According to real estate website Fotocasa, rents in Spain have risen by more than 40 percent in the past five years.
What happened? The Spanish government has approved a plan to control rents and raise taxes on some empty homes. The goal is to make housing more affordable because rising prices create a risk of excluding people with lower incomes from the real estate market.
According to Spanish Minister of Transportation, Mobility and Urban Affairs Raquelí Sánchez, the housing law would limit the extent to which owners of multiple residences could raise rents. It would also raise taxes on landlords who leave multiple houses or apartments vacant, and could require some new housing projects to dedicate some units to social housing.
Quote. “There is an urgent need to fight the pernicious rise in prices, to fight the growing inequality,” Sanchez told reporters after a Spanish government meeting.
“This is the way out of the maze that many people are in because they can’t pay for the housing they want to buy or find housing to rent at a reasonable price,” she added.
Context. The bill, proposed by the ruling Socialist Party and its extreme left-wing coalition partner Podemos, is the government’s response to rising rents, which makes it increasingly difficult for Spaniards with low incomes to afford housing. According to the real estate website Fotocasa, over the past five years rents in Spain have increased by more than 40 percent.
Implications. The law could affect large institutional investors. For example, the company Blackstone Group has invested billions in the acquisition of Spanish real estate after the financial crisis in the country in 2012 and the subsequent collapse of the housing market.
Owners of 10 or more properties will have to cap the price in new leases in areas where rents are rising fastest.
The government would use a reference price index to control increases in so-called “pressure zones,” Raquel Sanchez said. The bill is due to take effect in the second half of 2022, after parliamentary approval.