Observatory of Brand Andorra: EU Networks and the “Vienna” Solution to the Housing Problem

“The story of Andreas and Franziska in Vienna is a very good way to exemplify what it means to participate in the EU networks that bring so many solutions regarding the right to decent housing at an affordable price”.

We have just closed an Association Agreement with the European Union, which, by the way, still lacks some procedures, especially the most important, the binding referendum that must give it the final green light, if the citizenship decides so. This will happen towards the end of next year 2024, but in the meantime, we are left with the problem of loss of purchasing power and battles between trade unions, employers, and the Government over wage increases, and with the housing problem, which has become a State issue and undoubtedly the most worrying.

In fact, there have already been two protest demonstrations in this regard and the Government has approved a series of measures, among them Law 24/2023 of November 28, on stimulus measures and stability of the housing rental market, which will be followed by the modification of the legislation on foreign investment in real estate, or the legislation that regulates access to housing.

In this sense, a few days ago I was reflecting on what I understood to be the correct way to welcome foreign investment in terms of its assimilation and integration into our society, which was none other than harmonious cooperation with those international interests led by future citizens of Andorra, who choose our country to grow but also to make us grow. A collaborative strategy that in essence rescued that mid-last century way of doing things, which knew so well how to welcome people from all over and whose fruit today are the third or fourth generations of citizens who live and even govern with complete naturalness in their home, this host country that now faces a new but exciting transformation process called “Europe”.

In this context, I was also remembering a famous document born in 2012 at the CEA, the “Invest With Andorra” (“IWAND”) created with the spirit of welcoming foreign investment in a collaborative way to jointly develop initiatives, which differed from the concept of “Invest In Andorra” with somewhat more aggressive connotations and perhaps not so propitious at that time, between OECD black and gray lists, financial crises, and the global economic decline that forced the decision to end the opacity of some territories, like ours.

Be that as it may, the strategy of making known the new offer of Andorra as a jurisdiction has worked but poorly, and twelve years later we find ourselves forced to “defend ourselves” from the “speculative foreign invasion” and its most harmful effects, especially on inflation and the disproportionate increase in housing prices, inaccessible to the majority of our citizens.

It is clear that the economic diversification process envisioned in 2012 has not yielded the desired result, promoting more speculation than the effective growth of new strategic sectors, and therefore, we have a new opportunity to address this deficiency with the association agreement with the European Union and the prospects it offers of becoming part of the European Single Market. We could say that until today we have been more “IN” than “WITH”, and that perhaps it behooves us to rescue its essence, that of “WITH”, to face the new bond with Europe in a cooperative, open, proactive, and empathetic way, entering into the dimension of “WITH EUROPE”.

For some time now, the issue of the housing problem has been of enormous concern to the citizenry, social agents, and the Government, and indeed, some measures have already been taken to confront it although, it must be said, from a very local perspective, as if the problem were only ours and we had to solve it alone, when in reality, this is a concern of international dimension and it is in this area where we will have to learn to move in a future closer to Europe.

Precisely, within the European framework and its internal market, the issue of housing and its multiple manifestations are dealt with both at the local/national and transnational level through networks of collaboration between States. In fact, this is one of the most usual ways of working to promote the sharing of expertise among all the members of the single market and other associated states, so that all contribute experience and knowledge and mutually enrich one another.

An example is the “Eurocities” network (one of the many networks promoted and financed by the EU) and one in particular, based on the improvement of social housing (at an affordable price), inspired essentially by the example of Vienna, the city considered to have the best quality of life in Europe and which has best addressed and solved the housing problem. In fact, it is a city where approximately 60% is publicly owned and which, together with the rest of the social housing policies, has made it a reference for other European cities that try to imitate it, especially for the practical solutions implemented in favor of its citizens.

The promotional explanatory video of the city of Vienna (https://youtu.be/mReXZJdo2lo?si=Dx3EkpizRT6qVZWP) and its strategy to combat evictions and the lack of housing, which through the experiences of two characters, Andreas and Franzisca, and in the face of the uncontrolled increase in the rental market and the loss of purchasing power, exemplifies how a worker can be helped to opt for public housing that represents a maximum of a third of their salary and at half the market price, or how a nurse, a separated mother with a child in her care, can face a general situation of non-payment with the help of a specialized public entity that helps her renegotiate debts, to resolve the housing issue at a more affordable price or even regarding the care of the child through specific aids for kindergarten.

All this is possible thanks to a strong investment for years in public housing and an extraordinarily committed social policy, which in turn has allowed the creation of working groups with representatives of other cities that also have their particular circumstances and that try to find better solutions learning from the experience of the others.

In the end, Eurocities is a network of cities financed by the European Union that shares good public management practices among the various cities that are members of its network and participate in its programs, dealing with all kinds of management issues, from housing to sustainable mobility or care for the elderly, as areas of more interest to us. The fact that Andorra could become a member of Eurocities would allow the Communes and the Government itself, if it decided to participate, to be up to date on the most effective public policies in such a sensitive area as the lack of affordable housing, and not have to solve it alone as if it were an exclusive problem of our country, when we see that it is a generalized problem throughout Europe.

In conclusion, contrasting experiences and circumstances with other territories can be tremendously satisfying and effective in finding the best remedies for this increasingly distressing housing problem. In fact, Andorra should take advantage of the context of the Association Agreement with the EU to participate not only in the Eurocities network but also in other equally interesting ones (Energy Cities, United Cities and Local Governments CGLU, Cities Alliance, ……), in order to expand its connection with the continent and to learn how to make better public policies in all areas such as social housing, care for the elderly, support for youth, water and energy management, among others, all very current and pressing issues that can be managed better if Andorra learns from its EU partners and other associated states.

I believe the story of Andreas and Franziska in Vienna unites us in a very good way to exemplify what it means to participate in the EU networks that bring so many solutions regarding the right to decent housing at an affordable price. I want to believe that even the most denialist and eurosceptic Andorrans must see as extraordinarily positive to interact within the framework of the European Single Market and the described networks to find the most imaginative solutions to the housing problem. The pedagogy regarding the Association Agreement, beyond impact studies, should go in the indicated direction. Therefore, “WITH EUROPE” better than alone, don’t you think?

By Pere Augé, CEO and Founding Partner of Augé Holding Group

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