Spain is having a housing crisis.
Even the New York Times is talking about it.
Rent prices in urban areas just keep going up, and people are looking around for someone to blame.
Meanwhile, the government’s rent-control scheme seems to have done nothing to help – and maybe even made things worse.
The new housing law is a dud. Due to the lack of protection for homeowners, many have just taken their rentals off the market, or decided to rent them out temporarily, to expats or digital nomads.
Is it the fault of Airbnb? The hedge funds buying up flats? The greed of the landlords?
Or is it just that millions of people want to move to Spain, and there aren’t enough houses for everyone?
Today we’re going to talk about the housing crisis in Spain. Long story short: it’s complicated.
Adventures with Spanish Real Estate
A few weeks ago there was a huge racket in the hallway outside my door.
Nothing unusual about that. Spanish cities tend to be pretty noisy.
But I happened to be leaving the house a few minutes later, and found that one of the neighbors was out there with a locksmith, and that they were changing the locks on the studio next door.
“A few days ago they kicked the okupas out”, explained the elderly neighbor. “And now the bank is taking back their properties.”
I’d been told that the people living in the studio were okupas (squatters, as we know them in English). But I’d only seen them a couple of times. They seemed like normal people. Unproblematic.
That was just after we’d moved in. I later went to the meeting of the Comunidad de Vecinos – the homeowners association – mostly because as a new homeowner I’d never been to such a thing, and assumed it was obligatory.
The meeting was held in Catalan, and I was bored almost to tears for over three hours, but what I learned was that an investment fund of some kind owned a lot of flats in the building, and had gone bankrupt, leaving some of the places empty and some with tenants.
Spanish law does a lot to protect people from being evicted from where they live, and I think that’s a good thing. In the case of a bankrupt investment fund owning your rental flat, I suppose there’s no-one to really kick you out anyway.
Now, a year and a half after we moved in, some other fund had bought the assets and was taking an interest in our building. So they’d evicted the okupas, and were changing the locks. Hence the noise in the hallway.
Revenge of the Okupas
A few days after the changing of the locks, on Saturday afternoon, I was lounging on the sofa with a copy of Ulysses S. Grant’s Personal Memoirs (as one does) and there was a huge racket in the hallway outside my door.
Whatever. Spanish cities are noisy.
I ignored the heavy pounding for a few minutes, but it didn’t go away.
Eventually I got up and looked through the peephole. Some guy with a crowbar was trying to force the door of the studio – the same one they’d changed the locks on a few days before.
Well, that was strange. After a brief consultation with my wife Morena, I decided it was probably better to call the police and let them sort things out. I dialled 012 and explained the situation.
They said they’d pass my complaint along to the competent branch of law enforcement. And a few minutes later I got a call back from the Mossos d’Esquadra – the Catalan regional police force.
In the meantime, I’d spoken to the crowbar people. It was a guy and a lady, and the lady claimed they were the ones who lived there. I wasn’t sure. I’d seen the previous people once or twice, a year before, and wasn’t sure this was them. But maybe it was. Anyway, the crowbar seemed a bit suspicious.
A few minutes later, the Mossos showed up: three plainclothes guys – one with a radio.
The crowbar people had started moving things out of the little studio. The Mossos spoke with them, and then the oldest of the three came and explained the situation to me.
“They say they’re the previous occupants, and that they’re just back to pick up their furniture. We can fine them for the damage to the door, but that’s it.”
And in a very abbreviated version, that’s what happened: the crowbar people put their furniture in a van, and left. I don’t know if the Mossos fined them, in the end. A few days after that (with another huge racket) some workers came in and changed a bunch of doors in our building to huge, thick, security doors – hopefully crowbar proof.
The real estate struggle in Barcelona
A couple of years ago I wrote about okupas in Spain, and it’s time for a bit of an update.
The whole squatting issue had been in the news in those days, because of some protests and counterprotests in one of the nicer areas of Barcelona.
On one side, some young squatters making a political statement, and on the other, people from the Desokupa company (and associated right-wing groups) performing what I took to be a publicity stunt in order to get some free advertising.
All this was in the run-up to the 2023 municipal election and was soon out of the news cycle.
After that writing, I heard the judges had finally ordered the youngsters out of their abandoned building, and that City Hall had bought the land in order to build a park. El Kubo, as it was called, was being demolished.
The owner of Desokupa (a company that will get rid of squatters for a fee) appears in the news from time to time – offering self-defense classes to police officers, for example, or taking out large billboard advertisements attacking Prime Minister Pedro Sánchez.
