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Financialization of Housing

Residents vs investments funds: the fight against speculation in the housing market

In Barcelona, Spain many families cannot pay the rent or afford to buy a house. When the 2008 economic crisis happened in Spain, the real estate bubble burst and the banking system was restructured. With help from the government, investment funds took advantage of this crisis to enter the Spanish housing market and hoard properties. The result has been a 55% increase in rental prices and 1.7 million people evicted from their homes. Although the people have fought back, social organizations fear that laws to regulate the market will ultimately be watered down. The Tenure Guidelines provide a framework to prevent land speculation and concentration and regulate markets to protect vulnerable groups.

Anna hugs with her friend before eviction.

Anna and her friend hug for moral support during Anna’s eviction / Bruna Casas – RUIDO Photo

150 families win the fight against Goldman Sachs and retain their right to stay in their homes

In April 2018, 450 residents of Sant Joan Despí, a town in the province of Barcelona, Spain, won their fight against Goldman Sachs, one of the largest investment banks in the world, and thus were able to stay in their homes. In January of that same year, residents of an apartment building located at nº113 Avenida Barcelona, received certified faxes stating that they needed to accept a raise in their rent ranging from 40% to 100%, or leave their homes immediately. The 150 affected families, rather than leave quietly, opted to raise their voices in unison. They protested for weeks until the real estate management company, Medasil Desarrollos SL, agreed to collective negotiation. This process resulted in a gradual and fairer rent increase plan.

The relationship between Goldman Sachs and the owner of this building is opaque and complex, as is often the case in such financialization processes. According to an investigation by the local newspaper, the owner of the mortgage of the entire building is a UK-based company, Pyrenees Acquisitions LTD, whose ultimate parent entity is The Goldman Sachs Group, Inc. Moreover, Medasil Desarrollos SL, the real estate agency, has as legal representatives Picton Investments SL, Promociones Lladero SA and Avenida Barcelona 111 SL. These firms, along with Pyrenees Acquisitions LDT, have shared the same CEO throughout the years 2015-2019: Ana Estrada López.

Avenida Barcelona 111 SL — named after the apartment building located at nº 113 Avenida Barcelona before a change in street numbering — acquired the building in Sant Joan Despí in 2009. After four years of unsuccessfully trying to sell, they put the apartments up for rent at monthly prices ranging between 400€ to 1,000€. Initially, the mortgages were managed by Caixa d’Estalvis del Penedès — one of the small saving banks typical of the Spanish banking system before the 2008 economic crisis. In May 2013, Caixa Penedès was acquired by Banc Sabadell as part of a restructuring plan, which reduced the number of banks and promoted concentration.

At this time, according to an investigation by, the ownership of the mortgages of the apartment building was granted to Sareb, the asset management company that resulted from the restructuring of the  banking system. Sareb was created in 2012 by the Spanish government to deal with the real estate assets with a high risk of default. In 2016, Goldman Sachs acquired the mortgages of the apartments in Sant Joan Despí from Sareb. Two years later, when the rent contracts were about to expire, the investment fund raised the rent.

Goldman Sachs acquired the mortgages of the apartments in Sant Joan Despí after the 2008 crisis and when the rent contracts were about to expire, the investment fund raised the rent from 40% to 100%


Catalan police enters into a house to evict a family

The police enter into a house to evict the residents / Bruna Casas – RUIDO Photo

How investment funds used the 2008 financial crisis to take over the housing market

The fact that Goldman Sachs was able to acquire the apartment building in Sant Joan Despí is a consequence of how the 2008 global economic crisis was remedied. In short, governments ceded more power to the banking systems, thus promoting the financialization of common resources, including housing. In Spain, the 2008 financial crisis precipitated the bursting of the real estate bubble. For years prior to the crisis, banks had readily given loans at low interests for the housing sector: many families bought homes with a mortgage and many construction companies started to build houses. Approximately 60% of credit granted by Spanish banks went to the real estate sector.

When the crisis peaked many construction and real estate companies went bankrupt, comprising 40% of bankruptcies in 2008. Meanwhile, many families became unable to pay their mortgage, which led to a wave of evictions.  According to estimates by Observatori DESC, “between 2008 and 2019, 684,285 evictions were carried out in Spain, amounting to 156 evictions per day over the course of 12 years. 1,710,963 people, including children, were left without a home”. Evictions skyrocketed between 2008-2012, but since then the situation has stabilized (see graph below). Catalonia, the Autonomous Region wherein Barcelona is located, is where this problem was been most pronounced: it was home to 19% of all evictions.  

Graph: Evolution of evictions in Spain (blue), Catalonia (red) and Barcelona province (green) (2008-2019). Source: Observatori DESC

Observatori DESC relates the rise in evictions with a series of laws that the Spanish government, both the left (PSOE) and the right (PP), approved between 2009 and 2013. These laws helped accelerate the judicial processing of evictions (Law 19/2009; Law 37/2011), with some exceptions for vulnerable families. In 2013, the PP approved a law to make the housing market more flexible, decreased the minimum number of years for a rental contract from five to three and decoupled the Consumer Index Price (IPC) from rent prices so that rent could rise above consumer prices. These laws went into effect at the same time as a tax reform that allowed real estate companies to evade corporate income taxes. The aim of the reform was to encourage foreign capital to acquire real estate stock with a high risk of default, which at that time was in the hands of the ravaged Spanish banking system and of Sareb. 

