The Housing Law consolidates the rent ceiling throughout Spain and lowers the large holder to five properties

The stressed areas are expanded, which will be marked by the community, and the restrictions for landlords may be imposed on individuals

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The agreement reached by the coalition government parties and the independentistas of Esquerra Republicana (ERC) and EH Bildu to unblock the Housing Law will consolidate the ceiling on the rental price throughout the Spanish territory, regardless of whether or not it is a stressed area. It will allow the concept of large holders to be reduced from ten to five properties and will extend the restrictions for landlords contemplated in those stressed areas to individuals.

As stated in the agreement, presented in Congress by the spokespersons for EH Bildu and ERC, Oskar Matute and Pilar Vallugera, respectively, the 2% limit will be maintained for this year in the rent increase, a ceiling that will increase to 3 % in 2024 to, before December 31 of next year, create a new reference index applicable throughout the territory.

Specifically, the CPI will be eliminated as a reference index for the annual update of the rent of contracts throughout the Spanish territory, as these groups consider that inflation “has proven to be an index that can generate enormous fluctuations in a few months”.

The new indicator, which the National Statistics Institute (INE) will be in charge of preparing, aims to be more stable and lower than the evolution of the CPI and will also be applicable to those contracts signed prior to the law that were subject to the CPI. To partly compensate for these limitations, tax incentives for small owners will also be included in the law, something that for the ERC spokesperson “has not been a dish of good taste.”

THE SALE OF THE PUBLIC PARK TO INVESTMENT FUNDS IS PROHIBITED

From the Government they have affected these tax benefits. For example, an optional system is created for local entities, through the IBI, to favor the mobilization of empty houses. Likewise, public housing parks will be protected and sales to investment funds will be prohibited.

On the other hand, the land reserve percentages for subsidized housing will increase from 30% to 40% in developable land and from 10% to 20% in unconsolidated urban land. Additionally, a mechanism is established to guarantee transparency in the real estate field, both in the purchase and in the rental.

Matute and Vallugera have explained that the regulation establishes new causes for the application of control measures in stressed areas. Thus, these areas will be declared when the average cost of the mortgage or rent plus basic expenses and supplies exceeds 30% of the average household income, or when the purchase or rental price of the home has increased at least three points above the CPI in the five years prior to the declaration of the stressed area.

It is enough that one of the two conditions is met for the area to acquire this qualification. In these areas, if the owners want to extend a contract to a tenant, this new rent will mandatorily maintain the same conditions as the previous contract for a maximum period of three years.

However, the declaration as a stressed area will always correspond to the autonomous community, the spokespersons have clarified. Thus, all rentals in stressed areas “in all cases” will be regulated and capped. This will be effective for both large and small owners, as well as for real estate contracts that are on the rental market and for new contracts.

The ceilings will be established, depending on the type of contract and property, through the indexation to the previous rent in force for small owners and through the application of the price containment index for large holders.

THE COMPETENCES OF THE REGIONS ARE SHIELDED

In addition, the law will respect regional and local powers, suppressing seven articles relating to consumer policies. As ERC and Bildu have explained, in this matter the State has no competence, and for this reason this modification has been carried out in order to overcome the “competence violation” in terms of housing in the autonomous communities.

In the opinion of the pro-independence groups, with this change the rule “goes from containing numerous invasions of jurisdiction to an enabling law that offers legal certainty and the ability to adapt new, more advanced policies.”

On the other hand, evictions without a predetermined date and time will be prohibited. It also includes new extensions in the launch procedures, which will postpone the processes for more than two years, and stipulates mandatory access to out-of-court settlement procedures for vulnerable people.

In addition, the autonomous communities will be able to articulate their own mediation and housing alternative mechanisms that they deem appropriate, forcing the large holders that carry out evictions to submit to them.

The ability to use funds from state housing plans to offer alternatives for people at risk of eviction through subsidized social rents, rehousing people in vulnerable situations or any other policy that aims to offer a housing alternative to these will also be recognized. people and families.

THE FEES, IN CHARGE OF THE OWNER

Another key aspect of the agreement is that the real estate expenses and fees produced by the rental of a property will always be borne by the owner. For Bildu and ERC, this means ending “abusive” expenses and fees that prevent many people, and especially young people, from accessing a home for the initial outlay that it entails.

Specifically, it is prohibited to increase rental income through new expenses, which would force tenants to pay community expenses, garbage fees or any other expense not attributable to the tenant that were not previously agreed.

In this sense, to apply an increase in the rental price for the preparation of a reform in the house, said reform will have to exceed 10% of the purchase value of the house. As Matute has explained, with this measure they have wanted to correct this form of rent increase, a “picaresque”, he said, applied in the European environment.

These agreements will be reflected in amendments to incorporate them into the bill sent by the coalition government before it is referred to the Senate, presumably at the end of the month or already in May. The spokespersons for ERC and Bildu have pointed out that both the Ministry of Transport and the Ministry of Social Rights “have the will” to see it move forward and not run aground before the end of the legislature.