Spain’s government requires monthly justification for short-term rentals

The plan against short-term rentals relies on neighbors

Does a voting portal fix rental prices? The plan presented by the Government in early July 2024 aims to turn tourist flats into an economic activity requiring explicit approval from the homeowners' association. Pedro Sánchez announced this on Cadena SER, asking if the Horizontal Property Law can curb tourist flats, promising measures to address housing price hikes. The Housing and Social Affairs ministries will take this proposal to a working group with unions, tenants, and employers.

The declared goal is twofold: halt vacation rentals and bypass short-term rentals, a one-to-three-month formula used to evade existing restrictions on tourist apartments. The key question is whether a regulation designed to order usage can also cool down rental prices that have been soaring.

What changes for tourist flats with the Horizontal Property Law reform?

The key modification affects the building's core: the horizontal property regime. Vacation rentals would be considered economic activity, requiring explicit authorization from homeowners' associations. Without this permission, owners can sue those installing tourist flats. This shift from municipal to neighborhood control aims to bypass mayors who indiscriminately approve permits, leaving decisions to residents.

The second piece is a national registry hosted on a Ministry of Housing platform. Only properties justifying their license or rental capacity under EU regulations could operate. This registry aims to close loopholes where many properties currently abusa municipal norms.

Why justify short-term rentals monthly?

Because it was an escape route. Short-term leases of weeks or months had become a refuge for former weekend homes, and the proposal requires proving the causality of the contract. Renting to a researcher requires showing the research contract; renting to students requires justifying the school term. The logic is simple: without cause, no short contract. With cause, the contract stands.

The underlying context is not calming. In Madrid, rental prices rose by 15% in the year prior to the announcement, a figure the Executive used to justify urgency. The question remains whether this 15% is due to short-term rentals or something broader.

Lack of supply or hoarding? The data that confounds both sides

Disagreement is stark. One analysis argues the problem is quantity: lack of housing, population growth outpacing administration plans, and touching short-term rentals is a patch on a hemorrhage. The other argues supply exists but is withheld and concentrated. Barcelona's numbers are the most cited: the city grew from 1,621,537 inhabitants in 2009 to 1,655,956 in 2023, a 2% increase, while rental stock doubled from 106,000 to 230,000, a 116% rise. These figures suggest demand alone cannot explain the bubble.

Another data point points in the same direction: 14% of Barcelona's housing is held by 2,600 landlords, with fourteen owners, mostly companies, holding over 300 units each. Proponents conclude the problem is not building more but regulating hoarders. The counterargument is that empty housing is minimal, due to reasons other than hoarding, and administrations have done nothing to release it. The dispute is about what is measured and by whom.

Legal certainty or landlord risk: the other argument

A third view holds that without landlord protection, there is no viable supply. The reasoning is that hundreds of thousands of small landlords keep properties off the market because costs and risks fall on them, and fiscal and legal incentives—not penalties—would bring them out of the shadows. The rebuttal is sharp: the State does not guarantee private business profitability, and those who cannot assume risk can sell.

Amidst this is a warning: every market intervention since 2017, critics say, has been accompanied by price hikes. Tourist saturation provides the field example. In Canary Islands, with Fuerteventura cited, tourist flat density is described as unsustainable for residents, making the Government's measure necessary though perhaps short. In Barcelona, it is claimed that tourist flats are already losing value after license withdrawals.

The plan, however, has not settled the fundamental question: whether touching short-term rentals alone is enough to lower bills.