Housing was a big issue in Madrid’s regional elections on Tuesday when the Right won a convincing victory over left-wing parties, with wider implications for property markets in Spain.
In an election day of high participation (76%), the right-wing parties of the PP (centre right) and Vox (hard right) trounced the combined forces on the Left of the PSOE (centre left), Más Madrid (green left) and Podemos (hard left), with the centrist Cs party wiped out altogether. The PP ended up with 65 seats, 4 seats short of an overall majority, putting their leader Isabel Díaz Ayuso in a commanding position, but still needing the support of Vox (13 seats) to govern the region.
“A crushing election victory for a combative conservative leader who kept Madrid open during the pandemic has boosted the Spanish right’s chances of regaining national power,” is how Times correspondent Isambard Wilkinson put it. “The result dealt a severe blow to the Socialist-led coalition government of Pedro Sánchez, the prime minister, who took part in the election campaign.”
Housing is getting more political in Spain, and played a significant role in this election campaign, partly because the hard-left Podemos party has made intervention in the housing market a signature issue, and put housing policies high on the agenda. I’m not trying to argue that it was the main issue of the campaign, but it was an important point of differentiation between the parties.
Ayuso campaigned on a programme of lower taxes, increased housebuilding in public-private partnership on municipal land with a target of 25,000 affordable new homes and lower rents, tax breaks to encourage the rental market, subsidies for first-time buyers, mortgage tax relief, and new town planning regulations to encourage investment in house building. Madrid under the PP has also taken a tough line against squatters, which helps explain why the numbers have been falling in Madrid according to official figures.
The Socialists promised more affordable public housing, incentives for renovation, and soft intervention in the market to contain rents. The Socialists were one of the elections biggest losers, despite a sensible if lackluster campaign.
Further to the left, the greens of Más Madrid, and hard-left of Podemos, argued for more intervention in the market to control rents, increase taxes, reduce speculation, stop gentrification, drive out ‘vulture funds’, increase housing subsidies, requisition housing for public use, clamp down on tourist rentals, encourage or force owners of empty properties to put them on the market, increase red tape for housing development, rewrite planning laws, pause and review all major planning projects, introduce a social housing quota of 30% for all new developments, and stop all evictions for whatever reason.
Although the election result was probably decided by emotional factors such as personalities, feelings towards the covid response, and much talk about liberty and democracy, communism and fascism, nevertheless the voters of Madrid roundly rejected a left-wing programme including more intervention in the housing market, which could have implications for policy in other regions, where politicians might take note.
Good or bad?
Perhaps it means nothing outside Madrid, but if the capital sets the tone for the rest of the country, is this election result good or bad news for the Spanish property market in general?
Unfortunately, the PP does not have a great track record when it comes to real estate. Both in Madrid and elsewhere the party has presided over corruption, incompetence, over-development, speculation, and land-grabs in the past, whilst not sorting out squatter-friendly laws whilst they had the chance.
Nevertheless, I think the PP’s big victory in Madrid is good news, if only because the PP is likely to do less damage to the future of housing than a coalition government involving the hard-left. I’m sure the PSOE (sensible Left) on it’s own would have been fine, but the PSOE can’t win on its own, so has to form a coalition with the hard Left, like it has done in the national government, and in Barcelona.
Barcelona is a good example of what happens when the hard left get into power. Podemos affiliates running city hall led by Mayoress Ada Colau have discouraged housing development whilst defending squatters, and hard-left activists regularly vandalise property on the best streets whilst covering the city with idiotic political graffiti.
Sometimes it seems like the main plank of the hard-left’s affordable-housing policy is simply to encourage squatting.
Barcelona shows what a mess the hard-left make of housing, and the voters of Madrid rejected the parties offering them the same fate. Other regions might follow suit.