The rent cap reaches more Spanish municipalities: "It works"

BarcelonaIn Santiago de Compostela, rents have risen by 40.26% in five years: they have gone from an average of €444 per month in 2019 to €623 in 2024. Although prices remain far from what Barcelona residents pay – an average of €1,137, according to the Generalitat – Santiago meets the conditions established in the state housing law to be considered a Stressed Residential Market Area (ZMRT), the umbrella term that allows rent caps to be set.

The Galician capital is one of the seven municipalities that this Thursday the Ministry of Housing has added to the ZMRT list, at the proposal of the regional governments where they are located. In total, there are currently 317 localities throughout the State with this consideration. They are part of five autonomous communities and have a population of 9.3 million inhabitants, practically 19% of the State's population.

Sources from the Spanish government assure ARA that there are "many more municipalities" that meet the requirements to be formally considered ZMRT than are on the list, but they recall that it is the regions that have the powers to process it.

Catalonia concentrates 85.5% of the municipalities classified as ZMRT – 271 municipalities – and 75% of the population – 7 million people. In fact, it was the first territory to request the delimitation of these areas in order to apply rent price control. The rest followed. In Navarre there are 21 localities; in the Basque Country, 18, after Basauri was added to the list this Thursday; in Galicia, two, and in Asturias, five, all of them adhered this week, when the measure began to be applied. The socialists are in the government ofall localities, with the exception of the Galician one.

Balance of caps by communities

The utility of caps to facilitate access to housing is the key question and where experts diverge. Both the ministry and the regional and municipal officials who have promoted the application of the measure believe it works, although they defend it with varying degrees of force. "Public data as a result of its application in Catalonia, Euskadi, and Navarra show that the measure works," guarantees the Spanish executive.

In Navarra, the regional government assures that rents have fallen by more than 7% compared to before the measure and attributes the decrease in new contracts to "greater market stability," which causes "renewals to increase and fewer new contracts to be signed." The ZMRT have been in force since the second quarter of last year.

In the last quarter without caps, the first of 2025, 184 more contracts were closed than this year: signings have fallen by 16.2%. For the Navarrese Minister of Housing, Begoña Alfaro, "the main objective of the declaration, which is to ease rental prices, is being achieved."

Regarding the results in the Basque Country, the deposits for new contracts have fallen by 3.7% in Donostia, 3% in Irun, 4.1% in Errenteria, and 0.6% in Lasarte-Oria since the fourth quarter of last year, when caps began to be applied. The government highlights that Euskadi closed the year with "the largest volume of active free rental contracts in its entire historical series," for which reason it defends that the number of rental homes has not "been affected".

The regional minister, Denis Itxaso, assures that the figures "invite hope," but warns that "it would be premature to turn a quarter into a consolidated trend."

Municipalities that want to be ZMRT

The Asturian government has fully activated the measures provided for in the housing law this July, in twelve territorial areas distributed across five municipalities. Therefore, it does not declare the entire locality as a tense residential market area, but rather a specific area. Sources from the Asturian government assure ARA that it is "a first phase of implementation" and that the executive "continues to analyze the evolution of the residential market to assess new declarations." For now, it has four more population centers on the table.

The Gijón City Council, the most populous city in the Principality, has filed an administrative litigation appeal against the classification. The regional government expresses "maximum respect" for the judicial initiative, but recalls that the decision is based on "objective data on the evolution of the residential market".

On the other hand, the city of Santiago de Compostela has managed to enter the ZMRT list despite the opposition of the Galician government. Along with A Coruña, they are the only two municipalities on the list belonging to a community governed by the Popular Party. Núñez-Feijóo's party registered a bill in Congress in April to repeal the figure that is in parliamentary process, thanks to the votes of Junts and Vox.

In line with Galician cities, in April last year, ten Madrid municipalities – totaling 800,000 inhabitants – asked the Community of Madrid to promote the procedures to be considered ZMRT, a request that the regional Parliament rejected. In statements to ARA, Candelaria Testa Romero, mayor of the promoting municipality, Alcorcón, argues that "prices must be capped" while administrations apply structural measures: "It is no longer theory, it is facts. We see it in Catalonia and in the Basque Country," she explains.

Testa appeared before the Senate to demand the imposition of Article 155 of the Constitution, understanding that Díaz Ayuso's government was acting against the general interest. The mayor assures ARA that the municipal government can no longer do anything else to achieve the application of ZMRT, and they are now surveying neighborhood associations so that they are the ones who appeal to the ombudsman.

Beyond caps

The Spanish housing law establishes that a municipality's housing market is considered 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).

Beyond caps, the ZMRT declaration includes the application of other measures, mainly reductions of up to 90% of personal income tax for owners who rent out properties and a greater amount of aid for the promotion of social housing.

In order to contain prices, in addition to establishing a reference index, regions can approve a sanctioning regime for those who exceed thresholds or do not properly inform tenants. Catalonia approved it at the beginning of 2025 and, since then, has imposed three fines on large holders for violations of the housing law, without detailing what they are for. Euskadi and Navarra also have them, while Asturias includes it in its housing law, which is under parliamentary debate. In Galicia, sources from the Santiago city council lament to ARA that it seems that the government of the popular Alfonso Rueda has no intention of taking action.