Recent government interventions in the residential property market will make the existing housing crisis worse, argues the influential Association of Balearic National and International Real Estate Agents (ABINI).
Key Concerns:
- Ineffectiveness of Existing Legislation: ABINI criticises the government’s track record on housing, citing the lack of a concrete Land Law and the detrimental effects of the Housing Law, which has restricted the market, driving up rental prices and reducing supply.
- Bureaucracy without Solutions: The newly announced Tourist and Seasonal Apartment Registry is deemed bureaucratic and ineffective. ABINI argues that it only adds administrative burdens without addressing the core issues. Hans Lenz, president of ABINI, states that, “to date, the supply of rental housing in the Balearic Islands has fallen by 30%, while prices have increased by 25% since the entry into force of the Housing Law.”
- Unenforceable Regulations: ABINI points to the existing failure to control illegal vacation rentals, casting doubt on the effectiveness of similar regulations for the wider rental market. They highlight the lack of guarantees that the new measures will improve the situation and anticipate further non-compliance from landlords.
- Unrealistic Rental Aid: The €250 rental aid for young people is criticised for its unrealistic limits (€600/month for apartments, €900 with regional adjustments, or €300 for rooms) which do not reflect the market reality in Palma. The long waiting times for aid disbursement (up to two years) further undermine its effectiveness.
- Lack of Public-Private Collaboration: ABINI criticises the government for not supporting the urgent approval of the Balearic Law on Urgent Measures in Housing, which threatens 4,000 affordable housing units for residents. They call for the release of public land and collaboration with the private sector to build social and affordable housing.
Case Study: Son Busquets
The abandoned Son Busquets project in Mallorca is cited as a prime example of ineffective public land management and lack of inter-administrative collaboration. This decades-long stalled project could have alleviated the housing problem, highlighting the detrimental consequences of inaction. Lenz emphasises the need for genuine collaboration: “We ask that there be real collaboration between the Central Government and the Regional Government so that this emergency measure and this housing for residents exists. Everything else that is being tried right now to cover up past mistakes will not have any positive effect but quite the opposite, more price increases and more defaults.”
ABINI’s Call for Action:
ABINI urges the government to adopt pragmatic solutions, including:
- Collaboration with the Private Sector: To promote the construction of social and affordable housing.
- Adapting Regulations to Local Realities: Ensuring that policies are tailored to the specific challenges faced in the Balearic Islands.
- Urgently Approving the Balearic Law on Urgent Measures in Housing: Protecting 4,000 affordable housing units for residents.
ABINI’s statement paints a bleak picture of the housing situation in the Balearic Islands. They argue that the government’s recent measures are ineffective, bureaucratic, and fail to address the core issues driving the crisis. They call for urgent action, emphasising collaboration, practicality, and a focus on local needs to reverse the trend of shrinking housing supply and escalating prices.
Statement by Hans Lenz, President of ABINI
Within a narrative of the wealthy landlord vs. the poor tenant, Pedro Sánchez’s government announced yesterday the creation of a registry for seasonal rentals and vacation rentals. In the Balearic Islands, vacation rentals have been managed and controlled for a long time, and what was lacking were control measures and real fines for landlords, something that is now being implemented. As for temporary rentals, the government is trying to cover up the mistakes of the 2023 Housing Law, which resulted in a 25% increase in prices and a 30% reduction in supply. In other words, it achieved the opposite of what was intended.
A registry for temporary rentals, in which the registrars have additional work that they did not have until now (meaning more bureaucracy), and where rental contracts are monitored after the fact, will not have the effect that is being announced. Furthermore, it will create more confusion, price increases, and non-compliance by landlords, who already feel very cornered in trying to comply with the current legislation.
Therefore, what the Balearic Islands need is affordable housing for residents, and what Pedro Sánchez’s government should be doing is facilitating the availability of this housing instead of blocking it, as it is currently doing with the 4,000 homes in the queue due to the Ministry of Housing’s efforts to claim that the Balearic Islands’ emergency housing measures law is unconstitutional.
Therefore, let’s be serious: let’s get the Son Busquets project underway, which has been stalled for decades, and truly have collaboration between the central government and the Balearic government so that this emergency measure—housing for residents—can actually exist. Everything else that is currently being done to cover up past mistakes will have no positive effect. In fact, we expect the opposite: further price increases and more non-compliance.