What happened? Spain’s Cabinet on Tuesday approved a bill to control rents. The government said vulnerable families and young people in Spain’s largest cities will be the main beneficiaries of the new law.
Controversy. Spain’s leftist governing coalition wants to curb rising housing prices by imposing limits on rent increases for owners of 10 or more residential properties. Opposition parties and business leaders have criticized the proposal as undue interference in the free market by Prime Minister Pedro Sanchez’s government.
Context. Many Spaniards, especially the young, cannot afford to live on their own. The reason for this is low wages and a record youth unemployment rate. It is 35%, the highest among the 19 countries of the Eurozone. As a result, Spaniards leave the family home at an average age of 30 years, compared with an average age of 26.4 years in the European Union. High rents and unaffordable housing have already led to protests this spring.
The bill. The most controversial provision of the bill was to set a cap on rate increases for landlords with multiple residential properties. Large real estate companies and investment funds would be primarily affected. Officials also said the bill included tax credits of up to 90 percent for landlords with fewer than nine properties who choose to lower their rents.
Youth. The prime minister announced that in a separate initiative, the government plans to help Spaniards between the ages of 18 and 34 by giving them a monthly rent supplement of €250 for up to two years if they earn less than €1977 a month.
Affordable housing. The law would also allocate 30 percent of all public housing to rent instead of making it available for purchase at a reduced price, and would significantly increase local taxes on vacant housing.
