Spain’s government is set to implement new regulations aimed at curbing soaring rental prices and addressing a significant housing shortage. Prime Minister Pedro Sánchez announced “urgent and decisive” measures, including caps on room rentals and tighter controls on seasonal leases, to be enacted via royal decree in the coming weeks. These initiatives seek to prevent price gouging and ensure fairer housing conditions for residents amidst a booming tourism sector that has exacerbated the affordability crisis.
Addressing Soaring Rents and Housing Shortage
Spain, a popular tourist destination, faces a severe housing deficit, with average rents doubling over the past decade, far outpacing salary growth. The government’s new decree aims to intervene directly in the rental market to alleviate these pressures. Prime Minister Sánchez emphasized the need to “continue intervening in the rental market” during the inauguration of Spain’s largest public housing project in Madrid, which will provide 10,700 affordable homes.
New Regulations for Rental Contracts
The upcoming decree will introduce several key measures. A significant change will be the implementation of limits for combined room rents, setting them at the level of a full apartment to curb exploitative practices. Rent controls will also be applied in designated “high-pressure” areas where prices have become particularly unaffordable. Furthermore, conditions for seasonal rental contracts will be tightened, with sanctions introduced for their misuse as a substitute for long-term leases. Homeowners’ associations and experts have noted that current regulations often favor short-term rentals, a trend these new measures aim to reverse.
Incentives for Landlords and Regional Enforcement
To encourage long-term rental stability, the government will offer a 100% personal income tax rebate for landlords who renew leases without increasing rents. This measure is designed to create incentives for property owners to offer more stable and affordable long-term housing options. However, the enforcement of many housing measures relies on Spain’s autonomous regions, some of which are governed by opposition parties that may be reluctant to fully comply. Despite this, regions like Catalonia have already adopted ceilings for seasonal and room rents, and cities such as Madrid have implemented curbs on tourist apartment rentals, indicating a growing trend towards stricter regulation.
Housing Deficit and Construction Levels
The Bank of Spain estimates the country’s housing deficit at approximately 700,000 units, a figure that has increased from previous estimates. Official data reveals that only about 120,000 new homes are built annually in Spain, a stark decrease from pre-2008 financial crisis levels. The Campamento project in Madrid, transforming a former military site into state-owned affordable homes, is part of the government’s broader strategy to increase housing supply.