In this article, EL ESPAÑOL-Invertia brings together the definitions of the terms most used by study centers, the unions And political parties in his daily life to discuss the housing problem in Spain.
Housing law.
The Housing Act is one of the great legacies of the last legislature. It was approved on April 27, 2023 with the support of PSOE, Podemos, ERC, Más País, Compromis, Teruel Exist and PRC. PP, Vox, Ciudadanos, Junts and PNV voted against.
The rule caps rent increases and allows rent prices to be regulated by declaring stressed areas. As this is a matter in which many powers are delegated to regional administrations, the central government cannot impose compliance with all its provisions. This happens, for example, in stressed areas.
The law has been controversial since its implementation. In just one and a half years of validity, it has accumulated up to eight appeals before the Constitutional Court.
Stressed area.
Stressed areas are one of the most controversial aspects of the standard. Thanks to this mechanism, Autonomous Communities that meet a series of requirements can tighten their market and link the price of part of their rentals – which must also adjust to certain parameters – to a reference index.
In other words, this tool allows, de facto, the direct intervention of the rental market administration. For the moment, only Catalonia and the Basque Country apply it. The central government cannot impose them.
Faced with the refusal of the PP regions to apply them, the Ministry of Housing wants to condition the financing of housing on its development.
What are the requirements?
As Idealista explains, for an area to be declared stressed, at least one of these conditions must be met:
That the average burden of the cost of the mortgage or rent on the personal or cohabitation unit budget, plus basic expenses and supplies, exceeds 30% of the average income or average household income in this area.
That the purchase or rental price of the housing has experienced during the previous five years a cumulative growth percentage of at least three percentage points higher than the cumulative growth percentage of the CPI of the corresponding autonomous community.
Reference price index.
The National Reference System for Housing Rental Prices (SERPAVI) – commonly known as the Reference Price Index – is a public database of rental contracts, created and periodically updated with different sources of state, regional information and local.
The index does not provide a single reference price, but rather a price range between which the market should oscillate for housing located in a specific area and with certain characteristics.
In addition to its informative nature, the Index will mark the limit of rental prices in areas declared stressed, provided that the rents meet a series of conditions. In the case of small owners, this is not always obligatory.
Seasonal rental.
Seasonal rentals are those which are not intended to satisfy a permanent need for housing, but rather to serve as accommodation for a specific period of time (generally less than a year). They are governed by the will of the parties, the law on urban leases and the Civil Code.
They do not fall within the scope of the recent Housing Act and are therefore not affected, among other aspects, by limitations on rent updates or extraordinary contract extensions.
This means that its impact has been greater on large markets and, above all, on those where public managers have announced their interest in applying effective price control (especially in so-called tension zones). In other words, thousands of owners have switched from traditional rentals to seasonal rentals to avoid the law. The government has already taken measures to regulate this situation.
Tourist rental.
Seasonal rental is the type of rental that is signed when renting a tourist apartment. In Spain, given the large number of tourists who come to our country, it has become a highly sought after product in large cities.
Several Spanish municipalities, faced with the increase in this type of housing, have decided to suspend the granting of licenses. In the case of Madrid, offering accommodation according to this modality without having the corresponding permit can result in fines exceeding 10,000 euros. The government announced in May that it would apply European regulations to monitor the sector.
Real estate effort threshold.
The housing effort threshold is the percentage of income that a family or individual devotes to paying their housing-related expenses.
As a general rule, if this is greater than 30%, it is considered to be a situation of real estate tension. In Spain, 65% of rentals currently exceed the recommended effort threshold.
Affordable rental housing.
Generally, affordable rental housing is considered – whether public or private – when less than 30% of the tenant’s income is used to pay the rent.
The objective of this type of rental is that the tenant can, alongside paying rent below the market rate, save enough to pay the deposit for a house, apply for a mortgage loan and become the owner of a property .
After all, a mortgage payment at the end of the month is usually less than the cost of rent.
Incentivized affordable housing.
In Spain, in addition to affordable public housing, there is incentivized affordable housing. It is a private property which benefits from urban planning and tax advantages.
