Housing executed only 32% of its budget last year, the lowest among all ministries

The government's commitment to housing as the central axis of its social policy is failing to translate, at least for now, into the actual execution of the State Budget. Although the government has announced ambitious plans —such as the construction of 40,000 public housing units through a new state-owned company or the mobilization of public land to increase the supply of affordable rentals—the Ministry of Housing and Urban Agenda is the department with the lowest level of budget execution of the 22 departments that make up the government. According to data from the General Intervention of the State Administration (IGAE), by the end of 2024, only 32.7% of obligations on available credit had been recognized. This gap between political announcements and accounting reality adds pressure on a key portfolio for addressing one of the country's most urgent challenges: access to decent housing .

The Housing and Urban Agenda department highlights the figure resulting from comparing committed expenditures with the budget, which in 2024 amounts to 95.4%. They assert that, as "payers of subsidies and aid to other administrations"—mainly autonomous communities, local governments , and other entities—their execution depends on the justification and presentation of documents that allow for payment of the amounts. This is what differentiates this percentage of completion from the one that takes into account recognized obligations, which is more common for comparing execution. The ministry argues that its calculation shows a higher execution because although the resources have been allocated, the disbursement remains pending. "That amount is already in the coffers waiting for them; it doesn't matter whether they pay it this year or the next, but they can't be given money if they don't prove they've built; it's counterjustification," they state. Other accounting sources explain that without justification, the project cannot be considered executed.

Diego Martínez López, Professor of Applied Economics at the Pablo Olavide University of Seville and researcher at Fedea, prefers the "orthodox view" of the budget and acknowledges that while "the committed spending has to go somewhere," execution is limited to payments made.

Economist and real estate consultant Alejandro Inurrieta describes Housing and Urban Agenda as a body "empty from a budgetary perspective," given that it "is more of a financing agency and has almost no executive capacity." He explains that Housing "does not build housing as such, but rather grants loans to other administrations or financial institutions; they don't have a program like Transport does with its public works program." He adds that budget execution capacity would be limited in the case of some rehabilitation programs or public land "which are very slow because in many cases they depend on the processing of permits." He suggests the lack of agreements between agencies as another possible cause of the limited execution.

The ministry's slow spending comes amid a context where the General State Budget has been extended for the second consecutive year. The government has not approved new public accounts since 2023, just before the election, and this term has yet to see the creation of a new guide to public expenditure and revenue. This circumstance complicates budgetary practice because the items have not been updated.

One of the most paradigmatic examples of this ministry's poor budget execution is the loan facility from the Official Credit Institute (ICO) for the promotion of social housing, the largest item in the Ministry of Housing's 2024 budget, endowed with 2.2 billion euros. Despite the fact that the facility was activated through an agreement with the public financial institution in July 2024, budget execution data reflects that, as of December, not a single euro of this item had been used: no obligations have been recognized, nor have any payments been made, according to the IGAE report.

According to several auditors, this is because, although the ICO can now sign transactions with developers, the funds are not recorded as budgetary expenditures until the loans are formalized and the resources are actually released. Therefore, even though some payments have already been made, they are not reflected in official records.

ICO sources indicate that 59 operations have been approved so far, mobilizing €726 million to finance more than 6,000 homes. These amounts have already been paid and are in the hands of construction companies and developers, the ICO states, so they could be added to last year's execution estimate to provide a more accurate picture. This would bring budget execution to 50%, although the ministry would still have the lowest level of implementation.

The ICO also explains that the funds planned for promoting social housing have increased by an additional 1.1 billion euros until the first quarter of 2025, reaching a total of 3.3 billion euros, as reflected in this year's accounts. Sources from the public agency explain that, in addition to the 726 million euros already approved, another 1.6 billion euros are currently under review and analysis, earmarked for the construction of more than 50 housing developments. However, these funds have not yet been allocated and cannot be included in the budget execution.

The Ministry of Housing explains that regarding these ICO loans, "the start was very slow because agreements had to be reached with banks, but now the pace is increasing," and clarifies that this allocation is not executed annually, so the funds, which already amount to 3.3 billion euros, will be released until 2026. "It is a very complex product; they are not grants but loans, and therefore, it has required numerous interactions with the European Commission to ensure that we met all the requirements," they explain. The ICO is working with financial institutions to channel the line, which draws on funds from the Recovery, Transformation and Resilience Plan (PRTR). Currently, seven institutions have joined this program, and financing has already been formalized to build 120 homes, according to ministry sources. Meanwhile, the credit institution explains that despite the complexity of the requirements—which include, among others, the sustainability and energy efficiency of the properties, and the protection of homes from affordable rent for a minimum period of 50 years—funds for developers are guaranteed, whether they come from European funds or the ICO itself.

In addition to this ICO credit line item, the State Intervention Department's December 2024 report notes that the ministry's other items also do not stand out for their high level of execution. This is the case with resources for the planning and promotion of building (45.7%), the rehabilitation and economic and social recovery of residential areas (46.3%), and the construction of social rental housing and energy-efficient buildings (51.7%). The promotion, administration, and aid for rehabilitation and access to housing (92.8%) item is the only one that stands out in this regard.

The Ministry of Housing's budget execution rate, the recognized obligations on final loans, is the lowest of any other department in the government's cabinet at the end of 2024, according to the IGAE (Spanish Institute of Statistics and Census). The Ministry of Labor and Social Economy's budget execution rate was 60.4%, Territorial Policy and Democratic Memory, 67.2%, and Industry and Tourism, 68.6%.

The housing crisis has become a growing priority for citizens, marked by rising rents, the rising cost of home ownership, and a shortage of affordable housing, especially for young people. In this regard, the Ministry highlights the rollout of the ICO guarantee program to facilitate the purchase of their first home for this group and families with children—with a reach, to date, of 5,553 beneficiaries. Despite the progress, the slowness of budget execution raises doubts about the agility of the processes to translate the Government's promises into tangible results.