Key aspects of the Housing Law.

The Law for the Right to Housing is the first law that develops the constitutional right to decent and adequate housing in Spain. It was approved by Congress on April 27, 2023 and is pending processing in the Senate. Its objective is to promote access to housing at affordable prices, protect vulnerable groups and combat real estate speculation. In this post, we are going to explain the key aspects of this law and how it affects landlords and tenants.

Promotion of public housing

One of the axes of the law is to increase the supply of public housing to guarantee its social function and prevent its sale to investment funds. To this end, the following measures are established:

• Indefinite qualification of protected housing to ensure a minimum period of 30 years of protection.
• Minimum percentage of 50% for rental housing within the reserve land for protected housing.
• Increase in the percentage of land reserves for protected housing, from 30 to 40% in developable land, and from 10 to 20% in unconsolidated urban land.
• Preparation and maintenance of an inventory of the public housing stock.

These measures are based on article 47 of the Spanish Constitution, which recognizes the right to enjoy decent and adequate housing, and on the State Housing Plan 2021-2025, which establishes the strategic lines to promote public housing.

Rental price limits

Another pillar of the law is to regulate the rental market to prevent situations of tension and abuse from occurring. To this end, the following measures are planned:

• Tax or urban planning benefits for privately owned homes with reduced rent.
• Declaration of stressed residential market areas for an extendable period of 3 years to be able to apply rent reduction measures.
• Maximum annual increase of 3% of rent in contracts in force during 2024.
• Starting in 2025, a new reference index for the annual update of lease contracts to avoid disproportionate increases in rent.
• In areas declared as stressed: possibility of extraordinary annual extension for the lessee after the end of the contract; limitation of the rent to the rent of the previous contract; possibility of applying the limits of the reference price index systems also to homes that have not been rented in the last 5 years.

These measures are inspired by article 47.2 of the Basic Statute of Public Employees, which establishes that Public Administrations will regulate and promote the necessary conditions to make effective the right to decent and adequate housing, and in article 10.1.b) of the Royal Decree Legislative 7/2015, which determines that Public Administrations may declare urban areas with a stressed residential market when exceptional circumstances occur.

Support for young people and vulnerable groups

The law also contemplates measures to facilitate access to housing for young people and vulnerable groups, such as the elderly, dependents or victims of sexist violence. Among these measures are:

• Extension of the minimum legal period for eviction due to non-payment of rent to six months from the date the legal claim is filed.
• Creation of the State Fund for the Right to Housing with an initial endowment of 1,000 million euros to finance public policies on housing.
• Creation of the Social Rental Bonus with an initial endowment of 500 million euros to subsidize part of the rent for people with incomes below the IPREM (Multiple Effects Public Income Indicator).
• Creation of the Social Purchase Bond with an initial endowment of 300 million euros to facilitate access to property for young people under 35 years of age with incomes less than three times the IPREM.
• Creation of the State Program for the Right to Adequate Housing with an initial allocation of 200 million euros to promote actions aimed at improving housing and energy conditions, as well as accessibility and functional adaptability, especially in rural or unpopulated areas.

These measures are based on article 9.2 of Royal Legislative Decree 7/2015, which establishes that Public Administrations will ensure effective compliance with the constitutional principle that obliges public powers to promote the necessary conditions to make effective the right to decent housing. and adequate, as well as in article 50.1.a) of the same legal text, which determines that Public Administrations will adopt specific measures aimed at facilitating effective access to decent and adequate housing by the most disadvantaged social sectors.

Conclusion

The Law for the Right to Housing represents a historic advance in the recognition and guarantee of the constitutional right to decent and adequate housing. The regulation aims to respond to the housing needs of citizens, especially the most vulnerable groups, through measures that favor access to public housing, limit the price of rent and financially support those who need it. The law also seeks to combat real estate speculation and protect the rights and obligations of both owners and tenants.

Sources

: Spanish constitution. https://www.boe.es/buscar/act.php?id=BOE-A-1978-31229
: State Housing Plan 2021-2025. https://www.mitma.gob.es/el-ministerio/biblioteca-virtual/vivienda/plan-vivienda
: Basic Statute of Public Employees. https://www.boe.es/buscar/act.php?id=BOE-A-2007-7788
: Royal Legislative Decree 7/2015. https://www.boe.es/buscar/act.php?id=BOE-A-2015-11719