Spanish Premier Takes on ‘Vulture’ Goldman Over Social Housing

(Bloomberg) -- Spanish Prime Minister Pedro Sanchez is squaring up for a legal clash with Goldman Sachs Group Inc. over its investments in social housing in Spain.

His government plans to introduce a bill in Congress that will ban the sale of public housing to investment funds, Sanchez said on Wednesday. The state is also planning to join a legal complaint investigating the region of Madrid’s sale in 2013 of apartments reserved for those on low incomes to a Spanish partner of Goldman, the government said.

Sanchez is rekindling a long-running political debate led by his left-wing rivals Podemos about the ethics of handing over public housing to the private sector. Goldman is still defending lawsuits over allegedly illegal evictions and rent increases, after snapping up properties from a cash-strapped local authority in the wake of Spain’s financial crisis.

Sanchez told lawmakers the new law will end the sale of public housing to what he called “vulture funds.”

Goldman Sachs declined to comment, while investment fund Azora Gestion Inmobiliaria SL -- its partner in a deal that covered nearly 3,000 apartments for those on low incomes -- wasn’t immediately able to comment.

The sale of the homes to Azora “meant that, in practice, the tenants of these public housing units had to leave due to considerable price increases imposed by the new owner,” the government said in an e-mailed statement.

Blackstone Group LP, the world’s largest private-equity investor, was another active investor in protected housing. It bought 1,860 rental units in 2013, the year after Spain’s debt crunch peaked. The company wasn’t immediately able to comment on the new law.

To contact the reporter on this story: Charlie Devereux in Madrid at cdevereux3@bloomberg.net

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Geoffrey Smith, Ross Larsen

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