Design and implementation of a working group to address social housing legislation challenges at a leading financial institution in Spain
The creation of the Social Housing Organization unit allowed the bank to protect its reputation and achieve strategic milestones through efficient real estate management and improved internal coordination.
Challenge
The financial crisis that began in 2008 led to a significant increase in default rates, causing imbalances in the real estate market. In this context, a leading financial institution in Spain faced a growing inventory of repossessed properties, many of which were social housing units.
In 2018, the institution decided to sell a large part of its real estate portfolio to an investment fund, retaining mainly assets related to social housing. However, in 2020, with the onset of the COVID-19 pandemic, the situation worsened due to the enforcement of new social housing protection laws.
This portfolio of social housing posed several challenges for the institution, including:
In 2018, the institution decided to sell a large part of its real estate portfolio to an investment fund, retaining mainly assets related to social housing. However, in 2020, with the onset of the COVID-19 pandemic, the situation worsened due to the enforcement of new social housing protection laws.
This portfolio of social housing posed several challenges for the institution, including:
- Increased costs associated with property management and repossession.
- Lack of coordination between the departments responsible for real estate management.
- Growing and increasingly organized social pressure, negatively impacting the institution’s reputation.
Solution
To address these challenges, we launched the Social Housing Organization project, aimed at reducing the inflow and stock of repossessed assets in social rental, while safeguarding the bank's reputation. Key actions included:
- Governance establishment: We organized a clear framework of roles, responsibilities, and working groups to coordinate all involved areas.
- Parameter definition and monitoring: We implemented KPIs and a Dashboard to monitor and control the real estate portfolio.
- Strategic plans and projects: We designed and implemented specific initiatives to reduce both the inflow and stock of social housing properties.
Benefits to the Organization
The creation of the Social Housing unit delivered key results:
- Reputation protection: The bank enhanced its public image by efficiently managing the real estate portfolio and proactively responding to social pressures.
- Positive economic outcomes: Improved management of repossessed assets, optimizing costs and generating value for the institution.
- Enhanced internal coordination: Increased cooperation between departments, facilitating the implementation of strategic social housing plans.