The Spanish government is moving ahead with new, tougher regulation of the housing market, seeking to curb the surge in rents that has generated strong social pressure in recent years. According to Reuters, Prime Minister Pedro Sánchez announced that in the coming weeks a royal decree will be approved setting limits on room rentals as well as on seasonal and mid-term leases.
The Campamento project, which has already been delayed, will transform a former military facility in western Madrid into 10,700 state-owned, affordable housing units.
Sánchez said the decree will include a 100% personal income tax relief for landlords who renew leases without increasing rents.
It will also set a cap on the combined rent of rooms at the level of a full apartment, aiming to rein in room rents and apply rent controls in designated high-pressure areas.
In addition, the government will tighten the rules for seasonal rental contracts and introduce penalties for their use as a substitute for long-term leases, Sánchez said.
Homeowners’ associations and experts argue that current regulations favor short-term rentals over long-term leases. However, most housing measures must be implemented by regional governments, many of which are run by the opposition and may not comply.
Nevertheless, wealthy northeastern Catalonia has introduced caps on seasonal rentals and room rents, and several cities, including Madrid, have restricted tourist apartment rentals.
Average rent in Spain has doubled over the past decade, far outpacing wage growth. According to the Bank of Spain, there is a housing shortage of 500,000 homes, while official data show that only about 120,000 new homes are built each year—one sixth of the levels seen before the 2008 financial crisis.