“From Public Housing Sales to Tourist Rentals” Spain’s Housing Crisis Deepens as Tenant Anger Erupts Despite Tighter Regulation

Housing insecurity intensifies in Spain as large investors gain influence and rents climb
Short-term tourist rentals proliferate, fueling tenant protests and eviction disputes
Government tightens regulation, but court rulings and parliamentary opposition limit its impact

Spain’s housing crisis is deepening. As private landlords, including private equity firms and real estate investment companies, gain influence, the spread of short-term tourist rentals and a shortage of housing supply are driving up rents and other housing costs. The Spanish government has responded with a succession of measures, including rent caps, restrictions on evictions, short-term rental rules and enforcement against online platforms. Some measures have failed to clear legal or parliamentary hurdles, however, limiting their effect on housing costs.

Protests Spread Across Spain

According to a Financial Times (FT) report published on Sept. 27 (all dates local), tens of thousands of Spaniards marched through central Madrid the previous day, demanding lower housing costs and stronger tenant protections. The immediate catalyst was the eviction of María del Carmen Abascal, an 87-year-old tenant. Abascal was removed on Sept. 23 from the Madrid apartment where she had lived for 71 years. Video showing police breaking down her door and Abascal being carried away on a stretcher spread across Spain. Having lived in the property since 1956, Abascal had paid $569 a month under rent-control rules. The real estate investment company that became the apartment’s new owner, however, challenged whether a lease in her father’s name could pass to her and sharply raised the monthly rent to $3,015.

Spain saw protests of a similar kind in May. According to the Associated Press, thousands of demonstrators in central Madrid carried banners bearing slogans such as “We want neighbors, not tourists” and demanded government action on housing. Their complaint was that landlords in major cities were pursuing tourism revenue by concentrating on short-term accommodation for visitors, sharply reducing the supply of homes for residents and pushing rents beyond what many could afford. Eurostat, the European Union’s (EU) statistics agency, estimates that housing costs in Spain rose by about 13% last year.

Origins of the Rental Housing Dispute

Disputes over Spain’s rental housing market date back to the 2008 global financial crisis. The collapse of the property bubble and the ensuing recession left a growing number of households unable to own homes, shifting Spain’s traditionally owner-occupied housing market toward renting. According to the Bank of Spain, the share of households living in rental housing rose from 13.5% in 2011 to 16.1% in 2021. Among households aged 30 to 44, the share renting increased by 17.8 percentage points between 2007 and 2025, reaching 37.1%.

Large investors subsequently acquired properties whose values had fallen after the crisis. One prominent example was Madrid’s disposal of public housing in 2013. Facing financial difficulties, the city-owned housing agency EMVS sold 1,860 social housing units to a Blackstone-linked buyer for $146.2 million. That same year, a housing agency under the Madrid regional government transferred another 2,935 social housing units to a Goldman Sachs–Azora consortium. Together, the two transactions put 4,795 public housing units in private investors’ hands. Tenants in some Blackstone-acquired properties later protested tighter rental terms during lease renewals, while Madrid’s audit body raised questions about the transparency and pricing of the 2013 sale.

Table 1. How Spain’s Rental Housing Dispute Developed

Pandemic Deepens Market Turmoil

The COVID-19 pandemic sharpened these conflicts. When Spain entered a nationwide lockdown in March 2020, business closures, job losses and furloughs spread across tourism, hospitality and food services. Cases of tenants unable to pay rent on time surged as incomes disappeared. In a survey conducted by the European Foundation for the Improvement of Living and Working Conditions in April and May 2020, 11% of Spanish respondents said they could not pay their rent or mortgage, a figure that rose to 23% among unemployed respondents. Seven percent expected to leave their current homes within months because they could not afford the costs.

The figures also show the extent of the problem. According to FIM, a Spanish rental-arrears information provider, the rent delinquency rate reached 12.2% in May 2020, at the peak of the first COVID-19 wave. From the third week of September through the end of November, when restrictions on business activity tightened again during the second wave, reports of arrears rose by 68.5%. The share of rental contracts under FIM’s monitoring that experienced payment problems climbed to 5.9%. As tenants’ ability to pay deteriorated, disputes over rent reductions and payment deferrals also rose sharply between tenants and the large landlords that had bought substantial amounts of public housing and lower-priced property after the financial crisis.

Spanish Government Steps Up Regulatory Overhaul

Against this backdrop, the Spanish government has progressively tightened rental-market regulation to ease housing costs. The pandemic marked the starting point. In March 2020, the government suspended evictions of vulnerable tenants whose incomes had fallen sharply and introduced emergency protections, including lease extensions and rent-payment deferrals. The eviction moratorium, initially introduced as a temporary measure, was subsequently extended several times and remains in place until the end of this year for vulnerable tenants who meet specified conditions. An exemption added this year excludes small landlords owning no more than two homes from the eviction suspension.

In 2022, the regulatory focus shifted to rents themselves. After prices surged following the outbreak of the Russia–Ukraine war, the Spanish government limited annual increases on existing residential leases to around 2% in 2022–2023, then adjusted the cap to 3% in 2024. Spain’s first national housing law, the Housing Rights Law, followed in May 2023. Under its central provisions, regional governments can designate an area as a “stressed housing market” if housing costs exceed 30% of household income or if home prices or rents have risen by at least 3 percentage points more than consumer prices over the preceding five years. Rents on new leases in such areas are linked to the previous lease’s rent or a government reference price. Homes owned by large landlords can be subject to a reference-price ceiling, while tenants may extend existing leases for up to three additional years under specified conditions.

Enforcement Intensifies at the National Level

More recently, the government has widened regulation amid concern that short-term tourist rentals are displacing homes intended for long-term residents. In late 2024, it introduced a digital single-window system and a registration scheme for short-term rental information. Since April last year, establishing a new tourist accommodation unit in a multi-owner residential building has required the approval of at least three-fifths of both the owners and ownership shares. That same month, the government abolished the so-called “golden visa” scheme, which had granted residency rights to foreign investors purchasing property worth at least $568,900. Key provisions of the nationwide single-registration system for short-term rentals were invalidated by Supreme Court rulings in May and June this year, leaving only parts of the system in place. An emergency decree implemented in March would also have extended expiring leases for up to two years at a tenant’s request and capped rent increases by large landlords at 2%, but the measure was discarded after failing to win parliamentary approval.

Enforcement has also intensified to curb landlords’ pursuit of excessive tourism revenue. Since late 2024, the Spanish government has initiated sanction proceedings against online platforms advertising tourist accommodations without permit numbers. In May last year, it ordered the global home-sharing platform Airbnb to block 65,935 tourist-rental listings that violated regional rules. Following a court decision, Airbnb removed approximately 65,000 listings in July last year. It was also fined $72.8 million late that year for carrying advertisements for unlicensed tourist accommodation and related violations. Enforcement intensified further after the display of official registration numbers became mandatory for tourist and seasonal rentals in July last year. From last year through the end of March this year, more than 100,000 tourist and short-term rental listings were removed from the relevant platforms.