Mogán Considers Public Debt for Affordable Housing After Failed Bids

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Mogán Considers Public Debt for Affordable Housing After Failed Bids

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Mogán, a municipality in the Canary Islands, is facing a significant housing crisis, leading its City Council to consider incurring debt to construct public housing. This decision comes after a second failed tender in August 2026 to build 202 affordable homes in Puerto Rico, part of the Motor Grande area. No construction companies submitted bids for the project, even though the council offered fiscal incentives and financial benefits to attract private operators.

Mayor Onalia Bueno expressed surprise and disappointment, noting that two years of work had been invested in the project. The initiative was divided into two lots: one for 72 homes with an estimated cost of 8.2 million euros, and another for 130 homes estimated at 15.8 million euros. The City Council had attempted to use an “Incentivized Affordable Housing” model, and previously, a right of surface cession, where private developers could build on public land with a lease, but both approaches failed to attract interest.

The housing crisis in the Canary Islands is exacerbated by factors such as a surge in tourism, a high concentration of tourist accommodation, and rising rental prices, with average rent on the archipelago reaching €1,200 per month earlier in 2025, a 21% increase over five years. In Mogán, the price per square meter reached 3,593.50 euros in August 2024, a 74.46% increase over 12 years. The municipality’s population has also grown significantly, increasing by 58.69% from 13,136 inhabitants in 2000 to 20,845 in 2023, further intensifying housing demand.

Given the lack of private sector interest, the Mogán City Council is now exploring directly undertaking the construction of these homes. This move is significant as the City Council recently cleared a 15.5 million euro financial debt in July 2026 by repaying a loan ahead of schedule, saving nearly one million euros in interest. Additionally, in August 2026, the Mogán City Council and the Government of the Canary Islands announced progress on transforming an unfinished building into 44 protected homes, with the acquisition of the building made possible by a 1.5 million euro subsidy.

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