The Hotel Port Vell in Mallorca, which was knocked down to make way for residential accommodation

2013 - The Hotel Port Vell was a case of conversion, but demolition and rebuilding are not what is being envisaged, | Assumpta Bassa

Andrew EdePalma10/05/2022 19:49
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The Balearic government has reached agreement on an amendment to the tourism law put forward by an opposition party, El Pi. This will allow the conversion of obsolete hotel stock into residential accommodation, 50% of which will be VPO social housing.

Details as to how this might be managed are not yet available, but the agreement raises any number of questions. As an advocate of hotel conversion into accommodation over many years, it has my support. However, previous attempts leave little room for optimism. The 2012 tourism law made provision for conversion, and this was without any social housing strings attached. There were very few takers. More recently, the 2020 emergency measures for Covid offered the possibility of conversion. The hoteliers looked upon the idea with some favour; in May 2020 the situation was pretty dire. But there was not a single taker.

The hoteliers have been wary of a social housing arrangement, and they may have good reason to be. VPO implies government ownership of the properties. This is normally the case, anyway. Is there a mechanism for assessing property value, therefore?

What exactly does 50% entail? A report suggested that 50% of floors would be social housing. A mix of private ownership and social housing in the same building? Is this what's on offer? For the hoteliers to sell half the converted properties on the free market will no doubt be more to their liking, but then there would be their marketing, if there is this mix in the same building. This is absolutely not to denigrate people in need of social housing, but one could nevertheless envisage a reluctance on behalf of hoteliers to have this mix because of the marketing.

Then there is location. The 2020 emergency measures contemplated conversion in only a few places - the so-called mature resorts, which are Magalluf, Paguera, Palmanova, Playa de Palma and Santa Ponsa. Limiting the possibility in this way didn't make much sense, so will it now be available anywhere?

The circumstances are now very different to what they were two years ago when the Covid emergency measures were announced. With tourists flooding back, what will be the motivation for conversion? There wasn't any, as it turned out, even because of the pandemic, and one suspects that in part this was because it was 100% conversion for social housing.

And what about the jobs? The government says there will be mechanisms in the law to guarantee ones lost as a consequence of conversion. We wait with interest to hear what these might be.

It is a good idea and one that has been shown to operate successfully elsewhere exclusively for social housing. So it can be done. But will it be?