Ibiza’s Housing Crisis Expels Workers and Paralyzes Services

Ibiza: Housing crisis expels workers and collapses services

Ibiza does not have a housing problem: it has a problem with people who cannot afford it and public services that are failing due to staff shortages. In May, there were more than a thousand unfilled job offers in the Pitiusas, some with salaries exceeding 3,000 euros —cooks, drivers, site managers—. Many went unclaimed because those reading them calculated the rent and got off the boat before disembarking. The exorbitant price of housing in Ibiza has become the biggest headache for the islands’ business owners. The result is an island losing both workers and services.

Transport, Post Office, and civil servants: services that are failing

The General Directorate of Traffic is the most cited case. An office designed for 15 people had only 11 in December of the previous year, and that was its best moment. Transfers and mandatory leave forced it to close one day a week; in May, it was open only on Mondays and Wednesdays mornings. With 80% of posts unfilled, the Burgos Headquarters had to take over much of the workload, users insulted and threatened staff, and by mid-September, window service was discontinued. One examiner took leave due to anxiety. The Post Office was no exception: the Sant Francesc office in Formentera stopped opening in the afternoons from July, and in Ibiza, of the 130 existing positions, between 25% and 40% are vacant throughout the year.

In security forces and among teachers, the mechanism is different, but the outcome is identical. Positions are filled because the destination is mandatory at the start of a career, and they become vacant as soon as the civil servant or teacher can request a transfer to a place where their paycheck allows them to live. In healthcare, the Can Misses Hospital staff residence is the exception, and it is not even considered a stable solution. Some observe the same pattern in Madrid with groups like doctors: anyone earning a decent paycheck is unwilling to hand over most of it to their landlord.

Trucks parked and workshops without hands

The problem is no longer just about hotels and administrations. Up to 25% of the Pitiusas freight fleet is grounded due to a lack of drivers, and mechanical workshops have joined the list of sectors that did not know this problem until recently. Private companies have improvised what the administration does not do: many provide housing for their employees and deduct rent from their paychecks. Large hotel chains started this, with their own facilities to house staff, and today it is common practice among small and medium enterprises. Alsa even offered housing by paying part of the rent to recruit 22 bus drivers for the summer.

The paradox is that tourists continue to arrive. Terraces are full; what is missing is who serves them.

Who is buying the island: the individual or the fund?

Here, any consensus breaks down. One current points to the owner with an inherited apartment priced at gold. Another argues that the true owner of the land is foreign capital, and no one stops them. The year’s numbers point to the latter: hotel investment in Spain reached 4.1 billion euros in 2023, with more than 180 hotels changing hands, and operations like the purchase of Barcelona’s Mandarin Oriental for slightly over 200 million, at a rate of nearly 1.7 million per room. When money enters from above, room prices do not go down.

The Balearic Housing Minister, Marta Vidal, stated that 90% of tourist rental supply is illegal. Fevitur spokesperson, María Gibert, replied that the figure should refer to the metropolitan areas of Palma and Eivissa. Translation: no one acknowledges their share of the pie.

Regulating tourist rentals: what is asked and what is antiestéticared

Recipes on the table range from limiting the number of properties per person and banning purchases by investors —read by some as a frontal attack on private property— to tax cuts and reduced public spending. In between circulates a simple calculation: with rents of 2,000 euros, salaries of 4,000 are needed, or the worker leaves. And a more uncomfortable idea: that much of the increase is not caused by the individual with an apartment, but by inactive companies buying entire blocks.

Owners of tourist-use housing requested the Ministry’s participation in regulating short-term rentals, while unions and tenant organizations were already summoned. The regulation was expected for 2024. No one knows with what content.

What is coming

The island may adjust itself through the ugly path: fewer workers, fewer services, fewer tourists, and hopefully, more reasonable rents. The opposite may also occur —that money continues to enter from above, that those who hold on earn more, and that those who cannot hold on leave— and then Ibiza will be an excellent destination to visit and an impossible place to live. The only prediction that holds is that the bill for the party will ultimately be paid by someone who was not invited.