That rental price constraints were not liked by the vast majority of real estate is no secret. For months, companies have shown their opposition to regulating the market in this way. Until now they did it with a certain mute, waiting to see what would come out of the negotiations between the two government partners. But the announcement of a new agreement and the details that are already known have raised a wave of practically unanimous rejection, which is expected to grow as the draft of the future law is known.
For Asipa (the Association of Real Estate Companies with Rental Assets, which groups together large companies that own thousands of homes), the development of a housing law represented “an ideal opportunity to reach a large sector pact on housing”. But he criticizes that “it has ended in a package of populist and unconstitutional measures.” The future regulation has established a differentiation between private owners and companies with more than 10 homes, so that the latter will see limited prices that they can put in the so-called stressed areas. “Using the concept of a large landlord is not only discriminatory and unfair”, Asipa values, “but it is a joke to citizens by being used to divert the responsibility of administrations in their inaction to plan and attend to the housing needs of the families most in need ”. For this reason, the association concludes that the rule is “ineffective” because “it does not attack the root of the problem: the shortage of housing supply for rent.”
This argument, that of the imbalance between supply and demand that causes price growth in large cities, is a mantra in the sector and appears in almost all the communications and evaluations sent by the companies since the coalition government pact was known. . The Fotocasa portal, for example, sees “positive the measures that aim to reactivate the market” and praises the tax incentives for small owners or the announcement of a youth voucher, which will be articulated as a direct rental aid of up to 250 euros for people between 18 and 35 years old with low income.
But Fotocasa also warns that the price freeze (while an area is considered stressed, the tenant will have the right to extend the contract under the same conditions) is “an interventionist measure that does not have the approval of the landlords, which could be reflected in the contraction of the supply of housing for rent ”. And on the price limits for large owners, he considers that “it could generate legal insecurity.”
Prices down
Francisco Iñarreta, spokesperson for Idealista, highlights that the price limitations “have already been tested in other markets such as Catalonia and have not worked”, so they mean “transferring a local error to the entire State.” The spokesperson for the real estate portal maintains that rent control “has led to the disappearance of 40% of the supply available in the city of Barcelona.” “Taking advantage of the approval of budgets for one year to carry out a law that will affect a decade is a serious mistake,” he adds. And he concludes: “The pandemic has shown us, within its harshness, that the best recipe for reducing prices is to significantly increase supply.”
The director of Studies of Pisos.com, Ferran Font, also resorts to the circumstances of the pandemic to remember that “in large capitals they are already experiencing very significant price drops for months.” And it emphasizes that “the management of the limitation of prices will fall to the autonomous communities”, which will be the ones that request the declaration of stressed area, on which he doubts “how this definition will be managed”. The rent freeze is for the portal expert “a very ineffective practice in markets similar to ours”, as well as putting limits on rents.
José Ramón Zurdo, general director of Agencia Negociados del Alquiler, a company that mediates between owners and tenants, sees it as “a serious mistake to attack large owners, who are the ones who generate and can immediately generate more available housing supply” . Zurdo considers that limiting rents “goes against free competition and market freedom” and questions whether the official government price index will be used for this: “There is no tool to measure, professionally and honestly, the so-called stressed markets ”. In the intention that the City Councils recharge up to 150% of the IBI to the empty houses, he sees “a confiscatory measure” that will result, like other announced measures, in an “increase in conflict.
The announcement that in the new developments a minimum of 30% of protected housing will be required is not liked by some representatives of the sector either. Daniel Cuervo, general secretary of the Association of Construction Promoters of Spain (APCE), argues that “most new construction projects for sale are not viable with this measure.” “This means that 70% of the promotion that is not protected will become more expensive and will pose a problem for young people and other families who are buying a house and who, with that increase, will not find it possible to access housing. give the budget ”, abounds. Cuervo recalls that this measure was approved in Barcelona and had the effect of a significant “stoppage” of construction activity and investment.
Tenants ask for more measures
Different is the assessment of the new law that is made in the tenant unions. The Sindicat de Llogateres de Catalunya, which was behind the Catalan rule that limited prices a year ago and has recently participated in the presentation of a state rule in Congress supported by Podemos and other left-wing groups, believes that the agreement brings the objective closer to “shield the regulation already in force in Catalonia and ensure that it is extended to the entire State.” But he warns that “it is insufficient” and “there is still a long way to go.”
In a statement released this Wednesday, the organization values as “essential” to protect the law already in force in Catalonia (which is being challenged in the Constitutional Court by the Government itself and by the opposition) and to make price regulation “automatic in all municipalities in which there is a tense market situation ”(currently that declaration depends on the request of each autonomous community, which makes it difficult to think that it will apply where the PP governs). The organization also makes it clear that there are aspects of the regulation that it does not like, such as that the price limits do not affect individuals, even if they have more than 10 properties, and assures that it prefigures a scenario in which it will not be possible to apply the reductions in Mandatory prices up to 18 months after the approval of the law (scheduled for the second half of 2022). Nor does he agree on tax credits for private landlords because “it would imply a direct transfer from society as a whole to households with the highest incomes and it is not clear that it will help lower prices.”
Outside the real estate field, the announcement has been welcomed in politics with the expected rejection of the opposition and the satisfaction of the Government partners. The mayor of Madrid, José Luis Martínez Almeida (PP), has indicated that the capital does not plan to apply the IBI surcharge to empty housing, while the mayor of Barcelona, Ada Colau (Barcelona en Comú), has been one of the more effusive in celebrating the agreement. Also the CC OO union, which together with the UGT had asked for the regulation of housing prices, considers the pact “very positive”.