Rental housing in Spain has a price problem and this is how the Government inten

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It is undeniable that rental housing in Spain has a price problem . It is true that it does not affect the entire territory but it does affect the most thriving populations. A recent study indicates, for example, that in all districts of Madrid city the effort to rent a m home exceeds % of the district's average salary. That % is the limit of what is usually considered reasonable for a rent.

Should we be worried about this? Well yes, and a lot. Not only because it has an impact on the finances of the most vulnerable people, but because it has an impact on the emancipation rate, the fertility rate and even how innovative cities are . Politicians know this but they differ in the way they deal with it, there are even divisions within the Government.


Price control, yes or no?
The star measure in terms of housing of this Government was to establish rental price control in areas where prices exceed a certain threshold . The proposal came from Unidas Podemos and was signed by the PSOE, although as we will see later, it does not seem that it will be implemented.

The problem with price control is that it doesn't work. It has been seen in multiple countries , if the State artificially sets a maximum price, the rental market disappears. In fact, in Spain we have had a recent experience: the Reform of the Urban Leasing Law of . There it was established that the rental contracts were indefinite, until the death of the tenant, and from then on, his spo  Ghana Email List   use or descendants could surrogate. In practice, leases were frozen and the rental market evaporated until the next two reforms of the law, in and



A market regulates scarcity via prices and if they cannot be set freely, then there will be long waits to obtain the desired good. Regulating the prices of the rental market, if it is with strong drops compared to the market price, the only thing it will achieve is that homes will disappear, it will be very difficult to access these few rental homes and we will return to buying and selling as the exclusive method of having a place to live .

The measure is an announced failure and perhaps for that reason (and for other political reasons, such as filling the gap that Ciudadanos is leaving when it sinks) the PSOE is now distancing itself from it and making another proposal.

What could work
The housing market is complicated, since it is not only the product that is important but also the location . In the face of a shortage of any good, the supply usually increases more or less quickly (new factories, for example) but in the case of housing, the space to build in areas with high demand is usually limited (sometimes artificially by a tangle of local, regional and state regulations). Therefore, given this shortage, it is difficult for the supply to increase quickly with new homes available.

Therefore, the measures should go in two directions: in the short term, try to have new homes offered for rent , in addition to those already built. In the long term, with new homes built and put on the market.

The second part is clear, just as in recent decades administrations have tried to make the housing market accessible by building and selling, now it is time to do the same but by building and renting . It's more complicated, yes, but it has to be done. Spain does it little . And no, it is not valid with FROB homes because they are normally not in areas of high demand, you have to make a plan by neighborhood .

The first point is more complicated. It consists of ensuring that homes that are not being used come onto the rental market. To do this, incentives must be given (for example, to rehabilitate them) but it could also work to be more coercive (for example, by taxing empty homes more without justification). The idea is to ensure that homes that are intended to be an investment are also on the rental market and also those that are not because they need renovation.