Context: The eviction of 87-year-old María del Carmen Abascal from her Madrid home after a sharp rent increase triggered nationwide protests demanding affordable housing, stronger tenant protection and restrictions on investment funds purchasing residential properties.
How Severe Is the Housing Crisis?
- Sharp rise in rents: According to property portal Idealista, rental costs in Spain rose by an average of 84% over the preceding decade. Increases reached 113% in Málaga and nearly 150% in Marbella, while incomes failed to keep pace.
- Declining affordability: Spain’s average gross monthly salary is approximately €2,460. In September, a 50-square-metre apartment in Madrid cost around €1,170 per month—nearly half the average gross monthly salary.
- Housing shortage: The Bank of Spain estimated a shortfall of approximately 750,000 homes, potentially increasing by another 300,000 between 2026 and 2028, taking the deficit beyond one million.
- Public protests: Tens of thousands protested nationwide, demanding lower rents, stronger tenant protections and restrictions on investment funds purchasing housing.
Why Is Spain Facing a Housing Crisis?
- Inadequate housing construction: Between 2021 and 2025, Spain added approximately 1.2 million households, driven partly by migration, but constructed fewer than 500,000 homes. The 2008 global financial crisis and subsequent Eurozone crisis weakened the construction industry; the COVID-19 pandemic increased building-material costs, while political disagreements constrained construction initiatives.
- Tourism and short-term rentals: The conversion of residential properties into tourist accommodation reduces the housing available for long-term residents. Spain’s Ministry for Consumer Rights ordered Airbnb to remove approximately 66,000 unlicensed listings, but local residents argue that enforcement remains insufficient. Madrid’s tenants’ union estimated that over four million homes and 400,000 vacation rentals were empty.
- Investment funds and rising rents: Investment funds purchase available residential properties and increase rents, sometimes sharply. Prime Minister Pedro Sánchez’s government has termed such investors “vulture funds”. The eviction of María del Carmen Abascal illustrates how ownership changes and rent increases can displace long-term tenants unable to afford market rates.
- Limited public housing: Government-owned rental housing accounts for less than 2% of Spain’s total housing stock, placing the country towards the bottom of OECD countries on this measure. Madrid has only around 10,000 public housing units for its 3.5 million residents, forcing many households to depend on the private rental market.
- Impact on young people: High rents and limited affordable housing delay independent living, with many young adults leaving their parents’ homes only after turning 30.
How Has the Crisis Affected Sánchez’s Government?
- Defeat in Congress: On October 1, Spain’s Congress rejected two emergency decrees proposed by Sánchez to address the housing crisis, exposing the government’s difficulty in securing parliamentary support.
- Snap general election: Following the defeat, Sánchez called a snap general election for November 29, earlier than the election originally expected before the end of the following summer. He is seeking to make housing affordability a central electoral issue.
- Political contest: The Spanish Socialist Workers’ Party faces the conservative People’s Party (PP), the far-right Vox party and the pro-independence Catalan party Junts. A Vox victory would raise the possibility of Spain having a far-right party in government for the first time since the death of dictator Francisco Franco in 1975.
Measures and Policy Challenges
- Tenant protection: Sánchez’s proposed emergency decrees sought to strengthen protections for tenants, although Congress rejected both on October 1.
- Regulation of tourist accommodation: Action against unlicensed short-term rental listings seeks to address the diversion of housing into tourism, but enforcement and the availability of alternative accommodation remain important challenges.
- Expanding affordable housing: Addressing the estimated housing deficit requires increasing construction, strengthening public and affordable rental housing, and ensuring that housing supply keeps pace with household formation.
- Balancing investment and housing access: Policy must address excessive rent increases and speculative pressures while considering the role of private investment in financing housing development.
