Lorraine Williamson
The European Commission has warned Spain to intensify its efforts to address its growing social housing crisis. It says delays in reform are worsening access to affordable housing for low-income families and young adults across the country.
Currently, just 1.5% of homes in Spain are publicly owned and offered at social rent—far below the EU average of 9%. With demand rising and private rents increasing rapidly in urban areas, the gap between housing needs and supply is widening.
EU demands faster permits and fewer delays
Brussels is pushing for significant reform of Spain’s housing policies. It wants local and national authorities to remove red tape, fast-track permits, and modernise construction laws to speed up the development of non-market housing.
The Commission says inaction could have long-term social and economic consequences. This is particularly the case in fast-growing cities where access to housing is closely linked to labour mobility and regional development.
Government proposes €7 billion plan
In response, Prime Minister Pedro Sánchez is expected to unveil a housing investment plan at the upcoming Conference of Presidents. The proposal includes €7 billion in funding over four years, with 60% provided by the central government and the rest by regional administrations.
Funds will be used to build thousands of new protected housing units reserved for those with lower incomes. These homes will be kept off the speculative rental market and will remain classified as social housing long-term.
Creating a transparent housing market
Another part of the plan includes developing a national housing database. It would publish real-time data on rental and property prices to help track market trends and prevent unjustified rent spikes.
Officials are also considering a base price framework in high-demand areas to keep rental costs within reach for working families.
Structural issues continue to limit supply
Spain’s housing shortage is not new. Years of underbuilding, a shift toward short-term tourist lets, and a lack of skilled labour in construction have all contributed.
In areas such as Barcelona, Madrid, and Málaga, the supply of homes has failed to keep up with demand. Although some regions introduced a rent cap law, critics argue it has led many landlords to withdraw properties, reducing available housing even further.
Worker shortages add to the pressure
A major concern highlighted by the Commission is the shortage of workers in the construction sector. Over half of Spanish construction firms report serious hiring difficulties.
Without skilled labour, large-scale housing projects risk delays or cancellations. This not only affects housing delivery but also restricts people from relocating to job-rich regions—limiting growth in the national labour market.
Opposition accuses government of political motives
The opposition Partido Popular (PP) has criticised Sánchez’s plan, calling it an electoral move. However, the government insists the investment is part of a long-term strategy to reduce housing inequality and improve living conditions.
Ultimately, success will depend on cooperation between national and regional authorities. Without it, the EU warns Spain may fall further behind its neighbours in solving its housing crisis.
Spain´s rental market under severe pressure