In May 2023, we published an article about The rental laws in Spain that came into effect that month. The Spanish rent law is designed to moderate rent increases and allow affordable rent for the residents of Spain while focusing on the areas of demand. As part of the article, we also presented the arguments of the opponents of the law, who claimed that the law would cause the opposite result. Now, more than six months later, we will examine the law's failure and its expected changes.
In short, the main tenets of the rent law included limiting the amount of rent (in areas of demand) in order to make it easier for apartment renters. Imposing new taxes on apartment owners (multiple property owners) intended to be used by the government to finance public housing programs. At the same time, the law strengthened the position of renters vis-a-vis landlords, and a public fund was established to help finance public housing.
It didn't take long until the impact of the rental laws on the apartment owners became clear after they saw it as a severe violation of their rights and profits. Many apartment owners have decided not to rent their apartments long-term and to switch to medium-term leases (more than 32 days and less than 11 months) because the rental law does not apply to these contracts.
It is important to know that the rental laws did not emerge on one bright day; they were forged after a long process that began in 2020 with the publication of the rental laws in Barcelona that were canceled at the local level but enacted later. As mentioned at the national level, it must be assumed that the law's effects began to develop with the precedent law in Barcelona already that year.
The consequences of the mass flight from the long-term rental market since 2020
A significant reduction in the supply of apartments for rent.
A sharp increase in rental prices
There are many difficulties for young families and couples to find an apartment to rent reasonably.
Increasing the phenomenon of "ghost apartments" - empty and unoccupied apartments.
In light of the changes that have taken place in the market and the trend toward worsening the situation of apartment renters, it was recently announced that the government has established a working group whose purpose is to study the medium-term rental market and formulate new regulations. According to the publications, the goal is to balance protecting the tenants and creating attractive conditions for investors while returning the rental housing market to a stable path.
