The Preliminary Draft Bill on Urban Development Measures to Promote Social Housing in the Community of Madrid is submitted for public information
1. Background
After the recent news published regarding the intention of the Government of the Community of Madrid to approve new regulations to solve the shortage of land for residential purposes, last Friday, a Preliminary Draft Bill on Urban Development Measures to Promote Social Housing was submitted for public information. The Preliminary Draft can be consulted in Spanish at the following link.
The Preliminary Draft incorporates amendments to the Madrid Regional Land's Act (Law 9/2001), whose main aim is to make the procedures for the construction of social housing more flexible, and also proposes an interesting transitional regime that would allow the change of use from offices to social housing under certain conditions.
2. Temporary regime for the change of use of land and built office plots for the implementation of social housing units for rent
The most interesting measure included in this Preliminary Draft is a temporary regime of change of use of land and even in already built plots with tertiary office use, for the implementation of social housing units for rent.
The change of use over existing buildings will only be possible for the whole construction and not for parts of it. Likewise, undeveloped land must be urbanised or the construction works should have been authorised under a simultaneous urbanisation regime.
Therefore, this regulation allows the application for a direct licence, without the need to modify the urban planning. This regimen will be applicable for a period of two years from its entry into force, with a maximum period of three years for the execution of the works.
However, the implementation of residential use on these plots will oblige the developer to transfer in favour of the relevant City Council plot of land intended to local public networks or, alternatively, substitute this obligation through a monetary payment. Likewise, if this implementation entails the need to extend the infrastructures and public networks outside the plot, the responsibility and cost of carrying out these works will be borne by the licence applicant.
The licences allowing the implementation of the residential use must describe the new alternative use and the social lease scheme to be applied, and must be registered with the Land Registry.
Once the maximum period of the applicable public housing protection scheme has expired, the owner who wishes to maintain the residential use must apply to the relevant City Council, in accordance with the regulations in force at that time, for:
(a) the incorporation on the plot of the alternative residential use to tertiary use; or
(b) the change of the classification of the plot to a residential use.
Notwithstanding the above, City Councils may decide not to apply the temporary regime provided for in the Preliminary Draft in their territory, in whole or in part, or to apply it with additional conditions.
3. Next steps
This Preliminary Draft will be open for public comments until Tuesday 21 May. It will then return to the Governing Council of the Regional Government to study the allegations filed and, subsequently, the text will be sent to the Madrid Assembly for urgent processing.
4. Our services
This note is based on a preliminary legal draft (still pending approval) and cannot be considered as legal advice.
However, Ashurst Madrid is an expert in the legal regulation of the housing sector. We will be happy to review any particular situation or portfolio of assets and the implications that the new Preliminary Draft may have for it, and to recommend the most appropriate course of action in each case.
The intellectual property rights of this note belong to Ashurst Madrid and its reproduction, distribution, transfer or any other type of use without prior consent is prohibited.
