Local Solutions for a Global Problem

In a recent blog I discussed some of the issues behind the anti-tourism protests emerging in many of the most visited locations across Europe and further afield in 2024. The figures help explain the concern. It’s reported that 20,000 properties in Lisbon have moved from the residential sector to tourism lets in just five years. Meanwhile, in Spain, there are 10,000 licensed tourist lets in Barcelona, 9,000 in Málaga, around 5,000 in Valencia and 13,500 in Madrid.  

However, it’s not just the numbers. Firstly, it’s accepted there are lots of unlicensed properties so the actual numbers are probably much higher and nobody really knows the true figure for sure. In addition, they’re not spread evenly throughout the market so while it’s true to say that licensed properties in Barcelona represent only 1% of the total housing market what makes it a problem is they are all crammed into a relatively small area in the heart of the city. The historic city centre of Málaga is where the majority of tourist lets are located, in an area amounting to about 3km², the rest of the city is relatively untouched. So it’s disingenuous to say tourist lets are only a small part of the total market so why make it a big deal. If they were spread evenly throughout the total housing stock nobody would notice them but they’re not.

In this blog I’m looking at solutions, some already in place and others in the pipeline. It’s a a complicated picture. Tourism lets were specifically excluded from Spain’s Ley de Arrendamientos Urbanos (LAU) in 2013 when responsibility for legislation in respect of tourist lets was devolved to the autonomous regions. As a result, the pressure to find the appropriate local solutions best suited to their specific problems is on the regional, provincial and municipal authorities. In my view this is where they should come from. Different places have different requirements not all localities are in the same position and flexibility is a good thing.

Different local approaches were apparent even prior to 2013 as several regions already had some controls in place and of the main tourism regions only Andalucía had no controls on the short term holiday market at all.  But Cataluña, Mallorca, Valencia and the Canary Islands all did although enforcement wasn’t the greatest and this, over the years, has been a factor in soaring numbers.

Right from the off, Barcelona was the city with most controls, starting off with a licensing system which quickly moved to bans on new licences in certain zones. Now the city is aiming for a total ban on short-term holiday lets from 2028. However, there are so many buildings in Barcelona already 100% for tourist lets, around 200 is one estimate I’ve seen, I’m thinking that many will get converted into aparthotels as a way around a ban, so not much may change. I expect more cities to follow Barcelona’s lead.

In April 2024, Madrid announced a freeze on new licences until at least 2025 as well as banning licence applications for change of use from commercial to residential in the business quarter of Centro district. And in the Canary Islands a new law is being drafted to ban tourist lets in all new-build properties. 

In comparison with other cities Málaga was the new boy on the block, with far fewer city-based tourists, visitors coming specifically to stay for 3 - 5  days on average, rather than staying elsewhere on the Costa del Sol and making a day trip to see the city. It’s only recently that Málaga registered 2m city-based tourists annually, compared with  Barcelona’s massive 30m short-stay visitors. But now it’s playing catch-up. In June 2024 Málaga Town Hall announced that in future, and back-dated to February 2024, only properties with an independent entrance would be considered for a tourist licence. This would restrict future licences to detached houses and townhouses with their own front doors or ground floor apartments, probably converted from offices or other commercial premises. Doesn’t sound too appealing to me - an apartment opening straight on to a busy city-centre street; I’d rather stay in a hotel.

And Torremolinos appears to be going even further. A new housing plan proposes to limit tourist use to properties that do not share common spaces or services. If the property does not have a separate entrance and the ability to quantify expenses such as electricity and water it cannot be used as tourist accommodation. Taken to its logical conclusion this would ban the tenants from using a communal swimming pool. Expect more of this in the future.

While regional and provincial authorities and local town halls are using their powers to try to find the right balance between competing demands, owners are also getting organised.  It’s much easier for a Community of Owners to ban tourist lets than previously. Get a proposal on the agenda of the next AGM and if 60% are in favour of a ban then they win whereas before it had to be 100%. Former clients of The Property Finders have just been affected by this rule, not in a city-centre location but in a prime located urbanisation on a golf course in Nueva Andalucía, just behind Puerto Banús. They didn’t buy to rent but were happy to do so when they were away, appreciating the income generated to cover running costs. 

The reality is that the majority of second home owners, both Spaniards and from overseas,  either don’t rent their property at all or only when they’re not in residence.  It’s the ‘buy to holiday let’ investor causing the problems, not the buy-to-long term let investor or most second home owners. What isn’t certain is how these tougher rules and better enforcement might affect the property market, particularly in city centres. The best case scenario is that fewer speculative investors will reduce competition and make it easier for buyers, both local and from overseas, to buy a property for personal use.  I shall also be watching closely to see if the trend for more restrictions spread beyond city centres. I already know of one AGM scheduled for August in a beachfront urbanisation in San Pedro de Alcántara, one of the most prime locations on the Costa del Sol, with a total ban on tourist lettings on the agenda. 

Next time I'll look at some of the implications for those planning to buy in Spain in the future.