearic Government has refused to declare such areas, despite the fact that rents are among the highest in Spain. The reason why is that they entail the introduction of rent caps, which the regional government argues would be counterproductive as housing would be removed from the market.
The Balearics are in fact likely to miss out on extra funding precisely because of the government's refusal. There is to be additional aid for regions that have declared stressed areas and therefore established caps.
Nevertheless, the Balearic Government believes it will qualify for additional funding, given that there is a law that considers the Balearics to be in a housing emergency. As far as the Prohens administration is concerned, this amounts to much the same thing as the funds for stressed areas.