How Spain’s rent control is failing locals

A one-year-old law in Spain meant to control soaring home rental prices has had the opposite effect: Prices have continued to climb. It’s part of a trend going back a couple of decades now. But this year alone, in some cities, rents have jumped by more than 20%. Experts – and renters – say finding an affordable place to live is now next to impossible. The World’s Gerry Hadden reports from Barcelona on why Spain’s rent control law has backfired.

The World

Six years ago, Nuria Vidal and her two kids suddenly had to pack their things and find a new place to live.

“My rental agreement expired, and the landlord raised the new rent by 50%,” she said. “From around $1,100 to $1,600, from one day to the next.”

Nuria Vidal is being forced to move out of her apartment building after she and other residents received an unspecified eviction notice from property management. Renters later found out they were being evicted so their homes could be turned into short-term rentals instead.Gerry Hadden/The World

Vidal eventually found a new place in a quiet city neighborhood. It’s a spacious, sunny three-bedroom apartment in an early 20th-century townhouse. It’s perfect, and to Vidal, it seems as if she could live there pretty much forever.

But now, she’s packing up, again — and this time, it isn’t because the owner is jacking up the price.

“They sent us eviction notices by fax as our contracts were ending, without saying why,” she said. “But later, we learned that they’re converting the apartments into short-term rentals for tourists. We’ve all got to move out.”

The World contacted the property management company that manages the building for an interview but received no response.

“This switch from long-term renters to short-stay tourists can be painful for tenants, but it’s perfectly legal — and much more lucrative for landlords,” said Francisco Iñareta, spokesman for Idealista, southern Europe’s largest online property portal. 

Renting to tourists really took off a year ago, Iñareta said, when the government put price caps on long-term rentals yet left the short-term rental biz largely unregulated.

“The supply of long-term rental flats has dropped 15% since the law was passed,  While the short-term supply grew by 60%. It’s just perverse.”

Francisco Iñareta, spokesman for Idealista, southern Europe’s largest online property portal

“The supply of long-term rental flats has dropped 15% since the law was passed, while the short-term supply grew by 60%. It’s just perverse,” Iñareta said.

In Barcelona, nearly a third of all rental apartments are now set aside for weekend visitors from Warsaw or Parisians passing through on holiday. 

For each flat that comes on the market, Iñareta said that there are now 40 people applying. A year ago, the average was 27 applicants per flat, according to a study commissioned by Idealista.

Lack of housing, high costs of living and other local stressors have led to protests against mass tourism across Spain recently as the country braces for a record 100 million visitors by the year’s end.

People march during a mass demonstration against over tourism which affects the local population with inaccessible housing among other things in Santa Cruz de Tenerife, Spain, April 20, 2024. The protests are taking place this Saturday in various Canary Islands. Banner reads “Canary Islands have limits.”Miguel Velasco Almendral/AP

“This is all the result of Spain aggressively promoting tourism for decades. It’s too late to stuff that genie back in the bottle,” said Iñareta, whose company, Idealista, profits off of the real estate market.

He said a solution to the problem would be to build more housing.

But a few property owners in Barcelona see things differently. 

Sisters Estela Guitart and Nausica Guitart recently inherited their parents’ flat. They plan to rent it but not with an eye on profits, Nausica Guitart said.

Sisters Estela Guitart and Nausica Guitart plan to rent out the flat they inherited from their parents at an affordable rate, pricing their flat below the official cap.Gerry Hadden/The World

“Rental prices have skyrocketed so much that we’re taking an ethical approach as landlords. Rent should be something people can handle,” she said. If landlords would just stop with the “get rich overnight” mentality, her sister Estela Guitart added,” we wouldn’t need rental control laws to begin with.”

In fact, the Guitart sisters are pricing their flat below the official cap. And who is their new tenant? Vidal, the mother of two who was evicted from her old apartment to make room for tourists.

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