The Record Price of Subsidized Housing: A Critical Mirror of Political Inaction and Ineptitude

The news has made headlines: the price of Publicly Subsidized Housing (VPO, or Vivienda de Protección Oficial) has reached a new historical maximum, hitting 1,195.7 euros per square meter nationally, according to the latest data from the Ministry of Housing and Urban Agenda (MIVAU) for the third quarter of 2025.

While any increase in value might, in another context, be interpreted as a sign of strength, in the field of subsidized housing, this record is, in fact, an alarm signal. It is not a market victory, but the clearest evidence that the official protection system is failing miserably in its primary mission: guaranteeing access to housing at affordable prices for low-income families.

Behind this historical maximum lies a structural problem, systematically ignored by public administrations, demanding a critical confrontation.

1. The Public Land Bottleneck: Where to Build?

The first and main bottleneck is the chronic lack of finished public land available for VPO projects.

It is a paradox: while citizens clamor for housing solutions, local councils and Autonomous Communities maintain vast areas of qualified or reclassified land, but it languishes in bureaucratic inactivity or is not made available to developers in an effective and agile manner.

The problem is not a lack of space in the country, but a lack of political will and urban management.

• Management Inefficiency: The processes for transferring, tendering, and developing public land are slow, complex, and often unattractive for public-private collaboration.

• Pressure from Free-Market Land: Land, even that designated for VPO, remains a cost variable that is inflating. If a massive amount of public land is not injected at very low (or zero, in cases of surface rights) transfer prices, the final cost of subsidized housing will follow the upward inertia of the free market, distorting its social character.

Without an ambitious and urgent policy to mobilize public land, this “historical maximum” in the VPO price will only be the beginning of an escalation.

2. The Absence of Real Incentives for the Private Sector

The second pillar of the crisis lies in the lack of tangible measures and incentives that make the construction of subsidized housing attractive to developers and construction companies.

VPO development is, by definition, an activity with limited profit margins, as the sale or rental price is capped. If the risk (derived from bureaucracy, licensing delays, and regulatory uncertainty) is high and the potential benefit is low, business logic simply opts for free-market housing, where margins are higher and administrative control is lower.

To reverse this trend, housing policies need to move from promises to action, offering:

• Aggressive Tax Incentives: Significant bonuses on construction VAT, on the Property Tax (IBI) for subsidized rental developments, and deductions on Corporate Tax for companies committed to VPO.

• Bureaucratic Streamlining (The Most Powerful Incentive): Halving the time required for license granting, with “express license” schemes for projects of social interest. Waiting months or years for a permit is a financial cost that nullifies any small profit margin.

• Security and Public Financing: Establishment of agreements or guaranteed purchase (or rental) agreements by administrations, which mitigate investment risk and facilitate access to bank credit for these developments.

The current situation in regions like Madrid (€1,472.2/m²) and Catalonia (€1,252.1/m²), which lead the price ranking, shows that where demand pressure is highest, the lack of an efficient and incentivized public supply is a breeding ground for speculation, even within the “subsidized” segment.

In short, the VPO price record is not data to celebrate, but the chronicle of a foretold political failure. If we want truly affordable subsidized housing, we need to unlock the land immediately and transform VPO into a profitable and quick option for those who build it, thereby ensuring sufficient supply for those who need it.