The first state housing law of democracy was closed yesterday after more than two years of intense talks. The agreement between the Government and its partners ERC and EH Bildu foresees that increases in all rental contracts cannot exceed 3% during 2024 (in 2023 the limit of 2%) is in force and that from 2025 are linked to the evolution of the CPI (then the Government hopes to have curbed inflation) through a reference index that will be drawn up by the National Institute of Statistics (INE).
The Housing Law will also enable the autonomous communities to consider a “large owner” of homes who has five or more properties (until now the reference was ten) in the same tense market area. These areas can include a census district, a neighborhood, a municipality, or an entire province. For an area to be declared stressed it must meet one of these two conditions: that the average burden of the cost of the mortgage or rent, plus expenses and basic supplies, exceeds 30% of the average income, or that the price of buying or renting housing has increased at least three points above the CPI in the previous five years. The declaration of tense areas will be the responsibility of the autonomous communities and will last for three years, which can be reviewed. The Government agreed to introduce an amendment to consider both natural and legal persons as “large owners”.
Once a community declares an area as tense, the rents of large owners will be limited to a reference index set by the Government. In the case of small owners, of less than five homes, in tense areas their rents will also be intervened. Whenever the autonomy declares it, they will have the obligation to freeze prices or reduce them in exchange for incentives in the IRPF. Negotiators included a clause at the last minute to prevent owners from taking their properties off the market and then re-listing them in an attempt to save the cap. The new contracts must be applied in the same terms as those of the previous tenants.
While the 3% limitation on rent increases in 2024 and the CPI from 2025 is mandatory throughout Spain, the measures that will affect the stressed market areas will only be effective within the autonomous regions and municipalities where their governments decide to apply them. The agreement reached yesterday will enable the Catalan Housing Law, currently appealed before the TC.
One of the areas that could be declared tense is Barcelona, ​​where a large number of owners would be affected by the new regulations. Specifically, more than 8,700 would be considered large holders and, therefore, particularly affected.
To find out the new composition of Barcelona’s rental housing stock, the report of the Metropolitan Housing Observatory, dependent on the city council, is very useful. It provides an x-ray of how many leases there are with the use of housing (permanent and regular) through tenants who have deposited a deposit on January 1, 2021, which are 76.5% of the total. In this sense, in the province of Barcelona there were at that time more than 272,000 owners with more than 500,000 homes for rent. The owners of more than five properties in the province of Barcelona were 8,710, who had 162,744 rental properties. In other words, 3.2% of the owners accumulated a third of the rental houses.
The Housing Law also establishes that the costs and fees of real estate companies will always be borne by the owner and establishes a reinforced control of evictions, which must be with a date and time, and in which the autonomous communities must intervene .
Neither landlords nor landlords like the outcome of the negotiations. From different portals, such as Idealista, they have criticized the intervention and have focused on the lack of supply. The Rent Negotiating Agency considers that the law attacks the owners, and the president of the CEOE, Antonio Garamendi, has said that he is concerned that “the right to private property” could be invaded. The Union of L logateres and the PAH, for their part, have called the rule a “farce”.
