The average income of the homemade spanish doubles that of the tenants. Even if their rent were subtracted, landlords would still be the segment of the population with the highest income. These are the main conclusions of the report. How will rent control affect landlords? Prepared by Miguel Martínez, professor of sociology at the University of Uppsala (Sweden), Lorenzo Vidal, postdoctoral researcher at the same university and Javier Gil, postdoctoral researcher in housing at the University of the Balearic Islands (UIB).
Using data from the Living Conditions Survey published by the INE, the researchers extract average and median income for each type of household —landlord, tenant and owner who does not receive rental income— to analyze how they are distributed and in which part of the social ladder each one is located. Stay-at-home households (receiving rental income) have a average income of 46,725 euros per yearcompared to tenants, whose average income is at 22,183 euros.
Viewed another way: the majority of landlords are among the richest households in Spain, while the majority of tenants are among the poorest. More than half of the households have incomes above 40,000 euros per year. AND almost 40% of tenants are below 15,000 euros per year.
The authors acknowledge that the data in this survey is not perfect—for example, the rental income received by landlords also includes garages or lots, and only rented homes are taken into account, not their assets in the form of second or third residences. – and the real inequality could be much more accentuated.
The report, published in collaboration with The Cooperative Hydra“part of a larger academic article we are writing in which we try to analyze the speeches that are repeated continuously to stop legislative advances that benefit tenants”, they explain to THE SPANISH NEWSPAPER, from the Iberian Press group. “There are three main discourses: one, that they are counterproductive measures because in the end the landlords would withdraw their homes from the market. Another, that these measures violate the right to private property. And the third, that of the vulnerable landlord. It is an idea that is reflected not only in the press, but also in parliamentary debates and legal texts.”
By “vulnerable landlord” the authors refer to the figure of the “landlord who supplements his pension” or what “needs to collect rent to live.” And to demonstrate to what extent the concept has permeated, they refer to the decree of urgent measures due to the pandemic published by the Government on March 31, 2020, which, among other things, established moratoriums on rental payments.
On the basis that “85 % of housing leases are owned by a natural person, small owner”the Government created measures to protect the “most vulnerable groups” (tenants) but guaranteeing “a balance” that would prevent “the vulnerability of the tenants is transferred to the landlords, especially to those for whom rental income may be essential.”
“The topic that is used the most is that of the retired person who supplements his modest pension with rental income,” they write. “Consequently, the debate has continued with the distinction between ‘big’ and ‘small’ holders in order to limit the regulation of rents affecting only the former. However, with the available data, it is concluded that landlords are a relatively wealthy minority of the population and that the figure of the ‘vulnerable landlord’ is residual”.
Few and high income
Before getting into who the landlords are and how much money they have, the researchers are trying to figure out how many there are. In Spain there is, according to data from the Tax Agency, about two million rented homes. What is not available is data on the property structure, that is to say: how many homes each landlord rents. The best approximation is that of the Barcelona Metropolitan Housing Observatory (OHMB), which in a detailed study on the subject concluded that 36% of rental flats in Barcelona belonged to large owners.
According to these data, the majority of owners (79%) only have a home for rent, but the remaining minority (21%) accumulates 60% of the total park. There are no similar data for the rest of Spain, although from CIS surveys and Treasury data it can be concluded that landlords are a minority of the population. “Between 3% and 9% of households”, the authors point out. To give another piece of information: the number of taxpayers who benefit from the tax credit for putting up a home for rent is 1.3 million, barely 6.8% of the total.
“The first thing we try is to deny the concept of ‘individuals’. It is loaded with connotations. If you let yourself be carried away by political and media discourse, it seems that the landlords are people like you: that he is also in a precarious financial situation and that he needs the rent to make ends meet. In any case, the vulnerable people are the tenants and the rental market is a source of inequality”they continue.
The landlords, as the researcher Carlos Delclós pointed out in an interview in this medium, do not become super-rich with the rent. But the extra income they receive is enough to take a class leap. “It depends on how you interpret rich and poor. But the difference between the median income of landlords and renters is considerable. They’re not capitalists with cigars and hats, but they are twice as rich as the people who pay their rent.” Vidal says.
According to the extracted data, only 6.5% of homestead households would be at risk of poverty, compared to 36% of tenant households. “This figure represents a mere 0.6% of the total number of households in the entire country,” they point out.
Asked if age influences this inequality, the researchers answer that it does. “It’s a mixture of age and class. There is a temporal factor in how this heritage was obtained and from which people could obtain it. For years ownership has been promoted, both through direct and indirect subsidies and through a favorable macroeconomic context. The 2008 crisis marked a change in dynamics and subsequent generations have had it more difficult”, continues Vidal. “There is the dimension of age, but cannot be separated from the class issue or the immigration issue”adds Martinez.
housing law
Studying who the “small landlords” are and what income they manage allows researchers to conclude that there are hardly any “vulnerable landlords” and that landlords do not depend on their rents to live.
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For this reason, they understand that “in order for there to be effective price regulation, it must be for the entire housing stock.” The current bill only applies price limits to large owners (more than ten rental homes). “In addition, if you distinguish between big and small, you open the ban to all kinds of picaresque. There is no rental regulation in the world that distinguishes between big and small. It is a truly Iberian productclosely linked to local history”, they clarify.
Why, then, if the landlords are not that many and are not poor at all, does the government try to protect them? The answer, the authors consider, lies in culture. “Because the culture of ownership has been promoted so much, some kind of social empathy is generated towards the landlord even if you are not. Because perhaps you have a second residence, or something in the town, which you have ever thought of making a profit…”, they conclude. “With this culture, the vision of the landlord’s world is amplified. But the reality is that, in percentage, there are many less than what is believed“.