Mark Stücklin
The controversial housing law passed in May has done the opposite of what it was intended to do in record time.
If you search online for a house to rent long-term in Barcelona or Madrid you will find thin pickings as 70pc to 80pc of listings are offered fully-furnished and strictly on a mid-term basis, which means no less than a month, and no longer than a year in broad terms.
Before the Housing Law was rushed onto the books in time for local elections last May to win votes for the leftist government, which it failed to do, the balance was the other way around: long-term rental listings were two-thirds or more, whilst mid-term rentals were between a third and a fifth of the market.
The Housing Law punishes landlords with new costs and restrictions whilst protecting tenants from higher prices and eviction in the case of non-payment, and generally tilts the playing field against landlords and investors. Unsurprisingly to everyone but the Housing Law’s backers, the new regulations have led to an exodus from the long-term rental sector, pushing down the supply and lifting rental prices. Though it does benefit sitting tenants, the new law makes housing less accessible and affordable for everyone else.
According to one rental agent quoted in the local press, the new law has dramatically reduced the number of rental homes on the market and created a “stampede” of investors and developers out of the long-term rental market.
“One can’t say on the one hand that there is not enough rental housing and that it needs to be increased whilst on the other hand punishing the only ones who can increase the supply, and driving them out of the sector,” says José Ramón Zurdo, boss of the ANA rental agency, in comments about government housing policy to the press.
A new report published by Spain’s National Federation of Real Estate Associations (FAI) reveals that the total rental supply has declined by 30pc since the law was introduced, whilst demand has risen by 11pc over the same period. Landlords are getting more picky about who they will rent to, making life even more difficult for people without a blue-chip profile.
The collapse in the supply of long-term rentals is a disaster for people who cannot afford to buy, or who, like expats posted to work in Spain, need a place to live for several years or more in cities like Barcelona and Madrid. Even if you can afford to pay city-centre rents, you won’t find much on the market to satisfy long-term demand. In the whole of Barcelona today there are just 630 properties for rent unfurnished on a long-term basis, in a city of 1.6m people.
