The Controversial Housing Law Passed Ahead Of The Elections

As the government seeks to strengthen the right to affordable housing, Spanish lawmakers approved a new Housing Law on Thursday aimed at capping soaring rents and addressing dire social housing shortages

The new Housing law, which was approved by a vote of 176 to 167 with one abstention in the 350-seat chamber, seeks to limit rent increases, increase assistance in high-demand areas, strengthen protection for those facing eviction, and penalise landlords who leave properties empty.It will now go before the Senate before returning to Congress for a final vote, likely in mid-May.

The bill, dubbed the “first-ever housing law” since Spain’s return to democracy in 1975 by Prime Minister Pedro Sanchez, is part of a reform promised to Brussels in exchange for EU recovery funds.

“We’re going to change the paradigm with this housing law… and the push we’re giving to social housing in the coming years, so what is today a luxury will become a basic resource for young people,” Sanchez said outside parliament.

Spain’s left-wing government wants to pass the bill before regional and local elections on May 28. According to the government, the Housing law aims to meet the needs of those who are unable to afford housing while also limiting property speculation.

“Spain has a huge and serious housing problem,” Sanchez said last week, adding that average rents have risen 45 percent between 2014 and 2021, making housing “unattainable for many, particularly young people.”

Soaring rents have sparked heated debate in a country still reeling from the collapse of its housing sector in the aftermath of the 2008 financial crisis, when thousands of families were evicted for failing to pay their mortgages.

Podemos, Sanchez’s hardline left-wing junior coalition partner, hailed the move as putting an end to years of property speculation.

“Since the property bubble burst, banks and vulture funds have had free rein to do exactly what they wanted… that is now all over,” the party said on social media.

Sanchez announced plans to add 113,000 homes to Spain’s depleted social housing stock ahead of Thursday’s vote.

However, the right-wing opposition Popular Party (PP) slammed the move, claiming it failed to address long-term housing issues.

“A fantastic opportunity for squatters,” the PP said, criticising the bill for making evictions “harder and slower,” claiming that squatting had “risen by 50% in recent years.”

Rent increases will be decoupled from the consumer price index and permanently capped at 3% in 2024, with a new index to be established by 2025, according to the new housing law.

It will allow regional governments to designate neighbourhoods as “stressed areas,” where particularly high rents are driving out tenants, and to cap rental prices.

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The text penalises landlords who own more than ten properties – or five in high-stress areas – for leaving homes empty. It also requires them to notify tenants facing eviction of the exact date and time they must leave, as well as to extend the grace period for vulnerable tenants.

However, the Spanish tourism association Exceltur warned that capping rents in high-demand areas could backfire.

“It could end up exacerbating the problem by providing a strong incentive to transfer properties from the residential market to tourist rentals where there are no ceilings,” the report said.

Although the government has prioritised affordable housing, Sanchez admitted that more was needed to address the crisis in a country with one of the lowest percentages of social housing in the EU.

“We know that this law is insufficient, which is why we need to increase the supply of public housing from the pitiful 3% of total housing stock to the 20% of the most advanced countries,” he said.

More social housing, according to experts, is desperately needed. How will the new Housing law affect the current situation is hard to tell.

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