The year 2022 will be remembered as the year in which the workers arrived in Spain to promote the rehabilitation of buildings. The European Union recently disbursed to Spain the first tranche of the recovery fund, which amounts to 10,000 million euros.
Spain was the first country in the EU to present a formal request to receive the first disbursement and was able to do so after having signed the technical document with the Community Executive that stipulates how compliance with each commitment must be verified. This tranche of 10,000 million thus joins the advance of 9,000 million that the Community Executive advanced in mid-August and that was not subject to conditions.
The Next Generation Funds are a great opportunity to modernize and transform the rehabilitation sector. The time has come to define ways of working. The Council of Ministers approved the Royal Decree regulating the aid programs for residential rehabilitation and social housing of the Recovery, Transformation and Resilience Plan (PRTR), whose investment is endowed with 6,820 million euros.
Of the total 6,820 million euros, slightly more than half (3,420 million euros) is allocated to “rehabilitation for economic recovery”, distributed in 1,994 million for the comprehensive rehabilitation of buildings, another 976 million for the rehabilitation of neighborhoods and another 450 million euros to cover the planned tax deductions. The is one of the most outstanding items of the Recovery Plan, with tax deductions and subsidies.
With this plan, the Government expects to achieve several objectives, including carrying out half a million home renovations, building 20,000 new flats and creating more than 180,000 jobs. Also that the actions that are carried out revert close to 13,500 million euros to the domestic GDP.
The aid will be channeled through the autonomous communities, so each of them will be in charge of launching the calls, as well as the bases. María José Piccio-Marchetti, General Director of Housing and Rehabilitation of the Community of Madrid affirms that 161 million euros have already arrived in the Community of Madrid.
“Clearly, the Next Generation Funds are an opportunity, a lever to boost the country’s economy and the transformation of the real estate sector. The sector was very focused on new construction and now a door is open to the rehabilitation sector. To the Community 161 million have just arrived from Madrid and it is estimated that in the second quarter of 2022 aid can be applied for,” says María José Piccio-Marchetti, general director of Housing and Rehabilitation of the Community of Madrid.
Fund Objectives
One of the objectives of the Next Generation Funds is to improve the energy efficiency of homes and one of the requirements established by the Royal Decree as a technical energy criterion is to achieve a reduction of at least 30% in the consumption of non-renewable primary energy.
If we analyze the current situation of our housing stock in Spain, according to data from Tinsa, we see that close to 45% of the buildings are from before 1980, a percentage that rises to 50% in the case of buildings of residential use and a figure of almost 10 million . In turn, it is estimated that around one million homes are in poor condition. The buildings that achieve the best rating, the letter A, do not reach 0.3% of the total in the case of emissions and stand at 0.2% in the case of energy consumption and 75% of the buildings do not they are accessible.
With these data we see that in many cases achieving the reduction required by the Royal Decree will be difficult, and even impossible in certain buildings, so it is essential to study the entire residential stock.
“It is a very important challenge because we are going to implement the public-private collaboration plans with the European Funds. What must be done is to start the execution of these funds and that companies and public administrations collaborate so that these funds arrive to its final destination, which is to improve the housing stock in Spain”, points out Juan Antonio Gómez-Pintado, president of Asprima and APCE Spain and president of the developer Vía Agora.
The subsidies are framed within the ‘Aid program for rehabilitation actions at building level’ and aims to help carry out rehabilitation works in which an accredited improvement in energy efficiency is obtained, with special attention to the building envelope, in buildings of collective residential typology and in single-family homes, and in any case must be actions in which a reduction in the consumption of non-renewable primary energy of the building equal to or greater than 30% is obtained.
In this regard, José Luis Miró, CEO of Almar Consulting, assures that Almar Consulting as a rehabilitation agent is finding that its clients question whether the investment required is profitable. “I think that a significant investment is required to increase energy certification above 30%. Clients see that they have to make a very large investment because they need to change the building envelope or change the facilities and that is expensive and not available. profitability is clear.
Alberto Valls, partner in charge of Real Estate in EMEA at Deloitte, assures that “what the funds are doing is generating the need for rehabilitation that we already had in Spain and what is going to happen is an improvement and a commitment to the value of urban regeneration which probably will not have a direct return on the electricity consumption bill, but we will achieve an impact on regeneration value.Of the 3,420 million for subsidies, almost 1,000 million go to rehabilitation actions at the neighborhood level, another 2,000 million to rehabilitation at the building level for improvements in energy efficiency and 600 million to improve energy efficiency in homes.
90% of the rehabilitation that is carried out in Spain focuses on conservation and accessibility and one of the requirements established by the Royal Decree is linked to energy efficiency and what it establishes is to achieve a reduction of at least 30% of the non-renewable primary energy consumption. For this, it is essential to study the residential stock in its entirety to identify those properties with the potential to achieve the required level of improvement.
According to data from Tinsa, if we analyze the housing stock in Madrid since 1980, because previously there was no construction standard that took energy efficiency into account, there are 3,500 buildings in the Community of Madrid that do not have any type of energy insulation.
It is clear that the Spanish housing stock needs improvement in energy efficiency and the figure included in the Royal Decree of the rehabilitation agent is important. “He is going to be an important figure in carrying out comprehensive 360º management and being the sole interlocutor from the beginning of the first conversations with the communities of property owners until the end of the work. The agent will energize and solve financing problems” , declares José Luis Miró.
Industry experts recommend taking advantage of European funds to improve the efficiency of homes and increase their level of comfort. In addition, they remember that they increase the value of homes by up to 25%, and it is a way of caring for the environment.
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