It was introduced for the first time into Spanish legislation on the occasion of the approval of Law 12/2023 of May 24 on the Right to Housing.
“That is to say, private companies that own housing will be able to access certain advantages if they decide to rent these properties and accept an affordable price. This measure is designed as a temporary occupation formula, for people having a level of income which does not allow them to access housing at market price”, explains Ised of Madrid.
New house.
As Fotocasa explains, a new home is one purchased directly from a property developer or construction company and, therefore, has not had a previous owner. The same goes for all these off-plan properties; that is, they have not yet been built.
Even if a new home has been built years ago, it will be considered new construction until it has been inhabited; Otherwise, it will become a second-hand house.
Second-hand housing.
Old housing, unlike new construction, has already had a previous owner other than the developer of the subdivision. In Spain, due to the lack of new construction built since the start of the real estate crisis, it is a highly sought-after product.
This situation of lack of supply and growing demand has brought the price of second-hand housing to levels above the records set by the market in 2007, according to Idealista.
Young rental bonus.
The youth rent bonus is a government initiative through which young people meeting a range of characteristics receive up to 250 euros to pay their rent for two years.
It is aimed at people aged 18 to 35 whose income is less than 3 times the IPREM. The rent ceiling is 600 euros per month and 300 euros for a room, although it can reach 900 and 450 euros respectively, subject to a series of conditions. Last October, the government approved a new appeal.
Land law.
The reform of the land law is one of the major demands of the sector. As explained, this reform made it possible to accelerate the construction times of large complexes, thus contributing to increasing the supply of housing available on the market.
This year, the Socialist Party presented a reform proposal that was validated by the sector, but the Popular Party distanced itself from it and the standard has not been approved for the moment.
Tenants Union.
The tenants’ union is the organizing platform of the demonstration which takes place this Sunday in Madrid. Although in Spain their role is very limited, in other countries, such as Sweden, they play a fundamental role in setting the price of social housing.
This weekend they will ask the government for greater involvement in housing, because they believe that the law approved a year and a half ago has not borne fruit. According to sources close to the organization, around 50,000 people are expected. The PSOE, for the moment, has not aligned itself with the protest.
Rent strike.
As its name suggests, a rent strike involves collectively stopping paying rent. In Spain, this right is not recognized by law, although tenants’ unions insist that it is a real possibility.
In Spain, there has been a major tenants’ strike in Barcelona over the years thirty. Nearly 100,000 people have stopped paying their rent in Barcelona.
Sareb.
The Banking Restructuring Asset Management Company was created in 2008 with the objective of recapitalizing several banking entities affected by the financial and real estate crisis that began in 2008. Its mandate is to manage and liquidate the depreciated assets of these entities and thus to repay the debt that Sareb issued, with the guarantee of the State, for its payment.
The entity will play a fundamental role at the end of 2024 and the beginning of 2025 in increasing actions available on the market. Thanks to the Vienna project, it will bring to market more than 3,700 affordable housing units distributed in 12 autonomous communities. During the aforementioned period, it will also prepare the sale of its developer Árqura Homes, which currently has one of the largest land reserves in the sector.
Map of Vienna.
The Vienna Plan is one of the most ambitious affordable housing projects in Spain. It will allow the construction of more than 10,600 housing units on land owned by Sareb, which will then be managed according to an affordable rent regime. This figure could be expanded in the medium term to reach 15,000 homes.
The first phase, which will be the subject of a call for tenders next fall, includes a selection of 50 finalist sites, on which some 3,770 housing units can be built. The lands are distributed in 39 municipalities with more than 10,000 inhabitants and located in 23 provinces of 12 autonomous communities. The planned investment in the first phase of the project amounts to more than 460 million euros.
Industrialized construction.
It is one of the sector’s big bets to respond in the short term to housing problems in Spain.
In an industrialized construction process, unlike traditional construction, most of the work is carried out in a factory, which helps reduce construction times.
The country’s major developers, such as Aedas Homes, already apply this type of process.
