What we can learn from Spain’s housing crisis

 A Financial Times Europe 3 Oct 2026 John Burn-Mur doch john.burn-mur doch@ft.com 

Although hous ing crises have been smoul der ing across much of the highin come world for a dec ade or more, they have gen er ally ten ded to rank some way down the polit ical agenda. That may be about to change, with reports sug gest ing Span ish prime min is ter Pedro Sánchez is con sid er ing call ing an early elec tion in a bid to resolve mount ing pub lic and polit ical dis con tent over spiralling rents and prices after his flag ship hous ing bill was rejec ted by par lia ment yes ter day. 

Mass protests were sparked recently by the case of 87-year-old Mari car men Abas cal. She was served an evic tion notice after her pre vi ously rent-con trolled flat was bought by a cor por ate land lord which sought to increase the rent to a level well above her income. Much of the anger has centred on the role of so-called “vul ture funds” in the rental mar ket — Sanc hez’s party has pro posed ban ning large-scale investors from buy ing homes until 2028. But if poli cy makers and ten ants alike want to see dur able improve ments and to avoid unin ten ded neg at ive con sequences, it’s worth tak ing a step back and look ing at what is, in truth, a much deeper prob lem, both in Spain and in other coun tries. Con sider the many recent cases in the UK and Ire land where pro test ers have sim il arly ral lied in oppos i tion to evic tions — often not by greedy cor por ate land lords but by local coun cils seek ing to move rent-con trolled prop er ties on to new low-income ten ants. These hap pen after the former ten ant passes away or moves out but their fam ily mem bers refuse to leave. 

The spe cifi cs of such cases are very dif fer ent but they all speak to the same prob lem: acute hous ing short ages. A land lord — whether the cor por ate or “mom-andpop” vari ety — increases rents only when they are con fid ent they will find someonewill ing to pay the higher price. The bid ding wars res ult ing from short ages provide fer tile ground. Spain has built fewer homes per cap ita than vir tu ally any other high-income coun try over the past 10 years. More than 50 per cent of its young adults now live with their par ents, up from 33 per cent in 2005, and rents have risen more steeply than almost any where else. The reason the chil dren of Brit ish and Irish social hous ing ten ants are des per ate to keep hold of the homes after ten an cies expire — and why wait ing lists for those cost-con trolled homes are so long — is the acute short age of prop er ties in these coun tries. The UK and Ire land each lack roughly one in seven homes they need to adequately house today’s pop u la tions. 

Spain’s prob lems are on both the sup ply and demand sides. Its house build ing crunch has coin cided with a pop u la tion boom fuelled in large part by a con scious effort by Sánchez to boost immig ra tion. On top of that, sur ging inflows of tour ists and digital nomads mean the mar ket-clear ing rent is often set not by local incomes but by those of afflu ent vis it ors.

 Court ing work ers and high-spend ing vis it ors from over seas is sound eco nomic policy, but it requires a joined-up approach on the sup ply side in the form of much greater house build ing — some of which could be fun ded through increased tour ist taxes. The gov ern ment’s pro pos als so far amount to a patch work of stick ing plasters that address some of the symp toms but not the under ly ing cause. Stronger pro tec tions for exist ing ten ants and bans on invest ment will not ease short age-driven pres sure on rents and prices. Nor will they house the mil lions of young adults whose lives and careers are on hold while they are forced to share a roof with their par ents. In this regard Spain may want to look to Ire land, where poli cy makers last year watered down rent con trols over con cerns they were con trib ut ing to weak rates of new con struc tion in the rental sec tor, exacer bat ing the under ly ing causes of the dis ease whose symp toms they were inten ded to treat. Fix ing hous ing crises is far easier said than done. If mount ing costs and worsen ing short ages were simple to reverse sus tain ably, they would not be afflict ing so many dif fer ent places with a wide vari ety of policy and eco nomic envir on ments. But to stand any chance of last ing suc cess, poli cy makers must ensure they go bey ond shal low and often counter-pro duct ive reg u la tions or select ive pro tec tions for those lucky enough to already be rent ing, and wrestle instead with the more chal len ging reforms that could put down ward pres sure on rents and prices for all and for good.