As of today, the Spanish population is suffering from a great lack of living spaces due to the high increase in rent prices, and the inability to obtain a mortgage to buy a house. In addition to this, the Spanish Central Bank has declared that the country has a shortage of 600,000 houses, leaving thousands of Spaniards without a roof underneath which to live in. The social groups facing these problems first-hand are low-income families who are unable to afford rent nor a mortgage, and young people, who are ready to look for independence but cannot find an adequate place for an affordable cost.
One of the main causes of the crisis is the disparity between the rise of prices and the rise of salaries; while inflation has resulted in a steady increase in prices, salaries have not accompanied this increase. As an example, Madrid has increased its rent prices by 2 or 3 times more than it has raised salaries of workers in the city, leading to the eviction of those unable to pay. In this matter, 40% of Spaniards, amounting to 1.2 million households, feel economically crushed due to their incapacity to obtain a loan for a house and the persistently increasing rent.
The problem is accentuated when looking at the supply and demand of apartments and houses. The calculations show that for every house put on the market, there are 115 people interested in renting it, but these numbers can increase up to 350 in cities with higher demand such as Madrid, Barcelona or Valencia. To bridge the gap between the demand in excess of almost 15.000 houses and the low supply,there should be 35.000 houses built annually.
To alleviate the problem, the Spanish government has promised to provide 180.000 accessible houses, which have a set maximum price accounting for the area and metres squared. In previous decades, 7 million of these apartments have been freed, allowing landlords to set a price that suits them best.
Moreover, experts agree that tourism plays an important part. The high investment of foreigners (British and German, as example) in second residences in Spain, amounting to 351,589 households, in order to earn a great amount of capital during high demand seasons (such as summer holidays in the coast), has increased prices of apartments while dwindling the options for Spanish inhabitants.
With the available data, the I.N.E. (Spanish National Institute of Statistics) has declared that 5.5 million homes are at risk of being residentially excluded, and that 4 out of 10 families are being gradually impoverished by the high price of rent. Further research from the I.N.E. states that for every new house constructed in Spain, the construction of 0.4 new ones is started. The forecast based on this data expects to see 330,000 new houses from 2024 to 2028. Due to the expected increase in the population looking to rent or buy a house, this forecast will increase the gap of supply and demand by 240,000 houses annually between the aforementioned years.
This problem most sharply affects the vulnerable young populations of Spain who are looking to start an independent life away from home, but are unable to due to the high percentage of income expended in rent; If they were to decide to leave home, the ⅓ conducted towards rent takes up part of the budget for health, savings, or better nourishment.
Experts have agreed that there could be solutions set in place to diminish the rate of growth of prices. One of them is the implementation of limits to renting to decrease prices by 20 or 30%. One such limit could include the enactment of the Spanish “Housing Law”, which declares a “saturated” area and lowers its renting prices. Another option could be implementing the “Dublin System” with which landlords reduce prices by 20% leading to a long-run decrease in prices, and allocates funds towards “social housing”. Others advocate for taxing differently and harshly unoccupied apartments, or those that are used as Airbnbs; this could potentially lead to an increase in overall supply, and therefore, a price decrease. Lastly, the Spanish drafted “Land Law” could incentivize construction by reducing uncertainty in the construction sector, leading to more confidence and desire for building. This is a potential aid source, but does not take into account the large periods of time that it takes to build a house or apartment complex.
All things considered, the Spanish Housing crisis is negatively impacting many vulnerable social groups, but particularly lower-income families and young people. These groups are unable to afford high prices, and the lack of accessible or protected housing limits their possibilities of action. In addition, the disparity between supply and demand builds onto this problem, due to the shortages in available housing, particularly in great demand areas such as Madrid, Valencia and Barcelona. Despite their dire need,the available solutions are difficult to implement or would take a considerable amount of time to be carried out, warranting prompt action to improve the situation.
