The new housing law one year on. TOTAL DISASTER FOR TRADITIONAL RENTING

# The Housing Law: A Year of Failure

Today marks one year since the approval of Law 12/2023, of 24 May, on the right to housing. This legislation promised to bring important changes to the housing market, especially in the field of landlords. However, reality has shown that it has only contributed to the disappearance of rental supply and an increase in prices, generating mistrust among thousands of homeowners. This article not only highlights the mistakes and negative consequences of this law, but also criticises the ineffectiveness of the government in dealing with such a crucial problem for citizens.

### A Year of Empty Promises and Disastrous Results

The Housing Rights Act was passed with the promise of stabilising prices and increasing the supply of rents. However, the implementation of this law has turned out to be a disaster. According to experts consulted, the supply of rents has become volatile and prices have reached peak levels. Far from normalising the situation, the law has exacerbated existing problems, leaving thousands of people in an even more desperate situation in their search for housing.

### A Legal Expectation

‘The main consequence of the Housing Law has been the enormous amount of time and resources spent by the real estate sector in denouncing its pernicious effects and trying to convince the government of the need to modify or even repeal it,’ points out Mikel Echavarren, president and CEO of Colliers Spain & Portugal. According to Echavarren, the law has been more an attempt to capture votes through simplistic measures than an effective solution to a complex problem.

The Bank of Spain and numerous professionals in the sector have already warned about the negative effects of this law, which have included an increase in insecurity and risks for landlords. The regulation has unfairly singled out landlords as being to blame for a problem they have not created, while the real root of the problem – the lack of supply – remains unaddressed.

### Catalonia: A Laboratory of Failure

Catalonia has been the only region that has significantly implemented the measures proposed by the law, such as the declaration of stressed areas. However, this implementation has resulted in a runaway rental market, with decreasing supply and rising prices. Carles Sala, spokesperson for the APIs of Catalonia, stresses that housing accessibility has not improved at all. In fact, the situation has deteriorated significantly.

The supply of regular rentals has decreased by 15% in the last year, while temporary rentals have increased by 56%. This change in the market not only reflects landlords’ distrust of the new regulation, but has also made available housing even more expensive. In cities like Barcelona, the supply of seasonal rentals already represents 30% of the market, an alarming figure that shows the magnitude of the problem.

### Economic and Social Consequences

José Ramón Zurdo, director general of the Rental Negotiating Agency (ANA), points out that the reduction in rental supply has led to a significant increase in rents. This increase not only reflects the limitations imposed by the law, but also the greater risks that landlords have to assume. Legal uncertainty and the spread of populist measures, such as the ban on evictions, have deepened the sense of hostility towards private investment in the rental market.

The Observatorio del Alquiler de Alquiler Seguro forecasts a loss of 60,000 homes in the rental market this year, with Catalonia being the worst affected region. This mismatch between supply and demand has led to an increase in the average rental price in Spain, which has already reached historic levels.

### The Government’s Hypocrisy

Despite the disastrous results, the Government continues to study formulas to regulate seasonal rentals and other types of landlords that have been left out of the regulation of the Housing Law. This lack of vision and the continued implementation of counterproductive measures only aggravates the problem.

Francisco Iñareta, spokesperson for idealista, points out that legislating with landlords’ backs turned only destroys the market. The law has shifted the supply from permanent rental to seasonal rental, making access to housing even more difficult for the most disadvantaged people. The root of the problem is not prices, but the huge shortage of supply, which creates tensions and anxiety for families.

### An Uncertain Future

The recent ruling of the Constitutional Court, which upholds a large part of the Housing Law, only increases concern in the sector. The legal uncertainty created by the regulation has led to a retraction in the supply of rentals at the national level.