VPO homes are controlled by the Balearic government. | Teresa Ayuga

VPO stands for Vivienda de Protección Oficial, homes with official protection that are made available by public administrations in Spain at prices below market value. A form of social housing, they are intended to offer affordable homes to purchase (or rent) to people who would otherwise not be able to afford to buy. Administrations set the prices for these homes.

In the Balearics, as is the case in other regions, the government builds its own VPOs. These are exclusively for rent and are controlled by the Ibavi housing agency. The other form of VPO, for purchase, is in the hands of developers.

A problem right now for the Balearic government is that its rate for the sale of VPOs is not high enough to incentivise developers. Land has been designated for VPO development, but this is not happening as it is not profitable. The government is therefore to approve an increase in the average sales price. This is set to rise to 1,940 euros per square metre; the average on the open market is around 3,000 euros.

The government has been working on a price review for several months. Developers, builders and the College of Architects have been involved with this review. The increased price, it is hoped, will allow for more building.

Preference will go to people registered on the Ibavi housing application list. Once purchased, these homes will retain the VPO classification, meaning that owners cannot later sell them on above the agreed price. Reformed housing legislation means that VPOs remain under government control in perpetuity, the previous system having allowed them to be placed on the open market after a period of thirty years. A consequence of that system has been the loss of a great deal of VPO stock.