“Sánchez’s decrees do not tackle the problem. In fact, they are making the housing crisis worse.” Says Galindo

“The decrees resubmitted by the Spanish government do not address the problem at all. In many respects, they do exactly the opposite: they add to the scarcity in the long-term rental market”, Jorge Galindo, a sociologist specialising in public policy and director of the Esade Centre for Economic Policy (EsadeEcPol), tells Il Foglio, commenting on the two housing decrees rejected on Friday 2 October by Congress and re-approved on Tuesday following the dissolution of Parliament (now that Parliament has been dissolved, the Permanent Deputation will have to ratify them). Like their predecessors, they extend expiring contracts by up to two years, cap rent increases, suspend evictions of vulnerable households and provide for the automatic renewal of contracts.

“We published an assessment of rent controls in Catalonia, and the supply of homes has fallen. I have no reason to believe that these decrees will have a different effect,” explains Galindo. According to the study, published in 2023, the Catalan law of 2020 imposing rent caps reduced the number of rental contracts signed by around 10 per cent. “We need measures that, in the long term, enable the construction of new homes and, in the short term, encourage existing properties to enter the rental market. The decrees do not achieve this; indeed, they may discourage supply,” adds the sociologist. And an initial indication of this already emerged during the week of the debate on the first decrees, as examined by Galindo and Carles Gómez Llabrés in an EsadeEcPol analysis published on Tuesday. Between 29 September and 5 October, long-term rental listings on the Idealista portal fell in all ten of Spain’s most populous cities: by 12.5 per cent in Murcia and 9.2 per cent in Madrid, whilst in four other major cities the figure was 6 per cent. These figures are consistent with a pre-emptive withdrawal of supply.

To explain the reasons behind the Spanish housing crisis, Galindo begins with the property bubble of the 2000s: “For about a decade, thanks to cheap credit, we built twice as many homes as there were new households being formed. With the 2008 crisis, however, the sector was devastated and lost more than a million jobs. Unemployment then rose to 25 per cent around 2012, demand plummeted and, for around seven years, the market absorbed the surplus homes, with prices falling by between 20 and 30 per cent”. He then adds: “But the main problem was the regulations that, between 2010 and 2020 – when demand was low and housing was not a political priority – we continued to introduce at local, regional and national levels: an additional landscape assessment for every new town planning scheme, the possibility for anyone to block a project by contesting a minor aspect of it, environmental requirements that drive up costs, and so on. Then, when demand picked up again from 2021, driven mainly by immigration, we realised the cost of these rules. Construction could not keep pace with the growing number of households.” 

To the populist right, which links the housing crisis to immigration, Galindo points out that “in the 1990s we were building 250,000 homes a year for new families, and we didn’t care who they were or where they came from. It makes no sense to respond to a poor housing policy by changing immigration policy. They are two different things”. However, the expert does not rule out measures where certain uses of housing reduce its availability for those who wish to live there: “Non-resident property buyers are not the main cause of the shortage, but they play an important role in places such as Alicante, Málaga and the Balearic Islands. If they are not buying to let on a long-term basis, it might make sense to tax them in those areas”.

Finally, regarding the EU Commission’s Affordable Housing Act, Galindo says he would like to see greater commitment from Europe to reassessing the regulations that hinder construction: “Let’s review what has been done over the last fifteen years with environmental directives, identify where obstacles have been created, and amend them”.