A legal perspective of current challenges of the Spanish residential rental market

Author:Sergio Nasarre-Aznar, Elga Molina-Roig
Position:UNESCO Housing Chair, University Rovira i Virgili, Tarragona, Spain
A legal perspective of current
challenges of the Spanish
residential rental market
Sergio Nasarre-Aznar and Elga Molina-Roig
UNESCO Housing Chair, University Rovira i Virgili, Tarragona, Spain
Purpose This paper aims to explain the main difculties in the Spanish residential rental market
becominga true alternativeto home ownership.
Design/methodology/approach Currently, the Spanishrental market only meets temporary housing
needs; it is very atomizedand lacks professionalism. It does not provide an adequate legal frameworkto full
the partiesaspirations (i.e. stability, affordability and exibility for tenants; protability, security and
guarantees to landlords).The analysis of this proposition and the resulting proposalare based on six years of
research,which started with the TENLAW European project.
Findings Overcoming theseconstrains is essential to double the rate of residential leases in Spain and get
closer to the European average,thus achieving a true diversication of housing tenures and avoidingfuture
housing bubbles.
Practical implications The paper makes a series of recommendations to legislators and policymakers
to draft an adequate legal frameworkaimed at increasing the housing rental market share. This isbased on
the experienceof mature tenancy markets in Europe,such as the German, Swiss and Austrianones.
Social implications The new proposed legal framework will helpto transform the tenancy model in
Spain into a functional one, making it more stable, affordable and exible, while increasing safety and
protability for landlords. The model is also applicable, on a more general level, to all Mediterranean
Originality/value Rethinking the regulation of tenancies, in a context of housing crisis and
unaffordability(still a reality in many European and worldwide countries)has valuable potential for making
this type oftenure more popular and for avoiding future housingbubbles.
Keywords Homeownership, Leases, Housing bubble, Real estate investment trusts, Rent control,
Paper type Research paper
1. The current need for a well-functioning housing rental sector in Spain
The Spanish residential rental market has not always been a residual marketas it is today.
In 2015, it represents only 15.6 per cent of the market, a long way from the European
average of 29.6 per cent (EUROSTAT, 2017)and even further away from countries with the
highest housing rental sector in Europe, i.e. Switzerland (56 per cent) (EUROSTAT, 2017),
Germany (57 per cent) and Austria (40 per cent)(CECODHAS-USH-Dexia, 2008).
Paragraph 33 of the United Nations Habitat New Urban Agenda, October 2016, states a
This paper was made possible by the participation of both authors in the Project of the Spanish
Ministry of Economy Reforming housing tenures(DER2014-55033-C3-1-P) (2015-2017); and the
TENLAW Project (2012-2015) of the 7th Framework Program of the European Commission, led by
Prof C. Schmid, the University of Bremen. Prof Nasarre is an ICREA Fellow 2016-2020.
Received 31 March 2017
Accepted 12 May 2017
InternationalJournal of Law in the
Vol.9 No. 2, 2017
pp. 108-122
© Emerald Publishing Limited
DOI 10.1108/IJLBE-03-2017-0013
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