The agreement on the new housing law reached by the PSOE-Unidas Podemos coalition government with its allies Esquerra Republicana de Catalunya (ERC) and EH Bildu constitutes an important step to respond to the social problem What has become of the high cost of access to housing in some Spanish urban and tourist areas. The average price of renting a flat in Barcelona has stood at 1,066 euros per monthaccording to Incasòl data for the third quarter of 2022. This means an unaffordable price for the vast majority of young people and for many familiessince it is equivalent to the entire monthly gross minimum wage.
The temporary caps on rent increases and in contract renewal in stressed areas and the creation of a future housing index more stable and lower than inflation may help to curb the current upward spiral. But the effectiveness of these caps should be contrasted with daily reality, given the risk thatand may lead to a withdrawal of the offer of rental flats from the market or generate a diversion of the offer towards temporary rentals less than one year, which seem to have been exempted from these limits in the agreed law. The tax credits in the income tax provided for small owners in stressed areas can contribute to moderate the rental price, if they are properly conditioned. Another point to highlight in the agreement is the incorporation of protection measures against evictionssuch as mandatory access to out-of-court settlement procedures for vulnerable people.
All these tools are aimed at alleviating the problem of access to housing, without forgetting that the essential action to combat excessive rental prices in large urban areas is to carry out a huge public investment in the construction of social rental housingto achieve a situation comparable to that of other countries of the European Union (EU). The social housing stock in Spain is tiny: 2.5% of total main dwellings, compared to 30% in the Netherlands, 24% in Austria, 20.9% in Denmark, 19% in Sweden and 16.8% in France , according to official data. Public investment in social housing has been neglected in recent decades, even reaching privatize part of the existing public housing stockdue to the enormous political influence of real estate developers in Spain at the state, regional and municipal level.
The banking crisis was an opportunity wasted by the PP government to achieve a park of social housing comparable to its European partners, taking advantage of the properties of the failed operations that were in the hands of the banks and that passed to form part of the Sareb portfolio. Now the agreement on the new housing law can become a important electoral asset in the municipal and regional elections in May for the PSOE, Podemos, ERC and Bildu, if they manage to quickly complete their parliamentary process.