Changes to the list of Catalan municipalities where rent prices will be regulated: 22 leave, 53 are added

BarcelonaNews on the list of Catalan municipalities that meet the conditions to apply the rent price cap. The Generalitat has reviewed the declaration of municipalities considered to be a tense residential market area and has incorporated and excluded several towns: after studying the housing situation, the Government proposes that 302 municipalities have official recognition that their housing market is tense.

The application will not be immediate: the Generalitat's proposal will go through a public exhibition period, during which objections can be submitted, and once the definitive list is approved, the Ministry of Housing will have to give its approval for it to come into effect. Although the current declaration is valid until March 2027, the Catalan executive has already started all the procedures now to avoid running out of time. In this case, the measure would lapse, a scenario the Government wants to avoid.

Although the number of towns the Government proposes to be part of the tense market areas has increased – until now there were 271 – the population living there has decreased from 7 million to 6.1 million. “This shows that the rent price cap mechanism works in containing price increases,” defended the Minister of Territory, Sílvia Paneque, in a press release this Tuesday.

The Government has opted to keep 118 municipalities within the area, which concentrate almost six million people, 72.9% of the Catalan population. In contrast, it has considered that 22 municipalities have managed to meet the conditions that allow them to leave the tense market area. This is the case of Lleida, Granollers or Mollet del Vallès, among others, which together total more than 634,000 inhabitants.

On the other hand, there are 53 municipalities that until now were not part of the tense market areas, but which now meet the conditions to be considered as such. More than 255,000 people live there.

What does it mean to live in a municipality considered a tense area?

Tense areas are the government's tool to limit areas where it can contain housing prices, through the application of rent caps. Firstly, the rent for new contracts may not exceed the amount of the last valid contract, once updated (mostly, based on inflation). Secondly, when it comes to a large landlord – the natural or legal person owning five or more urban properties – the rent may not be higher than the reference index for rent prices.

In parallel to the two basic containment measures, the Generalitat approved last December – when rent caps had already been in place for over a year – a law to regulate seasonal rentals and room rentals. These are the two loopholes that some owners had found to impose prices higher than those permitted by law.

Beyond rents, tense areas will also determine where the Government and the Commons want the construction of social housing (HPO) to be maximally streamlined, overriding urban planning laws, provided that the resulting flats meet the habitability conditions to obtain the certificate.

When does a municipality become a tense area?

The law establishes that a municipality's housing market is tense if, on the one hand, citizens have to dedicate more than 30% of their income to housing expenses – rent or mortgage and basic utilities – or, on the other hand, if the rent or purchase price has increased in the last five years by three points above the consumer price index (CPI, the indicator used to calculate the increase in the cost of living).

The declaration of a tense zone is one of the instruments included in the first state housing law – approved in May 2023– to tackle the housing crisis, although it is the autonomous communities that must apply the measure. Catalonia was the first territory to officially declare a large number of municipalities as tense zones, and it did so in two batches: in August 2023 it applied the classification to 140 locations and, in April of the following year, to 140 more. In total, last year there were 271 Catalan municipalities considered tense zones.

Despite the regulations, the Generalitat has only fined three large holders – that is, owners of more than five homes each – for non-compliance with the regulations, without specifying what the infringement was, such as whether it was a violation of the rent cap.