In Spain, the formula of social socimis (listed real estate investment companies) is starting to take hold, combining shareholders, dividends, wealth, and companies with homelessness. Currently, there are two real estate companies focused on homelessness. tuTechô became the first social socimi to be listed on the BME Growth index in April, with a valuation of 28.6 million euros and an initial share price of one euro. Prior to this, Primero H, promoted by the Spanish association of socimis (Asocimi) and Hogar Sí, a non-profit organization working to end homelessness, began trading on the Portfolio Stock Exchange in September 2023 at a price of one euro per share, with a valuation of 1.4 million euros. These impact investments aim to combat homelessness by providing affordable housing for vulnerable individuals while ensuring returns for shareholders through dividends.
The housing-first approach, supported by the European Union, emphasizes the importance of stable housing for individuals experiencing homelessness as a key factor for long-term change, including access to employment. In Spain, with only 2.38% of people living in social rental housing, the urgent need to increase this number to address the homelessness issue is emphasized by the Alquiler Observatory. The homelessness population in Spain has increased by 25% over the past decade, reaching 28,552 in 2022 according to the National Statistics Institute (INE). This number is believed to be higher, considering individuals in irregular situations or those who have not received assistance, with an estimated 37,000 people experiencing homelessness in Spain, according to Hogar Sí.
Homelessness affects a variety of profiles beyond those living on the streets or in temporary accommodations. Individuals facing eviction, domestic violence, unsanitary conditions, overcrowding, or degraded environments also fall under the spectrum of homelessness. The rental market plays a significant role in these situations, with 18% of homeless individuals attributing their situation to rental issues such as inability to pay rent, eviction, or contract expiration, according to the Alquiler Observatory. Blanca Hernández, president of tuTechô, believes that impact investing can be a solution to homelessness, highlighting the positive impact of stable housing on individuals in vulnerable situations.
tuTechô, with investment from Azora, Renta 4 bank, Tressis private bank, and Magallanes, has purchased 250 properties at affordable prices, accommodating nearly a thousand people and empowering 160 individuals towards autonomy. The average rent is 600 euros per month, 30% below market prices, with 58 social entities renting from tuTechô. Primero H, the first social socimi established in Spain for homelessness, aims to invest five million euros over its first three years to provide sustainable returns for investors while addressing homelessness effectively. Both initiatives represent innovative approaches merging social impact and financial returns to tackle homelessness.
The collaboration between the private sector, represented by socimis, and third-sector organizations like Hogar Sí is essential in addressing the complex issue of homelessness in Spain. The urgency to increase affordable housing options and support vulnerable individuals is emphasized by the growing homeless population and the limitations of existing social programs. This innovative model of impact investing in real estate is gaining traction as a potential solution to combat homelessness effectively while ensuring financial sustainability for investors. Primero H and tuTechô are pioneering examples of how social investments can bring about lasting change in society.
