Leveraging Right of First Refusal for Effective Housing Policy

• Proposals suggest using the 'right of first refusal' (tanteo y retracto) as a more effective tool for public housing policy than traditional expropriation.
• Conventional expropriation often rewards investment funds with market-value compensation plus premiums, whereas the right of first refusal allows public entities to purchase properties at the transaction price negotiated by private parties.

Benefits of the Right of First Refusal

• Allows government intervention when investment funds or corporations attempt to acquire residential properties.
• Enables the public sector to acquire housing at discounted rates often available to large-scale buyers, increasing public housing stock with fewer resources.
• Limits the profitability of speculative funds, serving as a more effective deterrent against predatory real estate practices than standard legal mechanisms.

Mortgage Portfolios and Vulnerable Residents

• Applying this right to the sale of mortgage debt bundles allows authorities to acquire properties already occupied by vulnerable households.
• Facilitates housing stability by enabling debt-for-equity swaps (dación en pago) and social rent agreements, protecting families at a lower cost than finding alternative emergency housing.
• The mechanism has been successfully implemented in places like Valencia, providing a proven framework for preventing evictions and expanding affordable housing.