MADRID – An agreement on a new housing law in Spain has already caused tension within the current government coalition. After another four months of delay, the key points for attention for this new law have now been defined.
Former Podemos leader Pablo Iglesias, wanted a better housing law as he left national politics to run for the Madrid presidency. In the new law, Iglesias wanted to limit rents in Spanish cities. Whereas Sánchez preferred to keep rents under control by providing subsidies.
The current outcome is in the middle ground. This means Sánchez sticks to his original plan, but makes an exception for the so-called ‘zonas tensionadas’. These are areas where rents have continued to rise in recent years. And where the average housing costs more than 30% of the average income. As Iglesias initially wanted, the new law in these areas will freeze rents.
Fear of black rental market
The details are yet to be negotiated further. Therefore, it is uncertain whether or not rents may be increased by the annual price indexation. The socialists do not like a general freeze in the rental market. Moreover, they are afraid this will reduce the supply and create a private rental market. In line with the Prime Minister’s wish, the Ministry of Transport, Mobility and Urban Agenda prefers to regulate the rental market by providing subsidies.
In the new housing law, the definition of what is and what is not a ‘zona tensionada’ will be crucial. The granting of this status is the responsibility of a bilateral government commission, in collaboration with the relevant autonomous regions and municipalities. The status is awarded to an urban area for a period of three years.
Catalan housing law
In Catalonia, a new housing law came into effect at the end of last year. It meant rents in 60 municipalities of the region were frozen. However, earlier this week it was announced the central government is appealing this Catalan law. After all, the new national law will partly provide for the freezing of rents. To prevent this from being perceived as a hostile gesture, the government is waiving the requirement to invalidate the Catalan law with immediate effect.