Home » Catalonia introduces controversial rent control bill as prices decline

Catalonia introduces controversial rent control bill as prices decline

rentl controls in catalonia

Falling rental prices in Catalonia haven’t stopped the regional government, known as the Generalitat, from passing a controversial bill aimed at controlling the rents that landlords can charge for residential properties.

The latest report from Spain’s biggest property portal Idealista reveals that rental asking prices in Barcelona are down 4% in a year, and I know from personal experience that it is probably significantly more than that. Barcelona is the hottest market in Catalonia.If rental prices are falling in Barcelona, they are bound to be falling in the rest of Catalonia.

Which hasn’t stopped the Generalitat from ramming a rental control bill through the regional parliament with 71 votes in favour and 63 against. The bill is arguably unconstitutional, so now the Constitutional Court will have to rule on its legality. That will create months, or even years of legal uncertainty concerning rental contracts in Catalonia.

Left wing groups like the Sindicat de Llogaters (Tenants’ Union) under the wing of Ada Colau, the Mayoress of Barcelona, were delighted the law was passed. They see it as a personal victory. They were the only ones the regional government consulted when drafting the bill.

Property owners in Catalonia are aghast, and none of the main associations of groups such as developers, estate managers or landlords were even consulted, despite their obvious interest in the bill.

This bill “will make access to housing even harder, and undermine the legal security of the sector because it is clearly unconstitutional,” says a joint statement from the main associations.

They argue that the new law, and the legal uncertainty it creates, will encourage owners to withdraw properties from the rental market in Catalonia, leading to less choice, and higher rental prices, as unintended consequences of the new bill.

The current regional government of Catalonia is hostile to the interest of landlords, and investors should take note.