Spanish lawmakers on Thursday approved a bill aimed at capping soaring rents and addressing dire social housing shortages as the government seeks to bolster the right to affordable homes.
The proposal, which passed with 176 votes in favor to 167 against with one abstention in the 350-seat chamber, seeks to cap rent hikes, increase help in high-demand areas, boost protection for those facing eviction and sanction landlords for leaving properties empty . It will now go before the Senate before returning to Congress for a final vote, likely in mid-May.
Flagged by Prime Minister Pedro Sanchez as the “first-ever housing law” since Spain’s return to democracy in 1975, the bill is part of a reform promised to Brussels in exchange for EU recovery funds.
“With this housing law… and the push we’re giving to social housing in the coming years, we’re going to change the paradigm so what is today a luxury will become a basic resource for young people,” Sanchez said outside parliament . Spain’s left-wing government wants to fast-track the bill into law before regional and local polls on May 28. The government says the legislation aims to meet the needs of those struggling to afford housing while limiting property speculation.
“Spain has a huge, very serious problem with housing,” Sanchez said last week, saying average rents had risen 45% between 2014 and 2021, making housing “unobtainable for many people, especially young people.”
Soaring rents have sparked bitter debate in a country traumatized by the collapse of its housing sector after the 2008 financial crisis, when thousands of families were evicted after being unable to pay their mortgages. Podemos, the hardline left-wing junior partner in Sanchez’s coalition, hailed the move as drawing a line under years of property speculation.
“Since the property bubble burst, the banks and vulture funds have had free rein to do exactly what they wanted… Now all that is over,” the party said on social media.
Ahead of Thursday’s vote, Sanchez unveiled plans to add 113,000 homes to Spain’s depleted social housing stock. But the move was rubbished by the right-wing opposition Popular Party (PP) claiming it failed to address long-term housing problems.
“A fantastic opportunity for squatters,” the PP said, denouncing the bill as making the eviction process “harder and slower”, claiming squatting had “risen by 50% in recent years”.
Rental caps risks
Under the proposal, rental rises will be decoupled from the consumer price index and permanently capped at 3% in 2024, with a new index due to be set by 2025. It will allow regional authorities to designate as “stressed areas” neighborhoods where particularly high prices are driving out tenants, and cap rental prices. The text also penalizes landlords for leaving homes empty if they own more than 10 properties – or five in stressed areas. It also obliges them to inform those facing eviction of the exact date and time they must leave and lengthens the grace period for vulnerable tenants.
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But Spain’s Exceltur tourism association warned that capping rents in high-demand areas could backfire.
“It could end up further aggravating the problem, giving a strong incentive to transfer properties from the residential market to tourist rentals where there are no ceilings,” it said.
Although the government has made affordable housing one of its priorities, Sanchez admitted more was needed to address the crisis in a country with one of the smallest percentages of social housing in the EU.
“We know this law is not enough, which is why we need to increase the supply of public housing from the shameful three percent of total housing stock to the 20% of the most advanced countries,” he said.
Experts agree more social housing is urgently needed.