Landlords or the State: Who's Really Driving Up Rents?

Landlords or the State: Who's Really Driving Up Rents?

Is the landlord with two properties to blame for rent consuming your salary? This question resurfaces monthly, and the easy answer – labeling the small owner a "rent-sucking cockroach" – clashes with an uncomfortable detail. The numbers point elsewhere. The rental housing market is shrinking, and those responsible are not usually the ones complaining the most.

How Much Weight Do Large Funds Carry in the Spanish Rental Market?

Funds and companies are not the heart of the market. They represent less than 15% of the housing stock in Spain, according to current estimates. The rest is held by individuals, heirs, and small savers. This doesn't exempt large holders: the profile of entities from CaixaBank to Blackstone shows increasing concentration. And the sector itself signals a reversal: Blackstone, Cerberus, Ares, and Azora have put 25,000 rental properties up for sale. Just three years ago, the figure was different and less palatable: 60 billion euros invested by Blackstone in Spanish real estate. Capital enters when it's convenient and leaves when the legal framework no longer fits.

Why Many Landlords Stop Renting Out

Here's the part the official narrative omits. Buying to rent has become an exercise in fiscal patience. A specific case illustrates this: a half-finished property, repossessed by the bank, with structure and roof intact. VAT for not being a finished house, 21%. The expired municipal license, another 7%. Total, a 28% tax cost before moving a single tile. The deal fell through during the meeting with the bank.

The Flat That Stays Locked Up Tight

With this outlook, some owners have decided renting isn't worth it. Better locked than entangled. The effect is visible in any town: in a municipality of less than 5,000 inhabitants half an hour from Barcelona, there isn't a single flat for rent on the portals, but there is a neighborhood chat where people announce when a relative is looking for a place. It gets rented, of course. Only to acquaintances and with references. That's not a market; it's a favor among neighbors. And some people have a property sitting idle and have decided to keep it that way.

Intervene the Price or Build Like There's No Tomorrow

The proposed solutions are divided. One current argues that intervening rent only worsens things and that the key is for work to be profitable, citing the Nordic example: there, flats are also very expensive, but salaries hold up. Another points to land: rezone, simplify bureaucracy, and release thousands of homes. A third blames demand, arguing that the massive influx of population in a short time strains prices and wages, a thesis repeated without empirical support. All share one point: supply doesn't move on its own.

The Sparrow Plague

If the plan is to eliminate landlords to lower rent, it's worth recalling how the last major crusade against a plague ended. China declared war on sparrows to save its harvest. Millions were killed, insects ran rampant, and the grain ended up worse off. The equivalent here would be liquidating landlords without having built their public replacement. The landlord doesn't disappear on their own. What disappears first is the flat.