Housing crisis: Spain's transitional parliament approves housing decree

Madrid. Spain's smaller interim parliament has approved a government decree to tackle the housing crisis. This enshrines protection against evictions, greater regulation of rental agreements and a ban on the purchase of apartments by “vulture funds” that are well below market value by 2030.

There should also be tax breaks for tenants and landlords as well as stricter rules for temporary rental agreements. However, a second decree, which, among other things, provided for an automatic extension of rental contracts that were about to expire, did not find a majority.

The regular parliament rejected the two decrees of the left-wing minority government under Prime Minister Pedro Sánchez in October with the votes of the conservative opposition. Sánchez then called a new election for November 29th and parliament was dissolved.

According to the constitution, the so-called Standing Committee then took over parliamentary work. It consists of 68 representatives and a chairwoman, who are selected proportionally to the strength of the parliamentary groups. However, due to rounding in the allocation of seats to smaller factions, the governing parties and their partners currently have a majority of one vote. The opposition sharply criticized the government's actions. Sergio Sayas from the conservative People's Party PP denounced a “fraud” by the government.

Only the day before there were massive demonstrations for affordable housing as part of a general strike in several major Spanish cities. While the unions spoke of a successful strike that exceeded expectations, the employers' association described the strike as a failure. The protests against rising rents and housing shortages were triggered by the forced eviction from the apartment of 87-year-old pensioner Maricarmen Abascal in Madrid in September.

As the largest opposition party, the PP has already announced that it would repeal the rent decree if it wins the election. While the Sánchez government relies on state investments, public housing, rent caps and protective measures, opposition leader Alberto Núñez Feijóo (PP) is pursuing a supply-side approach with tax cuts, reductions in bureaucracy and stronger property protection.

Most polls currently predict that the PP, together with the right-wing populist Vox, will have an absolute majority of parliamentary seats. Sánchez has ruled since 2018.

The housing market crisis will be one of the biggest challenges for the next government, regardless of which parties win the election and form the next government. The Spanish central bank currently estimates the shortage at around 750,000 housing units. Rents and property prices have been rising significantly faster than real wages for years. Since there is a high level of immigration to Spain, but at the same time too few new apartments are being built, prices are rising rapidly.