Spain is grappling with a severe housing crisis, as soaring rental costs have pushed many families to the brink of financial instability. A recent report highlighted by the central bank revealed that nearly 40% of families who rent are spending over 40% of their income on accommodation. This alarming trend has led to widespread protests across the country, with thousands expected to take to the streets on April 5, 2025, demanding government action to address housing affordability.
In Madrid, tenants like Blanca Castro are feeling the brunt of the crisis. Castro, a resident of an apartment block near the bustling Atocha railway station, faces the grim reality of a collapsing kitchen ceiling. "I have to wash my dishes in the bathtub and cook on a gas camping stove," she lamented. Residents in her building report a lack of maintenance and non-renewal of rental contracts, as landlords increasingly seek to convert long-term rentals into short-term tourist accommodations.
According to property portal Idealista, rental prices in Spain have doubled over the past decade, with an 11% increase in the last year alone. While salaries have risen by around 20% in the same period, the disparity between income and housing costs has left many Spaniards feeling hopeless. "For another home like this in this area, I'd have to pay double or more what I'm paying now," Castro stated, emphasizing the unsustainable nature of the current rental market.
In cities like Barcelona, the situation is even more dire. Five years ago, nine families were competing for each rental property; now, that number has surged to 54, with rental costs increasing by 60%. Juan Villén from Idealista noted, "The current problem is a huge imbalance between supply and demand. Demand is very good, the economy is growing a lot, but supply is dwindling very fast." The Housing Ministry estimates that Spain needs between 600,000 and one million new homes within the next four years to meet rising demand.
The crisis has prompted the central government to declare a "social emergency" and take measures to stimulate housing construction. However, the building of new homes has been hampered by high costs, a lack of available land, and a shortage of labor. In 2007, during the height of a property boom, over 600,000 homes were built in Spain. In stark contrast, just under 100,000 homes were completed in 2024.
Prime Minister Pedro Sánchez has expressed a willingness to intervene in the housing market to bring rental prices under control. At a recent event in Seville, he opened 218 low-rent flats and declared, "Spaniards want us to act... to ensure that vulture funds and speculators are not doing whatever they like." This sentiment has resonated with many citizens, leading to protests against rising rents and the impact of tourism on local housing.
Local governments have also begun to restrict the granting of tourist-flat permits in response to public outcry. Barcelona is planning to revoke licenses for all 10,000 short-term rental apartments by 2028, while the Canary Islands and Balearic Islands have seen similar measures enacted. However, critics argue that current government policies may be driving landlords away from the rental market altogether.
As public frustration mounts, the government is also considering a controversial tax of up to 100% on properties purchased by non-EU residents. This measure is intended to curb foreign investment in the housing market, which many believe exacerbates the crisis. However, the conservative opposition has labeled the government's approach as heavy-handed.
Gonzalo Álvarez from the Sindicato de Inquilinas e Inquilinos, a tenants' rights organization, believes that merely increasing the housing supply is not the solution. "There is a lack of housing because homes are being hijacked - on the one hand tourist flats, and on the other hand all the empty flats belonging to vulture funds and the banks," he argued. His organization is advocating for mandatory rent reductions and has threatened to organize a nationwide tenants' strike if the government fails to act.
In a parallel development, Spain recently ended its controversial 'golden visa' program, which allowed non-EU citizens to gain residency through property investments of €500,000 or more. This decision, announced by Prime Minister Sánchez, was made in response to the ongoing housing crisis and aims to limit the impact of foreign investors on the domestic market. The program had previously granted nearly 15,000 visas, primarily to nationals from countries such as China, Russia, and the UK.
While the government hopes that eliminating the golden visa will alleviate some pressure on the housing market, experts caution that the impact may be limited. David Felipe Echeverry Perez, a finance professor at the University of Navarra, noted, "Spain’s real estate market is very segmented... It will likely reduce price pressures at the highest end of the market, but that is not where the bulk of Spain's shortage of housing lies."
As Spain navigates this complex crisis, the government’s newly proposed 12-point plan aims to strengthen the right to housing by increasing taxes on holiday rentals and providing incentives for affordable housing development. However, the effectiveness of these measures remains to be seen, especially as the country grapples with a broader cost-of-living crisis.
In the face of these challenges, the call for action from both citizens and officials is louder than ever. As protests continue and the government seeks solutions, the future of housing in Spain hangs in the balance. Will the measures being proposed be enough to turn the tide, or will the crisis deepen further?
