Reported ArticleAffordability

This Part of Spain Has Won Rent Regulations U.S. Tenant Activists Can Only Dream Of

In Spain, a new law makes rent control possible—and one region has implemented it. In Catalunya, a rent freeze and rental price index promise to help struggling tenants.

Barcelona’s Sindicat de Llogateres i Llogaters (Tenants Union) formed in 2017. Photo by Ariel Catalán Rodríguez

Igluub

On any given Friday evening in Barcelona’s Gothic Quarter, you’ll find a group of people in a circle of folding chairs under fluorescent lights. As you walk into the room, you’ll be greeted by someone in an orange Sindicat de Llogateres i Llogaters (Tenants Union) T-shirt with a logo of two intersecting keys and the motto, Ens Quedem (Catalan for “We’re Staying”).

On the night of March 22, a man is describing a situation with his landlord, who wants to end his lease prematurely. A woman from the Sindicat suggests a port-a-port, going door to door to find out if any of his neighbors are having issues with the same landlord so that they might bargain collectively. Four people volunteer to accompany him.

Most of the discussion involves informing attendees of their rights, especially in regard to new rent control legislation that went into effect in Catalunya in March.

New Rent Control Legislation (Again)

In May 2023, Spain’s national government passed a housing law (commonly referred to as the Ley de vivienda) that includes a range of benefits for renters. Autonomous regional governments are under no obligation to implement those measures. So far, Catalunya is the only regional government to do so.

This is partly because Catalunya is one of the few regions in Spain with a leftist coalition in power (the right-wing parties have shown a pugnacious antagonism to the law). Even more importantly, the national law is based on a previous one that was authored by the Sindicat de Llogateres i Llogaters and passed by the Catalan Parliament in 2020, then overturned by the national Constitutional Court two years later.

The court, which has a history of overturning legislation out of Catalunya, found that the regional government did not have jurisdiction to control rent. But the ruling left the door open for the national government to regulate rent prices. The national legislation passed in 2023 makes it possible to reinstate many of the original measures.

Anatomy of the Ley de Vivienda

Áreas Tensionadas (High-Rent Zones)

Áreas tensionadas, literally “stressed zones,” are municipalities where rents have increased rapidly (at least 3 percent more than the average inflation in the past five years) or where the average rent is considered excessive (more than 30 percent of the average salary in the zone.) Once an area is declared tensionada, certain price limitations apply under the new law, including an official rental price index and rent freeze.

The Catalan government classified 140 municipalities as áreas tensionadas. Eighty percent of the region’s population lives in these zones, many of which are in urban or tourist areas.

Price Index for High-Rent Zones

The price index limits rent on all new leases in áreas tensionadas when the property owner is a large landholder (defined as one who owns five or more properties).

Anyone can access the index online and enter their address to find out how much they should be paying for rent according to the government.

The current tenants of the apartment shown above, located in the Poble Sec neighborhood of Barcelona, have been paying 1,150 euros per month since they moved in at the end of 2022. That’s 47 percent more than what the government considers a fair price.

They can’t do anything about the current contract—the law only applies to new leases—but as prices fall over the next few months, they may gain negotiating power. One tactic that worked when the previous law was in effect was to have tenants communicate their intention to move out unless landlords lowered the rent. Given that any new occupant’s rent would be limited by the law, landlords were sometimes amenable to negotiation.

However, it is important to note that under the original Catalan law passed in 2020 (the one repealed by the courts), the price index applied to all landlords, regardless of whether they were a large or small landholder. As a result, rents fell quickly. Jaime Palomera, co-founder of the Sindicat de Llogateres i Llogaters and a housing researcher at IDRA (Institut de Recerca Urbana de Barcelona—Barcelona Urban Research Institute), says they fell by approximately 6 percent before the law was reversed.

Rent Freeze

The law also stipulates that in stressed areas, landlords cannot charge new tenants more than the price in the previous lease. This rule applies regardless of the type of landholder and the price index.

“The rent freeze is the most important aspect of the law,” says Enric Aragonès, spokesperson for the Barcelona chapter of the Sindicat de Llogateres i Llogaters. It means a stop to the relentless increases and combats a common problem faced by long-time residents of Barcelona: landlords refuse to renew existing leases because new arrivals are willing and able to pay more.

In December 2022, Spain approved a “digital nomad visa” that makes it possible for foreigners to live and work remotely from Spain—but only if they make at least double the Spanish minimum wage. The new visa comes amid an ongoing trend of increasing numbers of foreign knowledge workers with comparatively high salaries.

