The conversion is good in principle, but …


The Balearic government has reached an agreement on an amendment to the tourism law proposed by an opposition party, El Pi. This will allow the reconversion of the obsolete hotel park in residential housing, 50% of which will be VPO social housing.

Details on how this might be handled are not yet available, but the deal raises a number of questions. As an advocate for hotel conversion into lodging for many years, he has my support. However, previous attempts leave little room for optimism. The 2012 law on tourism provided for conversion, without any condition of social housing. There were very few takers. More recently, the 2020 emergency measures for covid offered the possibility of conversion. The innkeepers regarded the idea with some favour; in May 2020, the situation was quite dire. But there was not a single taker.

Hoteliers were wary of a Social housing arrangement, and they may have good reason to be. VPO implies government ownership of properties. That’s normally the case, anyway. So is there a mechanism for assessing the value of the property?

What exactly does 50% imply? A report suggested that 50% of the floors would be social housing. A mixture of private property and social housing in the same building? Is that what’s on offer? For hoteliers to sell half of the converted properties on the Free market will undoubtedly be more to their liking, but then there will be their commercialization, if there is this mix in the same building. It is absolutely not a question of denigrating people in need of social housing, but one could nevertheless envisage a reluctance on the part of hoteliers to have this mix because of marketing.

Then there is location. The 2020 emergency measures only envisaged conversion in 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?

Circumstances are now very different from what they were two years ago when the Covid emergency measures were announced. With tourists are returning in droves, what will be the motivation for conversion? It turned out that there was none, even because of the pandemic, and it is suspected that this was partly because it was a 100% conversion for social housing.

And what about the jobs? The government says there will be mechanisms in the law to guarantee those lost as a result of a conversion. We look forward to hearing what it could be.

It’s a good idea that has proven itself elsewhere, exclusively for social housing. So it can be done. But will it be?

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