Spanish Government rejects regional calls for rent controls

Discussing housing policy Ada Colau, Mayoress of Barcelona (left) with Iñigo de la Serna, Spanish Minister of Public Works (right). Photo credit. Ajuntament de Barcelona

Ada Colau (left), Mayoress of Barcelona, meeting with Iñigo de la Serna, Spanish Minister of Public Works. Photo credit. Ajuntament de Barcelona

Regional calls for rent controls led by Mayoress of Barcelona, Ada Colau, have been swatted away by the national Government in Madrid.

On a visit to Barcelona last week, the Minister for Public Works (Fomento), Íñigo de la Serna, met with the Mayoress of Barcelona Ada Colau, to discuss infrastructure investment and housing policy in the Catalan Capital.

Colau has been leading calls for rent controls in the city, as the housing market struggles with growing demand and a shrinking supply of both homes for rent and sale, driving up the price of both. The idea of rent controls has found support amongst other regional and local politicians on the left in areas where prices are rising, for example in the Balearics.

However, de la Serna, from the national Government in Madrid, currently run by the centre-right Popular Party with support from the centre-left Socialist Party, made it clear that rent controls are not on the cards. In response to a question during the press conference after the meeting, de la Serna said Madrid has no plans to introduce rent controls or increase the minimum duration of rental contracts.

Normal rentals are regulated by Spain’s Tenancy Act (Ley de Arrendamientos Urbanos, LAU), which is decided by Madrid. So although municipalities like Barcelona and Palma de Mallorca have some scope to regulate holiday rentals, they have no authority to impose rent controls on the primary housing market.

De la Serna announced that the income threshold for receiving rental support will go up from €600 to €900/month, but I expect the problem of affordable housing in Barcelona will only get worse with no new building land in the city to increase the supply of homes for rent. And I’m quite certain that demand will continue to rise for at least the next few years.

Increase housing supply and make the city more beautiful

But there is a way that Barcelona could significantly increase the supply of housing in the centre, and make the city more beautiful in the process.

barcelona paredes medianeras lateral exterior walls

Almost every street in Barcelona is blighted by blocks of flats of different heights with ugly lateral exterior walls (paredes medianeras) that look awful (the example pictured above is in Gracia). I’m told that, in many cases, this is a legacy of corruption from the Franco years, as many blocks were built higher than planning rules allowed (and lateral walls left unfinished). If they now allowed buildings and their communities of owners to add floors to make streets more uniform in height, the increased supply of housing in the city centre might take some of the heat of rents. It would also make the city more visually attractive.

It’ll never happen though, so rental prices will just carry on rising in Barcelona, and rent controls are not the answer. New ideas are needed, as blaming “speculators” won’t solve the problem.

About Mark Stücklin

Mark Stücklin is a Barcelona-based Spanish property market analyst, and author of the 'Spanish Property Doctor' column in the Sunday Times (2005 - 2008).

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