Meanwhile, Spain is facing an ongoing unemployment crisis. With rapidly increasing rents (they rose 11.8 percent in Barcelona, or 4 times the rate of wages, in 2022, when the courts repealed the Catalan housing law) many are struggling to pay. Between 2008 and 2020, Spanish rents increased at a rate 8 times that of young people’s wages.

Between the price index for large landholders and a rent freeze across the board, renters will have some relief from the siege of rent increases and evictions. However, loopholes and enforcement gaps mean the Sindicat’s work is far from over.

For example, there is no easy way for prospective tenants to find out the value of the previous rent. Nor is there a simple method to find out how many properties a landlord owns. It’s possible, but it’s a laborious, bureaucratic process applied to a fast-moving, competitive rental market.

Enric Aragonès, spokesperson for the Barcelona Tenants Union, addresses an international congress in April. Photo by Ariel Catalán Rodríguez

The Housing Rights Movement in Catalunya

A sweeping rent freeze that applies to 80 percent of the population is no small feat, especially when compared to the policy offerings in high-rent cities like New York City or London.

It’s even more impressive considering that Spain is a country of homeowners. In 2021, 76 percent of the population had a mortgage or owned a home outright and 24 percent rented. This is one of the highest rates of home ownership in Western Europe and 6 points above the EU average. Compared to a city like Berlin, where 85 percent of the population rents, in Catalunya’s capital, approximately 30 percent of residences are rentals.

A minority of voters benefit from this legislation. So, how did it get passed?

Some of the political will, according to Palomera, stems from a general understanding that people are suffering due to a cost-of-living crisis, particularly young people. As he points out, not even the children of politicians can afford to buy homes these days.

Cost-of-living crises are common, however, and this legislation is not. It owes its existence to a slow-burning but effective social movement that has been brewing in Spain for over a generation.

The modern incarnation of the housing rights movement owes its beginnings to a nationwide youth-driven campaign that started in the early 2000s with sit-ins and marches expressing frustration at being excluded from the mortgaged class. In September 2006, the Barcelona chapter of the organization V de Vivienda held a march that rallied around the cry, “No tindrás casa en la puta vida!” (You’ll never have a house in your f****** life!).

When the real estate bubble burst in 2008, banks foreclosed on houses and evicted hundreds of thousands from their homes. The dream of home ownership became a nightmare. In 2009, the organization PAH (Plataforma de Afectados por la Hipoteca, or Mortgage Victims Platform) was founded by a group of activists that included Ada Colau of V de Vivienda, future mayor of Barcelona. PAH’s goals were to put a stop to evictions, reduce mortgage debts, and increase public housing offerings.

The PAH organized huge protests at sites where foreclosures evicted families from their homes. One famous gathering in El Clot, a neighborhood of Barcelona, required 20 police vans to disperse the crowd in order to enforce the eviction of a family with three children. Later that same year, the organization began helping families “reoccupy” the very homes that the banks had repossessed, organizing around a new rallying cry, “Pasemos de la indignación a la acción” (Let’s go from anger to action).

When Colau became mayor of Barcelona in 2015, it was seen as a victory for PAH and the movement that she had helped lead for several turbulent years.

From Victims of Mortgages to Oppressed by Landlords

One outcome of the housing crisis was that the number of people who could buy houses shrank considerably. As the recession hit Spain hard and banks financed fewer loans, the properties that would normally have been sold became rentals.

As Santiago Leyva del Río, postdoctoral research associate with the Austerity and Altered Life-Courses project at the University of Manchester, explains, “After the crisis, equity markets started to buy massive amounts of housing stock that they couldn’t sell because people could no longer buy houses. So they decided to rent it instead.”

It will come as no surprise that the corporate landlords in Spain, like those in the U.S., have turned out to be rather greedy and eviction-happy. In fact, there were more evictions between 2014-2019 than there were from 2008-2013 (372,918 compared to 311,467). While the number of evictions peaked in 2012 at 70,257, they remained high, with an increasing portion due to inability to pay rent rather than mortgage default. And paying rent only got more difficult, as rents rose by over 40 percent per square meter between 2015 and 2020.

The good news, if you can call it that, was that there were people in Barcelona with experience in a housing crisis. El Sindicat de Llogateres i Llogaters formed in 2017. Founding members included activists from the PAH and other groups in the housing rights movement.

“Unlike traditional tenant unions, the organization we created here is grassroots,” explains Jaime Palomera. “If you have a problem, you go there on a Friday and find an assembly of 100 people.

“Instead of consulting with one person, you share your problem with everyone. All of a sudden, you see that your problem is not yours alone. It is collective. This builds trust and it builds power. And with power comes political will, and even more than that, respect.”

