Catalonia lowers the number of owned urban properties from “more than 10” to “5 or more” to consider that an owner is a large holder in the new Housing law, as announced this Wednesday by the Regional Minister of Territories, Ester Capella, in a conference press. This category will imply that it has to adjust to a price reference index, which will cap the contracts in case of renting in an area declared stressed.
The measure comes after studying and collecting the allegations to the Catalan memory of the Housing Law that so requested. It is argued that based on the “concentration and structure of property in Catalonia” it is the right thing to do to “significantly increase the number of rental homes subject” to the law. 7.7% of the homes for rent are owned by owners who are between 6 and 10 and were left out with the previous level, it is detailed.
Thus, a large holder will be that individual or legal entity that owns 5 or more urban properties for residential use or a constructed area of ??more than 1,500 square meters for residential use, excluding garages and storage rooms. “It puts a lot more housing on the affordable housing market,” Capella said.
In June Territori already said that it was studying this reduction. Capella explained that developers whose “object is the promotion of social protection properties for rent” will be excluded, although those who are dedicated to selling homes will not.
These are the only two allegations, out of almost 50 received, that have modified the initial report prepared by the Government in June and that figures at 140 municipalities that are stressed areas, where prior approval from Madrid, the rent limitation that it includes must be applied the law. 6.2 million people reside in these municipalities, 81% of the population. The Generalitat assures that the objective is “to be able to contain rental income and guarantee fundamental access to housing.”
In the areas declared stressed, the rent of the new contracts may not exceed that of the last one in force in the previous five years (there will be certain exceptions but they will take the previous rent as starting point); and in the case of being a large holder, it may not exceed a price reference index that will be prepared by the INE and before December 31, 2024. The validity of an area declared stressed is 3 years, extendable by annual payments.
After the modifications, the final report has been signed and will be sent “in the next few days” to the Ministry of Transport, Mobility and Urban Agenda for its approval. Capella assures that the Housing law could enter into force in Catalonia in August. “Catalonia has put the accelerator to guarantee the right to housing because we are in an emergency situation and it is up to us to respond to the needs of the citizenry”, Capella stated.
The minister has detailed that in total there have been 46 allegations. Some have been dismissed regarding the impossibility of applying the law in Catalonia, those that requested economic compensation from the owners or those that questioned the data used to declare the stressed areas, which is done based on the evolution of prices or the load of the mortgage or rent on wages.
There were also requests not to touch the figures for large owners. The real estate sector rejects the application of the law, alleging that it will not take effect and that it will lead to a drop in supply and an increase in prices. The reduction has been celebrated by the Union of Llogateres, stating that it will allow there to be “even more” mandatory decreases in the rental price. The association requests that the Government approve “immediately” the stressed areas for the law to enter into force.
