Rents for homes on municipal land in Palma will reach 1,600 euros.

PalmThe PSOE (Spanish Socialist Workers' Party) in Palma has warned that the theoretical limited-price housing to be built on municipal land will have "a premium rent of between €1,000 and €1,600, a far cry from the €600 to €1,000 announced by Mayor Jaime Martínez." The Socialists are making this complaint after the company awarded the only two lots calculated the final rents, including tenants' payment of property tax (IBI), garbage collection fees, and community fees, which can reach up to €233 per month, in addition to parking and storage.

For the Socialist spokesperson in Cort, Xisco Ducrós, "the mayor has once again lied and deceived the public, promising theoretically affordable housing that has proven to be unlimited in price." The company's estimate for one-bedroom apartments is almost €1,000 per month, and for two-bedroom apartments, which are the vast majority, around €1,200. For three-bedroom apartments, the figure rises to €1,400 and €1,600.

All start at lower prices, but the addition of extra payments causes them to rise considerably. For example, for two-bedroom apartments, community fees between €167 and €169 per month are included, depending on the lot, while for three-bedroom apartments, they rise to between €198 and €233.

Unspecified generic fees

As the PSOE (Spanish Socialist Workers' Party) in Palma criticizes, these are community fees that include generic management costs that are not specified and do not correspond to electricity, insurance, bank charges, water, or maintenance: they account for 77 euros of the total. In addition, parking and storage costs, property tax, and garbage collection fees, which are paid monthly, must be added.

Ducrós also questioned the revenue figures, "which are absolutely exorbitant." The company estimates a revenue of between 198 and 186 million euros, depending on the lot, and a net profit, after deducting expenses, of between 89 and 83 million euros. As the successful bidder for both lots, this represents a revenue of 384 million euros and a profit of 172 million euros over the 75-year lease.

According to Ducrós, this represents an annual profit of 2.29 million euros, or 1,150 euros per month in profit. This is almost the same as renting a two-bedroom apartment. "The company's profits, which wouldn't exist if it were a publicly managed apartment, represent an increase in the rent of 1,150 euros/month. The cost of rent is to guarantee not only the investment, but the profit. Out of necessity, the PP encourages business," according to Ducrós.

"Jaime Martínez sees Palma as a business plan for some to profit at the very expense of citizens' rights and the territory; they have given away public land to private developers so they can build apartments at unlimited prices," says the Socialist spokesperson.

"Unaffordable Rents"

"We are facing unaffordable rents for the vast majority of citizens," Ducrós explained. In the Rental Management Plan, the company states: "In this way, tenants who access the homes (...) do not exceed a payment effort rate of around 30% of household income." The Socialists point out that according to this rule, to access the apartments, and based on the average salary in the Balearic Islands, which is 23,134 euros, for a two-bedroom apartment the family unit should earn between 4,116 euros/month and 4,000 euros/month, and for a three-bedroom apartment, between 4.

For all these reasons, the Socialists are calling for the tender to be reversed and "for the Government to directly build public housing to guarantee that prices are truly affordable," in the words of Ducrós.