Rental price regulation in Catalonia will take effect in February, according to the Generalitat's announcement
In an attempt to address the housing affordability crisis in Spain, a new rent control law has been introduced, aiming to encourage lower-priced rentals for young people through tax incentives. However, the law, according to Andrea Jarabo of Provivienda, does not solve the problem on its own.
Tenant associations in Catalonia have expressed opposition and frustration towards the implementation of the rent control law, particularly in "tension areas". They argue that the law, including a rental price reference index introduced by the Spanish government in March 2024, fails to fully address the housing affordability crisis.
While the law aims to limit rent increases in areas with high demand, tenant groups have reported that it has inadvertently encouraged landlords to prefer short-term leases—which are exempt from the rent caps—making long-term affordable housing even scarcer.
The law, enacted in May of the previous year, attempts to introduce a reference index for rental prices in highly pressured "tension zones" to cap uncontrolled rent hikes and provide a regulatory tool to keep rental increases in check and ideally make renting more affordable for vulnerable groups.
However, the effectiveness of the law is debated. Experts and tenant advocates highlight that it may create unintended consequences, such as landlords shifting towards lease types or arrangements not covered by the rent caps, thus limiting long-term benefits in affordability.
The Ministry will publish the tension areas of these 140 municipalities, which represent 80.6% of the population of Catalonia, including the four provincial capitals -Barcelona, Tarragona, Lleida, and Girona- and other large towns such as L'Hospitalet de Llobregat, Terrassa, Sabadell, Mataró, Santa Coloma de Gramenet, or Reus.
The Ministry of Housing will soon approve the index systems to be applied, a key point within the Housing Law. For 2023, the percentage increase for rental contracts was capped at 2%, and for 2024, it is 3%. For 2025, the percentage increase will be referenced to a new index, lower than the evolution of the CPI, which will be elaborated by the National Institute of Statistics.
The Sindicat de Llogaters (tenants' union) criticizes the delay in the implementation of the rent control law, as the price of rent in Catalonia has increased by 13% since its approval in 2019. The Counselor of Territory of the Government of Catalonia, Ester Capella, announced that the rent control law will come into effect in February.
Andrea Jarabo of Provivienda acknowledges that the measure "mitigates the now" but emphasizes the need for continued work towards a structural change to solve the housing problem. Other communities are encouraged to take the rent control law as an example, as it is up to them to inform the State of the tension areas in each territory.
Despite these efforts, approximately 60% of households in Spain have some housing-related problem, and more than 37% of renting households are at severe risk of poverty after paying the rent. The ongoing tensions between policy goals and market realities in Catalonia and Spain's broader housing sector reflect the need for comprehensive solutions to address the housing affordability crisis.
[1] Tenant associations criticize rent control law in Catalonia, El País, 10th March 2024. [2] Rent control law in Catalonia: What's new?, El Mundo, 1st February 2024. [3] The impact of the rent control law in Catalonia, La Vanguardia, 15th March 2024. [4] Barcelona City Council's public housing initiatives, Ajuntament de Barcelona, 2023. [5] The housing affordability crisis in Spain, Provivienda, 2022.
- The rent control law in Catalonia, while aiming to make renting more affordable, has sparked concerns among tenant associations, who argue that it may lead to unintended consequences, such as a shift towards short-term leases and limited long-term benefits for vulnerable groups.
- In the debate over the effectiveness of the rent control law, experts and advocates contend that the law might not be a comprehensive solution to the housing affordability crisis in Spain, as approximately 60% of households nationwide still face housing-related problems, with more than 37% of renting households at severe risk of poverty.
