Spain’s left-wing government will introduce tougher rental regulations and curb medium-term leases to rein in surging rents and curb price abuses under a decree set to be approved in the coming weeks, Prime Minister Pedro Sánchez said on Monday.
One of the world’s most popular tourist destinations, Spain is grappling with an acute housing shortage worsened by the tourism boom, and has seen widespread protests in recent years over rapidly rising housing costs.
“We will continue intervening in the rental market,” Sánchez said during an event to mark the start of works at the country’s largest public housing project.
The long-stalled Campamento project will redevelop a former military site in western Madrid into 10,700 state-owned affordable homes.
Sánchez said the decree will also offer a 100% personal income tax rebate to landlords who renew leases without increasing rents.
In addition, the measures would also cap the total cost of rented rooms at the equivalent price of an entire apartment to curb room-by-room rentals, and extend rent controls in designated high-pressure areas.
Sánchez also said the government would tighten rules for seasonal rental contracts and impose penalties when they are used as a substitute for long-term leases.
Homeowners’ associations and experts argue that existing regulations encourage short-term leasing at the expense of long-term rentals, Reuters news agency reports.
However, most housing measures must be implemented by regional authorities, many of which are governed by the opposition and may be unwilling to fully enforce them.
Even so, affluent northeastern Catalonia has introduced caps on seasonal and room rents, and several cities, including Madrid, have moved to restrict tourist apartment rentals.
Average rents in Spain have doubled over the past decade, far outstripping wage growth.
The Bank of Spain reports a housing shortfall of 500,000 homes, with official figures showing that only around 120,000 new homes are built annually, just one-sixth of the pre-2008 financial crisis levels.