Enforcement Challenges

Landlords have strategized ways to get around the new legislation. One way is through short-term rentals, which, according to Aragonès, have more than doubled in recent months.

“The Sindicat saw this coming and wanted to regulate short-term rentals within the legislation.” However, he explains, PSOE (the Socialist Workers’ Party) was against the proposal and in the end the law went forward without it.

A cursory glance at recent rental postings confirms that there’s an abundance of short-term rentals available to let for 11 months or less. “Even people—families—who have every intention of finding a home where they can stay long-term, are settling for these overpriced, short-term leases,” says Aragonès.

When asked why people opt for short-term leases over the 5- or 7-year contracts they’re legally entitled to, his answer is scarcity: “People are desperate to find housing. They don’t have a choice.”

Landlords Have More Options Than Renters

While the reason for the cost of housing is certainly more complicated than supply/demand, the effect of limited housing options means landlords have the luxury of long lists of applicants for every rental property, one of whom might settle for a less-than-legal lease whether out of desperation, ignorance, or both.

Public housing offers little to no relief. There is less than 1 public housing unit per 100 Spanish residents, 0.9, compared to the EU average of 3.8. The percentage of the total Spanish housing stock designated as public housing is 2.5 percent, trailing the EU average of 9.3 percent. The Netherlands and Austria lead the pack at 30 percent and 24 percent respectively.

A citywide ordinance passed in Barcelona in 2018 designates 30 percent of new construction to social housing, but whatever benefits it may generate have yet to be felt. According to Leyva del Río, Spain is 20 to 30 years behind the rest of Europe.

Lackluster Government Support

As of now, there are no government agencies or task forces publicly designated to enforce the new rent control law; Igluub contacted multiple agencies that were not able to point to one. The onus is on tenants to resist rent increases from current landlords or refuse to sign new leases that charge more than the previous contract or the price index.

A banner at a Sindicat de Llogateres i Llogaters event reads “Landlord Tears.” Photo by Ariel Catalán Rodríguez

According to the Sindicat, the owner or rental agency is obligated to publish the previous rent in the listing, as well as in writing when asked by a prospective tenant. A cursory look at recent rental listings reveals this is not common practice, at least not yet.

There are forms that one can fill out to request information regarding the previous lease or report suspected noncompliance to different government agencies. The forms have appendices that list documents required in different circumstances. One can’t help but wonder if these forms will do anything to protect the people who Aragonès describes as “desperate” for housing.

If renters petition the zoning agency and find out they’ve been duped, they have the right to sue, but it’s unclear for how much. In contrast, the previous Catalan law fined landlords up to 300,000 euros for noncompliance, which was quite effective, according to Palomera.

Lack of Information

“We had expected that the Ayuntamiento (Barcelona city government) would have implemented some informational campaigns to help people understand the law, but they have not,” says Aragonès. “In fact, some of the information they’ve put out is wrong.”

He explains that the union has made the city administration aware of the information gaps and pointed out inaccuracies. In the meantime, however, it appears that the onus is on the Sindicat to inform people about their rights.

Back at the tenants union meeting, it’s nearly 9 p.m. Tenants explain their problems to their fellow members: a shower that leaks, a deposit never returned, a refusal to renew a lease.

The answers are similar for the majority of the cases. No, the landlord cannot do X. Yes, you have the right to Y.

Catalunya’s tenants enjoy many protections, including from rent increases, but there is a significant knowledge gap. Even among these Friday-night attendees, the majority of whom are Catalan speakers, all of whom at least know there is a tenants union in Barcelona, there is a palpable fear that any sudden move could lead to their being evicted from their homes. What about new arrivals to the city, ones who don’t speak Spanish or Catalan and have nowhere to stay while they negotiate a fair price with a new landlord?

Barcelona’s Sindicat de Llogateres i Llogaters (Tenants Union) formed in 2017. Photo by Ariel Catalán Rodríguez

From Asset to Human Right

“When we started [the Union], nobody talked about rent control. Nobody,” says Palomera. Now, seven years later, “a majority of people are in favor of rent control. One of the successes of the tenants union has been to open up a debate about, and dispute the social function of, private property.”

When asked if he thinks that rent control will be repealed again, Palomera says no. He recites Article 33 of the Spanish constitution by memory, which states that the right to private property is limited by its social function.

“We want people to understand that housing cannot be a ‘great investment’ and affordable at the same time,” he says.

In the zero-sum game of rental profits and affordable rent, the social function of housing cannot be left to the free market to decide which scraps it will leave for the rest of us. If any city is an illustration of this, it’s Barcelona.

Barcelona is also an example of how to demand something better.

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