The Spanish home ownership sector has been hit hard by the economic crisis. Repossessions stand at around half a million in the period from 2008 to 2014. This article investigates how the authorities, both at the level of the Spanish state and of the autonomous communities (regions), have responded to this problem. We investigated whether they assist troubled home owners and aim to design a less risky housing system, with more (social) rental housing. Our research in Catalonia, the Basque Country and Andalusia shows that Autonomous Communities are playing an increasingly important role in this matter. This finding fits well with theories on the formation of regional varieties of welfare, which indicate that flaws of the central governments in providing social welfare, are increasingly addressed by regions. The Basque Country seems to be on the way of designing the most comprehensive system of housing policies of the three regions, including a strong Right to Housing. All three regions regard the mobilisation of the large vacant dwelling stock as an important means to provide more affordable rental housing. However, the owners are often unwilling and the three regions have proposed drastic measures, such as fines and even temporary expropriations. The central government resists such measures, because they might interfere with the proper working of the country’s financial system. It shows that certain policy competences can never be totally isolated from other policy fields and multi-level distribution of competences makes it all the more complex.

This work analyses the residential boom, its collapse and the consequences of this collapse. As far as these consequences are concerned, we particularly pay attention to the phenomena of repossessions and evictions since these have a strong impact on the lives of people. The paper uses a welfare system perspective to explain how the importance of repossessions and evictions differs between European countries and regions. The research is based on a literature review and an analysis of policy documents and secondary data sources. Three different levels of scale are considered in our analysis: Europe, Spain and Basque country. The main research findings are outlined in the remainder of this abstract. The paper starts with an overview of house price developments and repossessions in different European countries. We observe that, even though house price developments have followed a rather similar path across Europe (a boom followed by a bust), the importance of repossessions clearly differs between countries. Based on a literature review, we conclude that the risk of repossession has six main dimensions (see also Cano et al., 2013): the employment situation: the higher the level of unemployment, the higher the risk of repossession; the social protection schemes: a lack of good social protection schemes increases the risk of repossession; the structure of the housing and housing finance markets: a large share of home ownership and relatively high mortgages increase the risk of repossession; the lending practices: high loan to value ratios and the occurrence of subprime mortgages increase the risk of repossessions; the house price development: a strong fall in house prices after the outbreak of the crisis increases the risk of repossessions and residual debts; the effectiveness of policies to prevent repossession: the absence of effective policies by either the government or the banking sector increases the risk of repossessions. An international comparative analysis shows that these risk factors are not equally distributed across the different types of welfare state regime. They are more prevalent in the liberal and Mediterranean welfare state regime than in the social-democratic and the corporatist welfare state regime. Indeed, the available statistics show that the number of repossessions is particularly high in Spain and Italy (Mediterranean welfare state regime) and the United Kingdom and Ireland (liberal welfare state regime). Especially Spain stands out as a rather dramatic case. The second part of the paper analyses the boom and bust on the Spanish housing market and describes how the various risk factors outlined above have developed in this country. We conclude that the number of repossessions has strongly increased after 2007 and that the response of the Spanish government to this problem can best be described with the term 'too little, too late'. Only recently, the Spanish national government has introduced a moratorium on repossessions for specific types of home owners. The third part of the paper focuses on the situation in Basque country. In this autonomous region, there are relatively few repossessions and evictions, which seems to be due to the fact that the regional government and the local banks are conducting active policies to prevent this problem. Furthermore, the level of unemployment in Basque country is relatively low compared to that in the rest of Spain, whereas the social protection system is better.