We can't go back to the public housing of the 1970s. Cottarelli speaks out.

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In the 1970s, the Fanfani Plan took on the burden of implementing a massive public housing project in Italy, but let's remember that plan was a loss-making one. Today, the state no longer has sufficient resources and must involve private capital with the expectation of profit. It happens in all the major cities of the world, and that's what happened in Milan. Skyrocketing prices are the result of a market mechanism compounded by the sharp loss of purchasing power of wages, which fell by 13 percent in 2021-2022, only to recover some ground more recently . Economist Carlo Cottarelli seeks to bring the debate on the Milan model back to a realistic level, having come under fire for promoting real estate development for the wealthy.

"This debate," says the economist, "is based on an ideological foundation that ignores the economic sustainability of the projects." In short, no one is looking at the numbers. "Do we need more homes to meet the housing needs of a growing city? Fine," says the economist, "let's do it, but we can't pretend to impose 50 percent public housing because that would mean asking developers to forgo profits." Cottarelli enters the story of Milan's real estate crisis, which, amid investigations and construction site freezes, has been ongoing for at least a couple of years, because he produced a study arguing that a "social" housing plan, like the one launched by Beppe Sala's own administration after it was criticized for expelling the working class from the city center, is essentially utopian. All hell breaks loose! The economist is being attacked from several quarters, as if he were opposed to the need to build more affordable housing for Milanese residents, not for highlighting the poor economic sustainability of a social vision without money . "I say we need to build more houses, not fewer, but we need to do so while respecting the profit expectations of those who invest. Otherwise, we'll be back to the 1970s when the state provided the money. But it seems to me we can no longer afford that."

The ACLI and white cooperatives retorted to the economist that they would be able to build more affordable housing because they have lower profit expectations than large foreign funds. The historic conflict between market-based businesses and the cooperative world has entered a new chapter in Milan. "The facts, however, show that recently the City of Milan's tenders have been deserted precisely because of the high ERP ceilings. It's clear that with these numbers, the numbers don't add up even for cooperatives." What would be the right ceiling for public housing? "With 30%, I believe there would be businesses willing to sit down and discuss it." Some have pointed out that his study was commissioned by business associations like Ance and Assoimmobiliare, and that they paid for it. "Of course, I'm working for free! That doesn't make my assessments any less scientific or rigorous. Let's not joke: these are the facts. The rest is ideology."

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