PAH is an organization of people struggling to pay their mortgages and others expressing their solidarity with those affected. This organization was created in Barcelona in 2009, after Spain's housing bubble burst during the first phase of the European economic crisis. The group's founder and spokesperson is Ada Colau, an author from Barcelona and a long-time activist on mortgage-related issues.
Evictions are becoming an increasingly discussed issue in Spain. According to the Spanish Mortgage Association, between 2007 and 2012 nearly 400,000 families who could no longer pay their mortgage were evicted, due largely to rising unemployment and the deepening recession in Spain. The problem has become particularly sensitive in recent months after an increase in reports of suicides linked to evictions. It is impossible to know whether the reports reflect an actual increase in suicides — there are no official statistics about eviction-related suicides — but after receiving substantial coverage in Spanish media, the phenomenon became a political issue across the country.
Spanish society's growing awareness of evictions contributed to PAH's increasing popularity in 2012. PAH has three main proposals. The first is that homeowners who cannot pay their mortgages be allowed to give their homes back to the banks as payment in kind — and that this option be made available retroactively. Under Spanish law, those evicted remain liable for outstanding debt, even after the bank seizes their home.
The second proposal is a moratorium on evictions. This initiative, known as "Stop Evictions," proposes civil disobedience and passive resistance against foreclosures. In practice, this campaign involves organizing protests in foreclosed residences, blocking the path of judicial agents. According to PAH, this strategy has so far prevented almost 600 foreclosures.
The third proposal is that the Spanish government boost efforts to assist people who have been evicted. Suggested policies include granting subsidies to people who have been evicted so they can rent a new property at an affordable price.
PAH's Growing Activism
The group offers free legal advice to people affected by evictions, compiles anecdotes and collects donations to help those who have been evicted. In recent months, PAH has gained a higher profile in the media and has added political weight thanks to an increasingly active campaign. The group's current strategy has two elements: to increase its presence in the streets and to seek reform of Spain's mortgage laws.
In line with the first part of its strategy, PAH has organized numerous protests in recent weeks. On Feb. 16, the group organized protests in 50 cities across Spain. According to organizers, PAH gathered more than 80,000 people in Barcelona, though the police put the number of demonstrators around 12,500. PAH has also increasingly harassed politicians. Members often organize protests at the homes of Spanish lawmakers, follow them on the streets and send them letters and personalized videos. This strategy aims to pressure Spanish lawmakers to modify mortgage laws.
The second aspect of the PAH's strategy is legal. The group collected 1.4 million signatures and in February presented a popular legislative initiative to the Spanish parliament to modify the country's mortgage laws. This initiative was backed by Spain's main trade unions and left-wing political parties. Moreover, polls showed that more that 80 percent of the Spanish population supports the initiative.
On March 14, the European Court of Justice ruled that Spain's mortgage laws go against the European Union's legal principles. According to the court's ruling, Spanish judges should be allowed to halt evictions when homeowners contest abusive clauses in their contracts, such as excessively high interest rates when a loan falls into default. The ruling came after a judge in Barcelona asked the European Court of Justice whether Spanish mortgage law was in line with EU law, and the ruling led PAH to demand the cancellation of all pending eviction proceedings.
Political pressure from PAH and the ruling by the European Court of Justice forced Spain's ruling Popular Party to discuss mortgage laws in parliament. On March 26, all groups in parliament presented proposals to modify mortgage laws. The opposition Spanish Socialist Workers' Party expressed its support for all the proposals included in PAH's popular legislative initiative. The Popular Party said it will not support the retroactive application of insolvency mechanisms, the key element in PAH's initiative.
Political and Financial Implications
PAH's growing political clout can have many consequences in Spain. Originally, the group aimed its criticism at banks and the Spanish legal system. PAH considers itself apolitical, but in recent weeks it has increasingly targeted politicians, and it has especially singled out the ruling Popular Party for blame. This growing anti-establishment rhetoric comes at a time when similar sentiment is growing in other parts of Europe as a result of the economic crisis.
Anti-establishment sentiment has ample room for growth in Spain, especially considering the ruling Popular Party is in the middle of a corruption scandal. Furthermore, PAH has links with the 15M Movement, the protest group that helped bring about the end of Jose Luis Rodriguez Zapatero's socialist government in 2011.
This set of circumstances has led to a clash between the Popular Party and PAH. The party has accused the group of links to the far left and even to Basque terrorism. This reaction is likely to increase the friction between PAH and the Spanish government, and it could hurt Madrid more than the activists, since most of the Spanish population considers evictions a serious problem.
PAH's pressure puts Madrid in a bind. Evictions are unpopular in Spain, but Spanish banks are in a delicate situation — especially after receiving a bailout from the European Union in 2012. Softening mortgage laws could increase popular support for Rajoy's government, but it could also weaken Spanish banks.
If Spanish judges are given more power to prevent evictions, and if people start looking for abusive clauses, the eviction process could become lengthier, less efficient and more costly for banks. Although there are no official figures, reports in Spanish media estimate there are more than 250,000 homes with market values less than the mortgages to which they are linked. If PAH's initiative is approved, thousands of homeowners could hand over the keys of their homes to the banks. This would force banks to take further losses caused by the cancellation of these mortgages.
In this context, reform of Spanish mortgage legislation seems likely, but Madrid will need to find a balance between social demands and banks' needs. Some reforms are possible, especially reforms that would bring Spanish mortgage laws in line with the requirements of the European Court of Justice. A moratorium on evictions is also likely — Madrid already passed a similar measure in November 2012. However, PAH's main request — the retroactive nonrecourse debt — seems less likely. Consequently, PAH's activism will probably increase in the coming months. If the group maintains its current levels of popular support, it could transcend its current agenda and adopt a more political role in Spain.