Balearic government to requisition 56 empty homes from ‘major owners’

The Balearic government has announced it plans to requisition 56 empty homes spread over Mallorca, Menorca, and Ibiza, for a period of seven years, and force the owners to rent them out below market rates. Other regions like the Valencian Community are reportedly studying similar measures.

Housing policy is devolved to Spain’s 17 autonomous regions, so regional governments can regulate housing markets within the limits of the Spanish constitution. The Balearic government used this power to pass a housing law in 2018 that allows it to temporarily requisition empty homes in the ‘speculative market’, and force the owners to offer them as affordable housing with below-market rents, or face penalties. This law has now been invoked in the case of 56 empty homes owned by ‘major owners’ defined as owners of 10 properties or more, who will now have to rent them out to tenants under terms dictated by the local authority.

Empty homes are defined as properties that have been empty for two years or more ‘without justification’. The government claims it has identified 700 homes in the possession of ‘major owners’ in the region that fall into this category, out of a total of 6,000 homes belonging to banks, investment funds, developers, and private individuals who own 10 or more properties.

In keeping with the law, the government will pay the owners a total of €1.8m at the start of the seven year period to cover the rent for the whole period, but the owners will have to stump up the cash to make the properties habitable, and pay all ongoing management and maintenance costs.

The Balearic government says it will pay a rent “considerably inferior” to the market rate of 624€/month identified by the rental index created by the government in Madrid, which means they expect private owners to subsidise the Generalitat’s housing bill. The Generalitat will pay 408€/m for 27 homes in Mallorca, 336€/m for 13 homes in Menorca, and 520€/m for 6 homes in Ibiza, making up the difference, if any, between the rent paid and the tenants capacity to pay, which should never exceed 30% of household income. 

The government expects the owners to lodge a legal appeal against the measure, but argues it can still go through with requisitioning the properties whilst the legal appeal goest through the courts.

It’s clear from official statements that the Bealearic government is proud to be the first region to force owners to rent empty properties below market rates. “This is a pioneering measure for the whole country,” said Josep Marí, Balearic councillor for Housing and Mobility, announcing the measure, whilst claiming that other regions are far behind the Balearics. 

But the news service of the Spanish property portal Idealista reports that several other regions like the Valencian Community, the Basque Country and Catalonia have housing laws that contemplate the temporary confiscation of private property for affordable housing under different circumstances, and are watching developments in the Balearics closely. It may not be long before other regions follow suit. 

Private property associations like the Landlords’ Association Asval say these measures will reduce housing investment, and lead to a more chronic shortage of affordable housing over time.