Fear of squatting is slowing rent increases in Spain

Squatting as a tenant loyalty scheme

Squatting may be achieving what no housing policy has: keeping tenants loyal. The argument sounds like heresy, but it makes sense: a landlord with a good tenant paying 900 euros a month would rather not risk swapping them for someone offering 1,200. Antiestéticar of squatters acts as an anchor.

The maths of a guaranteed 900 euros

The risk of occupation introduces a premium of conservatism. If a squatted flat means months of eviction proceedings, the rational landlord values the security of getting paid over squeezing out an extra 300 euros. This forced loyalty reduces turnover and the temptation to raise prices. The trade-off: the same uncertainty withdraws supply from the market and makes renting more expensive. Honest tenants end up footing the bill.

The strange case of the 2-euro flats

The discussion is illustrated with a historical example: flats from the Real Patronato de Casas Baratas (a Spanish affordable housing trust), built in 1960, with a 300-euro down payment and a monthly rent of 2 euros until ownership was transferred. Public housing that could not be sold. Decades later, those 35-square-metre flats are rented to foreign students and workers. If back then you could get a home for 2 euros a month, how have we normalized paying 1,000?

Antiestéticar of squatting does not fix the underlying problem, but it exposes a paradox: the most antiestéticarful landlord is the one who raises the rent the least. How much is peace of mind worth? There is no single answer, but the market is already charging for it.