ICO, ICF and the Barcelona City Council sign an innovative 140 million euro agreement to expand the city's social housing stock

28 July 2022

  • ICO and ICF will open a facility of 140 million euros, with each entity contributing 70 million euros, to finance the rehabilitation and construction of rental and co-housing social housing promoted by foundations and cooperatives in assignment of use
  • The agreement will facilitate the construction and renovation of 1,000 homes over a maximum period of 10 years, of which 60% will be for affordable rentals and 40% for co-housing
  • The Barcelona City Council will provide a guarantee for the operations and, consequently, will make it easier for cooperatives and foundations to access financing

Today, Instituto de Crédito Oficial (ICO), Instituto Catalán de Finanzas (ICF) and the Barcelona City Council have signed an agreement, pioneering in its support for housing policies and collaboration with non-profit organisations, which will help to increase the stock of social housing for affordable rental or co-housing in Barcelona by 1,000 housing units. 

The agreement presented today by Rosario Casero, ICO's Chief Investment Officer, Jordi Òliva, CEO of ICF, and the Mayor of Barcelona, Ada Colau, aims to provide the cooperatives and foundations selected by the City Council with access to financing so that they can develop renovation and construction projects, thus strengthening public-private collaboration.

The financing operations will cover up to 100% of the cost of the project with the maximum limit of the appraised value excluding land and in accordance with the modules in force. As a guideline, the limit for 2022 is set at 120,000 euros per dwelling. 

To this end, ICO and ICF will set up a facility of 140 million euros—of which each institution will contribute 50%—aimed at financing both renovation and new construction projects promoted by cooperatives in assignment of use and foundations selected by the City Council in the ESAL agreement. The institutions will be able to repay the loan over a period of up to 30 years. 

Innovative Agreement for Social Economy

This is a pioneering agreement between the three parties, which have come together for the first time to promote housing construction and rehabilitation projects developed by the social economy. The agreement is also a commitment to a public-private partnership model that guarantees public ownership of land, with alternative formulas to full ownership (renting and co-housing) and which aim to create a more collaborative, long-term housing policy that facilitates access to affordable housing.  

Within the framework of the agreement signed today with ICO and ICF, the Barcelona City Council will provide a guarantee for the operations and, consequently, will make it easier for cooperatives in assignment of use and foundations to access financing in a commitment towards innovative social housing policies. With this guarantee, the City Council facilitates access to financing for these entities, improving their credit quality. 

This is an innovative agreement because it provides for municipal support to non-profit social operators in order to guarantee funding under the best conditions. It is also a very important agreement due to the magnitude of the economic amount agreed.

This agreement contributes to resolving one of the main difficulties of these projects, which is access to financing, as well as reducing costs for citizens, and is part of various actions by the Barcelona City Council to facilitate this financing.

The actions financed within the framework of this agreement respond to criteria of social sustainability, as the project seeks to respond, by involving non-profit organisations, to the need to promote affordable subsidised housing in Barcelona. Furthermore, from an environmental point of view, it should be noted that the architectural projects to which funding is granted must incorporate energy improvements and other measures that reduce the ecological footprint and limit polluting elements, in accordance with the provisions of the State Housing Plan 2022-2025.

ESAL Agreement 

The ESAL agreement, promoted by the Barcelona City Council, aims to promote a housing model that facilitates the creation of community and collaborative ties, as well as more sustainable forms of consumption and construction. 

Within the framework of this measure—with the participation of Asociación de Gestores de Vivienda Social, Federación de Cooperativas de Vivienda HABICOOP, Red de Economía Social y Solidaria, and Coordinadora de Fundaciones de Vivienda Social COHABITAC—the City Council assigns for free land and municipal buildings to be renovated under a 99-year surface right and grants municipal subsidies (between 7% and 15% of the cost of construction or renovation) to social developers, cooperatives in assignment of use and foundations, for the construction or renovation of rental and co-housing dwellings. This measure also ensures the permanent public ownership of the transferred land.