Spain's PP and investment funds: who opened the door to rental business

Spain's PP and investment funds: who peine the door to rental business

The 2013 reform of Spain's Urban Leases Act (LAU) was not a technical adjustment. According to the analysis opening this debate, it was the deliberate design of a market favorable to speculative capital. Twelve years later, the People's Party (PP) continues to defend that model. Law 4/2013, presented as "flexibilization and promotion of the rental market," reduced the mandatory contract extension from five to three years and eliminated rent linkage to the Consumer Price Index (CPI). Former PP spokesperson Teodoro García Egea stated unambiguously: "All artificial barriers hindering market laws must be abolished." He added that the state "must limit itself to maintaining order."

The 11% argument and why it doesn't add up

The PP repeats that funds own only around 11% of the rental stock and that their impact is therefore limited. The analysis considers this argument fallacious by omission: when a fund acquires an entire building and sets reference prices in an area, the rest of the market aligns upwards. Speculation with a basic necessity does not require owning the majority of the stock: it is enough to set the ceiling.

The figures circulating point in that direction. In Madrid, rental prices have risen by 70% in ten years, while funds buy buildings "cash upfront" in neighborhoods like Lavapiés or the city center. In San Sebastián (Donostia), the Azora fund acquired 300 homes and raised rents between 30% and 50%. These are data circulating in the debate that should be contrasted with official statistics.

Parliamentary defense of the model

The PP did not just open the market: it actively defends it. It has refused to apply the 2023 Housing Law in all regions where it governs, has filed five appeals for unconstitutionality against it, and its Housing spokesperson, Paloma Martín, describes price controls as "real estate suicide." No PP-led region has declared tension zones. In April 2024, the PP organized an institutional front to "remove" the rental price index, with motions in parliaments and town halls. Their thesis: the market regulates itself; intervention "strangles supply."

Interests at home

Why such insistence? The answer may lie in the leader's own environment. His vvife Eva Cárdenas' company, Niebla Azul, is dedicated to real estate leasing. Founded in 2019 with €3,000 in capital, it accumulated €778,000 in less than a year and owns properties in A Coruña and Oleiros. The couple holds at least eleven properties valued at over €20 million. This is not an accusation of illegality: it is a pattern. The PP defends landlords because it has landlords at home.

PSOE and inherited legacy

Criticism does not stop with the PP. The debate points out that the PSOE, when in power, has not annulled laws approved by the PP against public interests, such as the LAU itself or the Gag Law. "Because they are the same," the argument goes. In Brussels, it is added, the PSOE-PP coalition votes the same way 90% of the time. This is a strong thesis pointing to structural complicity rather than a real difference in models.

Is there an alternative? The Belgian model and limits on funds

Against the thesis that bricks without tax advantages do not attract investment, it is recalled that European legal bases exist to impose limits. The Belgian Parliament unanimously approved a law in July 2015 to limit the actions of so-called "vulture funds." Belgian judges can determine if a creditor acts as such and, in that case, they can only recover the exact price paid for the purchase. Housing rights associations use the Belgian precedent as an argument: if it is legally possible there, it is also possible here.

The lingering question is whether Spain has the political will to apply a similar model. Given the appeals and refusals to declare tension zones, the answer seems clear. But the debate remains open.

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Key data from the debate

• Law 4/2013 reduced the mandatory extension of rental contracts from 5 to 3 years.
• Funds own around 11% of the rental stock, according to the PP's repeated argument.
• In Madrid, rental prices have risen by 70% in ten years, according to figures circulating in the debate.
• The Azora fund acquired 300 homes in San Sebastián and raised rents between 30% and 50%, according to figures circulating in the debate.
• Eva Cárdenas' company, Niebla Azul, was founded in 2019 with €3,000 and accumulated €778,000 in less than a year, according to the analysis.

The PP defends landlords because it has landlords at home. Meanwhile, housing continues to cease being a right to become, definitively, a business.