The whole okupa issue gets pretty political. And as a card-carrying member of the Exhausted Majority, I try my best to avoid such topics. I’m just happy to be an upwardly-mobile immigrant, and not one of the squatters.
The housing crisis in Spain
The okupa issue is just one part of a larger housing crisis that’s been brewing in Spain for the last few years.
In fact, I’m tempted to say there’s never been a dull moment in Spanish real estate, in the 20-plus years I’ve lived here. From 2004 to about 2008 there was the euphoria of the real estate boom – euphoria for those who could afford to buy houses, that is.
I was an illegal immigrant at the time, and when a co-worker said he hoped to someday sell his two-bedroom flat in our working-class neighborhood for 750,000€, I thought he was out of his mind.
As it turns out, I was right: soon the crisis hit, unemployment was over 20%, and people with variable-rate mortgages were up to their necks in debt and unable to sell, because no-one was buying.
In those days I was seeing flats for sale at 50,000€, if you were willing to live in a neighborhood in the south of Madrid, like Vallecas or Usera. Some friends trying to sell had no offers for three years.
I wrote quite a bit about that whole thing in my Great Recession article.
The real estate market spent the better part of a decade in free fall. To give you an idea, in February of 2014, I rented a two-bedroom apartment near Plaza Castilla for 600€ a month. Three years later, when it was time to renew the contract, the landlord upped it to 630€, and I felt like I was getting screwed.
But within a few months, prices started rocketing back up. Soon, my 630€ flat started to seem like a really good deal. Now, according to idealista.com, a low price in that same area is around 1600€ – almost three times(!) what I was paying before the big run-up.
Rent price madness in Barcelona
Of course, there was a lot of other fun in the meantime.
Morena and I moved to Barcelona and got a one-bedroom in Barceloneta for 750€ a month. That was on an eleven-month contract, which was not very common at the time (at least I’d never heard of it). But we soon found that we didn’t have the same rights as long-term tenants.
After 11 months, we re-signed for 850€ a month, but soon after had to move to a more permanent rental to please the immigration people. Morena was trying to get a new residence permit, and temporary accommodation wasn’t what they wanted to see.
We found another one-bedroom for 1050€ (a much nicer one, with a long-term contract) but prices seemed to be rising quickly. Then with the pandemic, they crashed again.
In December 2020 we moved to a better neighborhood, and a large two bedroom, for the same price: 1050€ a month got you quite a bit more at Covid prices, because a lot of the students and foreign population just left Barcelona.
After a couple years of virus-themed dystopian politics, prices started rising yet again. When Morena suggested we might soon be paying 1500€ for our rent, I finally agreed to start looking at places to buy. And the rest is history.
Okupas, okupas everywhere…
When we bought our current flat we knew that it wasn’t the best neighborhood, and that squatters might be an issue. But it was what we could afford. Also, squatters are an issue almost everywhere in Spain, and we’d been told that they mostly occupy bank-owned properties.
(How they know which properties are bank-owned, I’m not sure. You can get the name of the owner of a piece of real estate from the property registry for around 9 euros, but I guess there may be other ways too.)
Anyway, we didn’t see any reason to worry about our new location. It was just the squatters next door, and the squatters in one of the commercial spaces downstairs. And maybe others.
I don’t keep track of other floors in the building, but the number of security doors recently installed suggests this was a problem beyond my own doorstep.
Still, it’s worth mentioning that most okupas aren’t making a political statement. They’re just people trying to get by, and they’re not causing problems.
Some of them may not even know that they’re okupas. They’re just renting a room from someone with an informal arrangement – they’ve never seen the rent contract, because there is none. The person renting the place out is just someone with a crowbar and some risk tolerance.
Street-level squatting in commercial spaces is fairly common as well: the people downstairs live with no light behind a steel shutter, and seem to collect scrap metal for a living. Elsewhere, there are bajos with a bedframe as a door, and other such improvised housing situations.
RENT STRIKE!
Recently, there have been a couple of protests against real estate speculation.
Article 47 of the Constitution (in theory) protects the right of “todos los españoles” to dignified housing. In practice, that’s questionable. And a quarter of the population of Barcelona is foreign-born anyway – immigrants like me and Morena. So the rights of “todos los españoles” are not something we really benefit from.
(For more on how you can live in Spain for 20 years, only to have your application for nationality rejected, take a look at my recent article. But I digress.)
Some organizations of renters, the so-called Tenants’ Unions, have gone so far as to suggest that a rent strike would help. I saw some graffiti to this affect around Parc Güell a few weeks ago – the claim was that if just 1000 people stopped paying, “the landlords” would tremble with fear!