Between 2012-2013, investment funds such as Cerberus, Blackstone, and Goldman Sachs acquired enough real estate assets to influence the housing market and create another bubble, this time, in the rental market. Traditionally, housing in Spain has been a source of savings and stability, with 75% of the population living in their own property. But the crisis increased the percentage of tenants from 10% to 15%. At the same time, landlords with three or more properties increased from 9% to 20%.  According to an investigation by the news organization La Directa, in 2022 Blackstone owned 5,550 properties in Catalonia through a network of eight partner companies.

In 2018, the Spanish banking system had 3.5 million empty houses in their stock, while at the same time 100 evictions were taking place every day because tenants were unable to pay the rent. The eviction trend had notably shifted: the majority of evictions are now due to unpaid rent instead of unpaid mortgages.  According to a study by the Bank of Spain, since 2015, rent prices have increased much more than housing prices. In big cities such as Barcelona and Madrid, as well as other tourist destinations, rent prices have increased up to 55% from 2013 to 2019.

Graph:  Residential Housing Prices
Idealista Index, 2014: M1 = 100 | Rent (blue) | Sales (red)

Source: Bank of Spain report

How can the Tenure Guidelines be used to regulate the housing market?

The financially focused solution to the 2008 economic crisis created a reality in which families cannot afford to buy a house, nor to pay the rent. In Barcelona, 42.7% of the population spends more than half of their salary on housing. While 20% of workers earned equal or less than the minimum wage in 2020 (935€/month), a 70 m2 flat in Barcelona costs on average 1050€/month.

In the meantime, empty houses remain in the hands of investment funds, the Spanish banking system and large-scale landlords, thus promoting the financialization of urban housing and the gentrification of entire neighborhoods. 73% of the properties owned by corporations are empty. The only option for some people is to occupy these empty houses, but these people are also being evicted. Housing has become an investment asset, instead of a right for all people. The market has not regulated itself, but rather it has spurred more speculation.

Irene waits in her house for the judicial committee to evict her with her things packed

Irene waits in her house for the eviction to happen with her things packed / Bruna Casas – RUIDO Photo


The Tenure Guidelines urge states to prevent uncompetitive practices that enable equal participation, regulate markets, protect the right to tenure of vulnerable groups, prevent land speculation and concentration, and ensure market transparency (Articles 11.2 & 11.3). The TG are relevant in the urban context because they make clear that unregulated markets and uncompetitive practices seriously threaten the right to land, and therefore, housing, for vulnerable groups. These guidelines recognize cultural and social values which are “not always well served by unregulated markets” and provide a rights-based framework in which land and housing are understood as rights, and not as investment assets.

As we have seen, the Spanish government approved laws that exacerbated tenants’ vulnerability to abuse by powerful landlords and the financial system, rather than protecting them. However, since 2013, social mobilization led by newly formed groups advocating for the right to housing, such as Sindicat de Llogaters or PAH (Platform of People Affected by Mortgages), have started to make some progress. In 2013, a Popular Legislative Initiative (ILP) promoted by PAH urged the Spanish Congress to take urgent measures to protect debtors.

Although this law (1/2013) was approved and included debt restructuring and promotion of social housing, it did not provide for payment in lieu (which allows debtors to surrender their property to settle a mortgage debt) or mortgage cancellation in case of abusive clauses. This last right has been acknowledged by the European Court of Justice in 2022. And nevertheless, the availability of social housing continues to be extremely limited: at 2.7% of housing stock compared to the European average of 15%.

In July 2015, the Parliament of Catalonia approved the “Catalan law against evictions” (Law 24/2015) based on a Popular Legislative Initiative (ILP) that collected more than 150,000 signatures. Its main measure was the introduction of a mandatory offer of social rent before eviction that only affects those evictions promoted by large landlords. Although it has been challenged on different occasions, the law is currently still in force.

In September 2020, the Catalonian regional government passed a law promoted by Sindicat de Llogaters with the support of 4,000 other social organizations to limit rent prices in areas of market speculation. The objective of the law was to ensure that no one would have to spend more than 30% of their salary on housing. After a year and a half of successful implementation —which led to a 5.5% decrease in rent prices—, the Spanish Constitutional Court declared the law unconstitutional stating that the Catalan government had no competence in market regulation. However, this contentious decision needs to be understood within the context of Catalonia’s on-going fight for independence. Although the Spanish government is drafting a new law to regulate the housing market, social organizations fear that, once again, the law will be watered down.

The Tenure Guidelines are relevant in the urban context because they make clear that unregulated markets and uncompetitive practices seriously threaten the rights of vulnerable groups


Block Ruth, an occupied house in Barcelona protesting against evictions

Block Ruth, an occupied house in Barcelona where people that has been evicted live / Bruna Casas – RUIDO Photo


This article has been possible thanks to the work and support of RUIDO Photo and Observatori DESC