With the government working on new regulations to restrain rental prices in hot markets, influential trade unions have called for district-wide rental caps linked to average local incomes in ‘tense markets’, and tighter screws on holiday rentals in urban areas.

Highly influential with Spain’s new left wing government, Spain’s two biggest unions – UGT and CCOO – have presented a ‘Trade Union Initiative for the Right to Housing’ calling for the government to intervene more in the housing market, including the holiday rental sector.

As they point out, Spain is one of the EU countries with the smallest public budget for housing, just 0.1% of GDP, and hardly any social housing has been built in the last decade, following the financial crisis and Spanish property crash.

The unions call on the government to “Regulate and intervene in the rental market to bring it into line with local incomes, the right to housing, and its social function,” whilst spending more on the provision of social housing for rent.

As far as the unions are concerned, rent controls should kick in when average rents eat up 25% to 30% or more of local household incomes. So far, no details are available on how this would work in practise.

Tourist rentals in hot markets

The unions also want to see more regulation of tourist rentals, in particular in hot urban markets where rental prices are high. “The proliferation of tourist accommodation in the main urban areas, and places with strong tourist demand, is driving up property prices, and reducing the supply of homes for rent,” they argue. They are basically calling for tighter regulations in areas where tourists and local residents compete for accomodation, which creates upward pressure on housing costs. They don’t have your average rental apartment or villa on the coast in mind.

As a first step they propose market research to quantify the holiday rental market and its presence in different areas, allowing the authorities to ‘saturated areas’, where homes offered for short-term stays to tourists are highly concentrated.

They also call for more funds to build social housing for rent. They want the government to increase spending on public housing to 0.3% of GDP in 4 years (4 billion Euro), and up to 1% in the longer term.