Women, Immigrants & Children Affected by Economic Crisis, Homelessness in Spain
With over 5 million people unemployed in Spain (nearly 26 percent of the economically active population), the economic crisis has hit homeowners particularly hard — which is nearly everyone.
Spain has the highest rate of home ownership in the European Union, as high as 85 percent, and that's largely due to decades-long aggressive governmental promotion of home ownership and borrowing. The Spanish government ensured its people of an "appropriate and affordable stock of rental housing and sufficient investment in rental public housing," and then did little to help them when facing foreclosure amid economic collapse.
Eviction and foreclosure now threatens anyone who was duped by the government's irresponsible lending, unfair mortgage contracts, dodgy behavior, and lack of oversight during the booming economic years.
According to the Human Rights Watch's report "Shattered Dreams: Impact of Spain's Housing Crisis on Vulnerable Groups," the recession (or housing bubble burst) in Spain followed a construction boom from 1997 to 2007, where Spain built more houses than France, Germany, and the United Kingdom combined; real estate and construction constituted as much as 43 percent of the country's GDP. Immigrants, female victims of economic abuse, and children are the most affected by the crumbling economy, and most likely to default on mortgage payments and be ejected from their homes.
WOMEN, IMMIGRANTS & CHILDREN
One-third of individuals affected by the mortgage crisis are immigrants, at a significantly higher rate than the rest of the population. The Ecuadoran community, in particular, has been snared by "crossed mortgages," in which two buyers guarantee one another's loans and chain mortgages. The banks then link together a string of people, often strangers, and they guarantee one another's mortgages. And, when one person defaults on their mortgages, it creates a chain reaction of defaulted mortgages, due to their liability as guarantors.
Single-parent homes headed by women face clear challenges because of income instability, earning lower wages on average, and child care responsibilities. Also, women head of households often remain tethered to their mortgage, due to a hostile former partner. They face economic abuse, a form of domestic violence not recognized by Spanish law, where men refuse to collaborate in negotiations with the bank — creating powerlessness and dependency.
The lateral effect on the nation's children is evident, as they suffer homelessness due to their parent's over-indebtedness. The social and economic ramifications of the debt affects education, healthcare and food. It makes it impossible to sign a lease, buy anything on credit, or acquire a phone contract, so women and immigrants often work on the black market or pursue entrepreneurial ideas.
Spanish authorities must abide by international law, which proclaims the right to adequate housing and an adequate standard of living, but does not include a right to own property, or retention of ownership under any circumstances. However, it does require that governments ensure that housing is affordable. In November 2012, the Spanish government adopted a two-year moratorium on evictions on certain families. But, despite later expansions, the arbitrary eligibility criteria remained far too narrow, and in some cases conflicted with international law. For instance, only families with three or more children, single-parent families with two or more children, and two-parent families with a child age 3 or younger could benefit from the moratorium.
"A 3-year-old's family can stay in their home, but a 4-year-old's can't," said said Judith Sunderland, senior Western Europe researcher and author of the report. "The distinction is purely arbitrary and the government needs to have better and more rational and fairer rules."
DISCHARGING DEBT & RESOLUTIONS
Seizure by the bank only eliminates part of the debt; and the lack of an accessible bankruptcy procedure in Spain guarantees that borrowers must shoulder a burdening debt that's so massive that there's no reasonable way to cancel or repay the debt, particularly with inadequate pay.
Human Rights Watch insists that Spanish authorities need to adopt measures to help more individuals and families avoid evictions. These include quickly reforming their non-intuitive bankruptcy law in order to provide an accessible pathway to discharging debt, helping families and individuals to secure affordable housing, and ensuring access to reasonable debt restructuring, relief, and cancellation.
Banks have responded to the mortgage crisis in numerous ways. Many signed on to a voluntary code of good practices promoted by the government. The banks turned over just under 6,000 properties to the Social Housing Fund, set up to give evicted families an affordable place to dwell, but again, restrictive criteria undermines the initiative.
The government has failed to reform Spain's insolvency laws to help individuals discharge their debt in an accessible, fair and efficient way — which needs to be tackled first.
"It's almost impossible for ordinary people to declare bankruptcy in Spain, meaning overwhelming debt will hound them to the grave," Sunderland said. "People living with extreme levels of debt should have a fair chance at a fresh start."