

New figures show how a city government can choke off new-home building and renovation with wrong-headed policies, whilst rental prices explode in the wake of rent controls.
The Barcelona-city pipeline of new housing starts including renovations as measured by planning submissions (visados de obra nueva) signed by technical architects fell by 48% in 2022, reveal new figures published by Catalonia’s College of Architects. There were just 1,454 new projects submitted last year, back to levels last seen in 2015.
Barcelona-city planning submissions in 2022 were also down by 38% compared to 2019, pre-covid, confirming a deep-rooted cause specific to Barcelona city, and unrelated to the Covid pandemic. Outside of Barcelona city planning submissions rose by 32% in the metropolitan area, by 18% in the province, and by 5.3% in Catalonia, so new home building and renovation has been collapsing in the Catalan capital whilst growing all around it.
The collapse in Barcelona has been caused by a policy introduced in December 2018 by the Catalan regional government at the behest of the municipal government aimed at forcing developers to pay for affordable housing though a 30% social housing quota on all new build and renovation projects above 600 sqm, making most such projects a loss-making enterprise in Barcelona. The Association of Developers of Catalonia (APCE) says that just 52 affordable new-homes have been built as a consequence of this policy in the last four years.
According to a statement from the College of Architects, “the planning regulations drive away developers, and the lack of building land requires the administration, the sector, and society to rethink the future of the city.”
400 affordable new homes promised per year


The social housing quota has been a signature policy of Mayoress Ada Colau and her Barcelona en Comú party. Back in 2018 Colau claimed that forcing developers to dedicate 30% of new projects to social housing would lead to between 300 and 400 new affordable homes each year in Barcelona.
By February 2020 Janet Sanz, Colau’s deputy responsible for town-planning, admitted that the policy was not getting “spectacular” results but blamed the failure on other factors like municipal elections (source).
By July 2021 Sanz was talking about just 120 new affordable homes that year whilst blaming developers for the fact that “we have missed the opportunity to have 425 protected homes.” (source).
By December of 2022 the story had changed to punishing developers for trying to avoid the 30% social housing quota by renovating buildings in stages to stay below the 600 sqm rule. (source).
According to the latest information from City Hall (source), 150 new affordable homes have been created as a result of the policy in the four years since it was introduced in 2018, which is significantly higher than the 52 homes that developers say they have built.
Whatever the true figure, it’s a far cry from the 400 affordable new homes a year promised by Mayoress Colau when the policy was introduced in 2018. She claimed the policy would result in as much as 1,600 affordable new homes by now, and if 52 is the result, that’s just 3% of what was promised.
In reality the policy has been a dramatic failure that has created an insignificant amount of affordable new housing whilst cratering the supply of new homes for everyone else. In other words, no new housing for anyone in Barcelona, affordable or not.
Barcelona’s broken rental market
The same thing happened in Barcelona’s rental-housing market where the municipal government under Colau supported Catalan rent controls that led to a reduction in the supply of homes for rent, and exploding prices when the rent controls were thrown out by the courts. The latest figures for rental asking prices published by the property portal Idealista show Barcelona rents up by 25% last year, the highest increase in all Spain.


Even while in force rental controls were counterproductive argues a new study just reported in the regional paper La Vanguardia. Rent controls in Barcelona increased the price of the cheapest rentals by 13%, whilst decreasing the price of the most expensive ones by 3%, making housing more expensive for the least well-off, and cheaper for the best-off. Why implement such a counter-productive policy? As the report’s authors say “rent controls are a short-term policy with no direct cost to the government and easy to sell politically.”
Implications for investors in Barcelona
Disastrous housing policies imposed by the regional and municipal governments on Barcelona have implications for anyone considering investing in real estate in the Catalan capital.
Rent controls and the social housing quota have reduced investment and increased the scarcity of housing in Barcelona, especially new homes and rental housing. This will put even more upward pressure on house prices, especially new homes, and make voters even more unhappy about the high cost of housing.
Municipal elections in May might remove Colau from the Mayor’s office but her eight years in power have done long-term damage to Barcelona’s reputation as a safe place to invest in residential development and rental housing (she would argue she has just brought speculators to heel). It is not clears that any of the realistic alternatives to Colau understand the challenge.
Small investors and developers will continue to work on projects below the 600 sqm line, but bigger projects in any quantity that could help ease Barcelona’s housing crisis are unlikely for the foreseeable future. All this suggests that new housing in Barcelona will be scarce for years to come, and “affordable” new housing will be non-existent.


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