Tenerife: Unaffordable Rents Force Workers Into Shantytowns

Tenerife: When a Job No Longer Prevents Homelessness

How much must rent rise before a precarious salary fails to cover even a shack? In southern Tenerife, the answer is written in the form of settlements. The problem isn't just for vulnerable families; it affects wage earners who cannot afford rent or lack stable contracts to sign one. The island has over a million inhabitants—including floating population—across 2,000 square kilometers, with much of the land unbuildable due to geography or administrative decisions. The result: substandard housing, hotels for tourists, and queues for everything else.

Rents That Devour Salaries

The initial complaint is specific: rents are impossible to pay "not only by vulnerable families but by working families with precarious wages," often unable to rent due to contract insecurity and low salaries. This isn't classic social exclusion. It's an issue of working people who can't make ends meet if they pay rent. And when they can't, the alternative isn't a smaller apartment: it's a shanty, a squat, or the street.

The most repeated diagnosis points to supply. Tenerife doesn't lack housing in the abstract; it lacks land to build on. Some summarize it bluntly: the island doesn't lack homes, it lacks land and has too many people. Municipalities, according to several accounts, operate like a mess: all obstacles and administrative silences, even for business warehouses on urban land included in planning schemes. Uncertainty deters investment, and stock doesn't grow.

Supply and Demand, Island Version

The liberal argument also has its place. If demand has been depressed for a year and prices remain static, something is wrong with the mechanism. Some mock the Law of Supply and Demand, noting that Lenin is always blamed. They say Madrid will build thousands of homes in new developments the size of Santander, and with such supply, prices will fall. Sure. Sure.

The data deflating optimism: of all planned developments, there are 45,000 homes for 2025, just 1% of the stock. If that seems like a lot, fine. But in Madrid, apartments last days on real estate portals, and 20% don't last 24 hours. Until scarcity is visible, supply won't move. And increasing supply, according to this view, is considered right-wing.

Airbnb, Tourists, and Workers Who Can't Live Where They Work

Tourist housing appears in almost every explanation. Many homes are dedicated to tourists, the islands are saturated, and then there's no housing for workers. The solution proposed from that side is to ban tourist housing, not to build more shacks. Some go further, demanding attacks on demand: tourists to hotels or declared licensed monthly rentals, and less demand overall. Others counter that price caps don't work and landlord legal certainty isn't the bottleneck: the bottleneck is the chronic collapse of courts.

The effect is already felt in employment. According to CEPYME (Spanish Confederation of Small and Medium Enterprises), labor shortages are stalling growth because shack prices hinder labor mobility. Ibiza is already running out of waiters, doctors, police officers, and firefighters. No one wants to work where rent eats their salary. And those already there are considering quitting.

Evicting Shanties as Housing Policy

The scene closing the circle: evictions of shanty towns in the Canary Islands are being denounced. It's unprecedented. The official solution, in practice, is to evict substandard housing without first resolving the housing shortage. The predictable outcome is that people evicted from a shanty don't move into an apartment: they move to another shanty, or to the street.

Some argue settlements will become unsafe and things will get worse. Others respond that the problem is multifactorial and that the credit bubble and Sareb (Spain's asset management company) also play a part. And some recall that the housing crisis occurs in almost all Western countries, with laxer or stricter laws, and that when construction was highest and rental regulation lowest, rents kept rising. That uncomfortable fact fits neither trench.

Meanwhile, surgeons share flats in Madrid because rent takes most of their salary. You specialize, take responsibility for operating on a human being, and the profit goes to a landlord whose only merit was signing a mortgage. If this happens to a surgeon, what about a waiter in southern Tenerife?

The solution, some say, is to make shanty land buildable. Market nonsense: everything is tightly controlled so the poor suffer while elites cash in. They might be right. Or maybe, as always, it's Lenin's fault.