American investment firms, especially Blackstone, have amassed significant holdings of residential properties in Madrid and across Spain. Blackstone alone owns 13,000 rental units in Madrid and 19,600 nationwide, making it the largest private owner of residential real estate in Madrid and the second largest in Spain.
This influx of corporate ownership has coincided with a sharp increase in rental and home prices. Rental prices have climbed 57 percent since 2015, and home prices have risen by 47 percent. This surge, coupled with a lack of new housing construction and high unemployment following the pandemic, has fueled a significant rise in evictions, with tenant groups estimating that 20,000 Madrid renters face eviction.
The article highlights the case of Elsa Riquelme, who lost her home to foreclosure and its subsequent sale to a Blackstone subsidiary. Her struggle exemplifies the challenges faced by many Madrid residents grappling with rising housing costs and corporate landlords. The situation underscores the broader concerns about the increasing role of large corporations in Spain's housing market and its effect on tenants.
Approximately 185,000 rental properties in Spain are owned by large corporations, with half belonging to US-based firms. This concentration of ownership, coupled with insufficient housing development, has created a housing crisis impacting numerous tenants. The article uses the situation in Madrid to illuminate this larger Spanish housing issue.
On a chilly winter night, a few dozen people gathered inside a graffiti-clad building in the Carabanchel district of Madrid. Nearly everyone was in the midst of a dispute with their landlord, but these weren’t typical gripes about leaky pipes. They had come to commiserate about the American investment banks and private equity funds that controlled their homes.
Some at this meeting of the Sindicato de Vivienda de Carabanchel (the Carabanchel Housing Union) were fighting eviction orders or skyrocketing rents. Others had lost their homes through mortgage foreclosures. One attendee, Elsa Riquelme, described her yearslong battle to stay in the 600-square-foot apartment where she raised her three sons, which is now owned by Blackstone, the world’s largest private equity firm.
She was far from alone: Over the past decade, Blackstone has become Madrid’s largest private owner of residential real estate, and the second largest in all of Spain. Ms. Riquelme’s apartment is one of 13,000 that Blackstone currently owns in Madrid, and among 19,600 it owns nationwide.
Across Spain, around 185,000 rental properties are now owned by large corporations, half of those by firms based in the United States, according to a review of property registries by the nonprofit Civio. Rental prices have increased 57 percent since 2015 and home prices 47 percent, according to PwC, in large part because the country has failed to build enough homes for its growing population, even as more than 4 million homes sit empty. After the pandemic pushed Spain’s unemployment rate up to 15 percent, evictions nationwide spiked. In Madrid, tenant groups estimate that 20,000 renters in the city currently face the threat of eviction.
Ms. Riquelme, a bookkeeper by trade, emigrated from Chile in 2000 and bought her apartment for 56,000 euros during the housing bubble, making mortgage payments to CaixaCatalunya, a now defunct bank. After she and her husband split, she could no longer keep up, and the bank eventually foreclosed. CaixaCatalunya sought €150,000 ($170,000) in fees and mortgage arrears, then sold her apartment at auction for just €40,000 ($45,000) to a subsidiary of Blackstone.
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