Spain Seeks to Curb Short-Term Rentals Amid Growing Housing Crisis

The Spanish government is moving to rein in real estate purchases by foreigners and curb the spread of short-term rentals, part of a series of measures that officials say are necessary to alleviate a painful housing crunch that has rapidly become one of the worst in Europe.

Spain’s prime minister, Pedro Sánchez, said on Wednesday that his government would seek a groundbreaking 100 percent tax on real-estate purchases by buyers outside the European Union, part of a broader plan that he announced last week to try to quell anger and protests in cities across Spain over a lack of affordable housing. He went even further on Sunday when he floated an outright ban on foreign purchases of real estate in Spain, but later backed off.

Americans have grappled with an affordable housing crisis for years, and now Europe’s major cities are struggling with a similar problem. Housing has become the largest household expense across the European Union, where rents have increased an average of nearly 20 percent over the past decade, and house prices have jumped nearly 50 percent, twice the rate of average household incomes.

The intensity varies by country, but they have common threads, including the commodification of housing and the rise of short-term rental platforms like Airbnb, as well as the so-called golden visa programs in Spain and neighboring countries that drew buyers who snapped up housing in exchange for a visa.

Adding to the strain was a sharp decline in housing construction across Europe after Russia’s invasion of Ukraine drove up prices for building materials and energy. High interest rates by the European Central Bank, meant to quell inflation, buffeted real-estate markets across Europe.

From Spain to Sweden, the scarcity of housing, coupled with wages that have risen slowly, has made access to affordable homes more difficult. The problem is so acute that Ursula von der Leyen, the president of the European Commission, recently appointed a housing czar to spur a search for solutions in Europe.

In Spain, Mr. Sánchez warned that housing is one of Europe’s biggest risks. “It is one of the main challenges facing European societies, including Spain,” he said at a conference last week in Madrid, declaring that affordable housing must become a “right” and a “pillar of the welfare state.”

“We are facing a serious problem, with enormous social and economic implications, requiring a decisive response from society as a whole, and with public institutions at the forefront,” he added.

Whether Mr. Sánchez’s proposals will become law is unclear. Included in the plan the prime minister outlined last week with 12 new measures are tax breaks for landlords who lower rents and proposals to construct thousands of low-cost housing units across Spain. Mr. Sánchez said Spain had the lowest share of affordable homes of any European country, a problem that arose after previous governments allowed many to be sold to private investors.

Mr. Sánchez said he would push for a recently-created public housing company to have priority over private investors in the purchase of housing and land. Any measure would need to pass Spain’s lower house of Parliament, where Mr. Sánchez’s minority party has struggled to push through bills.

Yet at a time when Spain has been buffeted by crises, including efforts to recover from devastating floods, Mr. Sánchez’s proposals are a sign of how critical housing is in Spain.

The urgency is growing as street protests become more frequent.

In vacation hot spots where short-term rentals have proliferated, locals have taken aim at tourists for the housing shortage. In November, tens of thousands of Spaniards filled the streets of Barcelona to demand a solution. The city’s mayor said that by 2028, it would withdraw all 10,000 licenses it had granted to apartment owners to convert their spaces into short-term rentals for tourists.

In Madrid, thousands have taken to the streets in recent months to demand more affordable housing amid rising rents. “Housing is a right, not a business,” the crowds chanted.

Faced with a similar backlash, governments elsewhere in Europe are trying to find their own solutions. Greece announced a freeze in 2025 on licenses for new short-term rentals in the center of Athens, which has become unaffordable for many Greeks, who moved away after buildings were converted in recent years to accommodate tourists.

In Germany, the construction industry was facing its worst crisis in a generation when the government collapsed in December, throwing doubt over multi-billion-euro relief packages that the previous government had proposed to prop up developers in the country, Europe’s biggest economy. A string of prominent construction and real-estate companies have filed for insolvency, squeezing supply.

And in France, the government has said it wants to build 30,000 homes in priority areas, mainly those where factories are being constructed. Some towns, including Lyon and Toulouse, are building low-cost apartments on top of existing buildings. The City of Paris is mulling whether to convert unused office space into housing.

“The West faces a decisive challenge if it wants to avoid becoming a society divided into two classes: rich landlords and poor tenants,” Mr. Sánchez said in Madrid last week.