One month after rent control came into force, the Generalitat announced yesterday that it will double the number of municipalities where it applies. The Department of Territory has started the procedures to add 131 towns to the list of stressed areas, which will leave the total at 271 localities, home to more than seven million people, 90% of the Catalan population. For its part, the Central Government is studying measures to try to encourage other autonomous communities to follow the example of Catalonia and adhere to the norm.
The Generalitat will now apply the measure in all municipalities with more than 2,000 inhabitants that comply with the requirements set by the state law for the right to housing. That is, that residents spend more than 30% of their income to pay the rent or the mortgage, including basic expenses and supplies, or that the rental or purchase price in the locality has experienced a cumulative increase of at least three points above the CPI in the last five years.
Municipalities such as Bagà, Bellver de Cerdanya, Cadaqués, Sant de Calonge, Castell-Platja d’Aro, Móra d’Ebre, Roses, Viladecavalls or Vielha have been added to the new list. Many of the towns that will be incorporated are tourist areas. In the initial list, the regulations mainly affected the towns with the most inhabitants of the community.
In all these areas, the same measures that have been in force for the last month will apply. In other words, the rent of the new contracts cannot exceed the price of the last contract in force for the last five years, once the annual contract update clause has been applied. In the case of large tenants (owners of five or more properties located in stressed areas), the rent cannot be higher than the reference index.
Territory justified the review of the criteria for applying the measure due to the general increase in the cost of housing in recent years in Catalonia, almost always well above household income, and the upward trend in rental prices, despite the recent application of income withholding.
The processing will follow the same procedure as the first declaration: a public information period of twenty days is opened so that administrations, entities and individuals can present allegations. Once completed, all questions will be analyzed and answered and the final resolution will be notified to the Ministry of Housing and Urban Agenda so that the public can enter into force.
Just yesterday, Idealista, Spain’s largest real estate portal, took stock of the enforcement of the law in which it noted that the rental stock fell by 13%, while prices rose by 4, 3% “The price control will only aggravate the already desperate situation of thousands of Catalan families, who will see how in the coming months the difficulty and competition to access housing will increase”, said Idealista’s spokesman, Francisco Iñareta.
The Ministry of Housing is trying to get more autonomous communities to join the fixing of stressed areas, but it has met with the veto of the PP. To try to overcome this opposition, the Spanish Government is looking for formulas to provide additional funding to territories that do apply state regulations. The department led by Isabel Rodríguez analyzes article 18.5 of the Housing Law, which states that the State may activate “specific financing measures for this territorial area that could favor the containment or reduction of rental or sale prices” .
Currently, small home owners who rent their property at a below-market price can benefit from a personal income tax rebate of up to 90%. This tax aid is already in force in the first 140 municipalities of Catalonia and will be in force in the 131 new localities.
