Spanish government plans to control rents in new housing bill
Spain’s left-wing ruling coalition wants to curb soaring housing costs by imposing rent increase caps on landlords who own 10 or more residential properties.
Opposition parties and heads of business organizations criticized the proposal as an inappropriate intervention in the free market by the government of Spanish Prime Minister Pedro Sánchez.
Government ministers approved the rent control bill at a weekly cabinet meeting on Tuesday. Vulnerable families and young adults in Spain’s largest cities would be the main beneficiaries of the proposed law, the government said.
Low wages and a youth unemployment rate of 35% – the highest among the 19 countries that use the common euro – mean that many Spaniards cannot afford to live on their own. They leave the family home at the age of 30 on average, compared to 26.4 years on average in the European Union.
The bill’s most controversial provision would set price increase caps for homeowners with multiple residential properties, a move designed to target large real estate companies and investment funds. The government has yet to release the draft, so details on the cap were not immediately available.
But officials said the bill also included tax cuts of up to 90% for owners of fewer than nine properties who decide to lower their rents.
The Prime Minister announced that as part of a separate initiative, the government plans to help adults between the ages of 18 and 34 pay their rent by giving them a monthly bonus of € 250 for up to two years if they earn less. from € 1,977 per month.
The proposed law would also reserve 30% of all public housing as rental units instead of making it available for people to buy at a reduced price, and significantly increase local taxes on vacant residential properties.
Regulation of the housing market has been the main obstacle preventing Sánchez’s socialists from agreeing on a national budget for 2022 with the coalition government’s junior partner, the anti-austerity party United We Can.
Lawmakers are expected to pass the annual spending plan on Thursday, both sides said on Tuesday. The vote in the Congress of Deputies, the lower house of the Spanish parliament, is seen as a test of the government’s strength.
To pass the budget, Sánchez’s minority government needs the voices of lawmakers outside the coalition, including separatist parties from Catalonia and the Basque Country.
“Housing is a serious problem in our country,” Sánchez said.
United We Can Labor Minister and leader Yolanda Díaz said the bill paves the way “to a new country.”
“The time has come for the big multinationals to pay what they owe,” she said.
But the conservative opposition People’s Party accused the government of mounting “an unprecedented attack on private property.”
“We have a government with communists who intervene in the markets on a daily basis,” party spokeswoman Cuca Gamarra said.
Antonio Garamendi, head of the country’s largest business group, CEOE, also opposed the move.
“People have a right to save money, and the fact that the state is coming now and saying how to handle what you have already paid for and already pay taxes for is a stark distortion of what is freedom and the right to property, ”Garamendi said.