The idea that landlords are some class of people – top-hat wearing capitalists straight out of a Monopoly boardgame, perhaps – is (I think) stupidly naive. Most of my landlords have been random old folks, or people who had kids, moved to a bigger flat, and rented out the smaller one.
And I kind of doubt they’d tremble, anyway. They’d probably just call Desokupa.
The public housing solution?
A lot of people assume that the solution to the housing crisis is for the government to create some massive amount of public housing.
I can think of a couple of problems with this.
- It’s slow. They’d probably have to create new legislation, pass a bill through the Senate, hold public tenders so companies could bid for the projects, and then actually build the houses. We’re talking a couple of years at minimum, maybe much more.
- Who exactly would they give the public housing to?
About the first point I’ve recently read that a public tender to build 3700 rent-controlled flats in locations around Spain ended without any bids from companies or investors. So maybe this kind of thing is just so unprofitable that nobody really wants to do it.
About the second, La Vanguardia has an article called ¿Da votos la vivienda social? in which they point out that politicians do things for votes, but the people living in public housing tend not to vote much.
Add to that the fact that if they did build a million houses for low-income families, they’d have to give them to someone, and the most likely candidates would be immigrants who also don’t vote.
Also, La Vanguardia says this politely, but the far right would have a field day if the government gave all the public housing to immigrants, leaving low-income Spanish people looking around and wondering where their lifetime of tax payments had gone.
Are hedge funds to blame for the housing crisis?
Barcelona has recently suggested it’s going to ban Airbnbs from operating… not now, but in a few years.
As I’ve said repeatedly on here: I take these things with a grain of salt. There’s quite a gap between what the government wants to do, the laws they can actually pass, and the laws they’re willing or able to enforce.
So maybe that’ll help. Or not.
Meanwhile, people are starting to blame hedge funds for buying up flats and raising the prices.
Sumar (AKA the smoldering ruins of the Podemos party from several years ago) has recently suggested passing a law that would allow only “personas físicas” to buy houses: real people, in other words, but not corporate entities.
I’m not sure how much of an effect the hedge funds are having on real estate as a whole, but this sounds like it might plausibly work.
Is the government really going to stand up to some big companies like Airbnb and the hedge funds, though?
Will these (proposed) laws make it through the Senate, and the Supreme Court? Will the European Union find some way to object?
Perhaps. But only time will tell.
Buying vs renting in Spain
I’ve talked about my situation here, but if you’re a younger Spanish person, you’re probably not moving out of your parents’ house until around age 30, and one of the main reasons is housing. (Another is massive youth unemployment, but let’s leave that for another article.)
Renting is – as I’ve explained – expensive, and if you’re earning an entry-level or intern’s salary (maybe a bit over 1000€ a month) you’re going to have some trouble even getting a room in a shared flat.
Buying a house isn’t an easy solution either. Most Spanish people own their homes – renting is a bit of a side-show to the real estate market. But the prices are going up for home-buyers as well, just not as steeply.
Do the math: if you need to get together 20% for a down payment, plus a few percent for an agency fee, plus another 6 to 13% for taxes (depending on your Comunidad Autónoma) you’d better start saving your nickels when you’re about 10 years old.
Otherwise, you can hope your parents give you the money. But unless your parents happen to be members of the top-hat wearing capitalist class, you might be out of luck.
Who caused the Spanish housing crisis?
That is, indeed, the million dollar question.
This was originally supposed to be a gentrification article, but I think the Spanish housing crisis is much bigger than just gentrification – it’s happening almost everywhere.
(Also, I’m unconvinced by gentrification to begin with, but that’s another story.)
Either way, I understand the basic need to blame someone.
Depending on where you’re at personally or politically, you may be more comfortable blaming one group or the other for the increase in housing prices. Maybe you blame the socialists in the government, or the hedge funds, or capitalist greed, or the “expats” with their expensive oat milk lattes.
I think these things are quite complex, and it’s not the fault of any one group of people.
According to Idealista, the available supply of housing has increased a bit of late, but it’s nowhere near enough to keep up with demand. So until the government can take some sort of (effective) action, or millions of new houses can be built, I guess things aren’t going to get much better.
But that doesn’t lend itself to the creation of a simple slogan or an internet meme.
“Perhaps we should just muddle through as we’ve always done” – how’s that for a bumper sticker?
Yours,
Daniel AKA Mr Chorizo.
P.S. When I was buying, half of the places desperately needed a remodel. And actully, a lot of Spain’s “housing stock” is old, and in terrible condition. Maybe there’s an opportunity for people wanting to buy something cheap and renovate it themselves. Just a thought.
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