Solventis is a Barcelona-based investment firm. One of its funds is Fondviso. The firm's website explains that this is a "social infrastructure fund that invests in developing the public supply of affordable rental housing with environmentally, socially, and economically sustainable assets through a new public-private partnership model".
Through Fondviso, Solventis is planning to invest 100 million euros in building 600 affordable homes to rent in the Balearics.
This initiative could contribute to the scheme proposed by the Balearic housing ministry for municipalities to cede land for building public housing for affordable rental. As with other schemes that the ministry has for addressing the lack of affordable homes, this would entail the use of private investment; the government wouldn't pay for any of it.
Under the Solventis model, this would be the case, except for a fixed annual fee to be paid to the fund for having put up the investment. The government would manage the rentals and assume costs of maintenance and any risks, e.g. possible non-payment of rents by tenants. After thirty years, the buildings would become public property.
Not all the rental income would go to the government. This is where the fund would make its main return - a percentage of this income. For tenants, so it is said, the benefit would be rents that are some 30% lower than on average.
Toni Bosch, director of alternative real estate investments at Solventis, says: "Access to rental housing in the Balearics requires a financial effort 30% higher than the Spanish average, taking into account that the average income per household is similar." He believes that the Balearic government could be in a position to "quintuple the development capacity of the affordable housing stock" through this type of investment arrangement.
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