Sánchez pushes forward the housing decrees: how do evictions and rents stand now?

Madrid"In this legislature we have had to work with a Congress with a lot of fighting. Where agreeing has been confused with betraying and blocking with convincing". This is how the Spanish President, Pedro Sánchez, defined his experience in Parliament in a sign of how he has suffered to approve legislative proposals, since mainly Junts and, to a lesser extent, Podemos have been his thorn in the side. The housing decree laws are the latest example. However, the calling of elections and the dissolution of the Courts grant Pedro Sánchez a second chance to approve issues that until now have been impossible for him. He will be able to do so via decree laws (which cannot regulate, for example, fundamental rights and must be done only for urgent matters). For what reason? Because the permanent deputation comes into operation. It is a parliamentary body, a kind of mini-Parliament, that operates when elections are called or there are holiday periods. It is currently made up of 69 deputies in a proportional representation of the groups in the chamber. However, unlike the plenary, in this body the progressive majority does not depend on Junts to move measures forward: Junts (1), the PP (27) and Vox (6) add up to 34 votes and are one short of the majority.

That is why Pedro Sánchez, as confirmed by sources from the Spanish government, will take the housing decree laws that were rejected by the Congress of Deputies to the Council of Ministers this Tuesday, with the idea that they will be approved by the permanent deputation during the election period. In fact, it is a strategy that the executive branch can use throughout the entire electoral campaign to simulate what it could do if it won the elections and could govern with a progressive majority. It can continue to use the decree laws, but the rest of the initiatives in process in Congress will lapse. "We need a much broader progressive majority," Sánchez shouted this Monday to ask the public to support the left to renew the majority that has been governing Spain for eight years.

The effects

What will be approved this Tuesday? It is expected that the Council of Ministers will approve the two housing decree-laws to which it gave the green light just a week ago. On one hand, there is one that stops evictions for vulnerable families among other measures, such as the extraordinary extension of leases for two years; and, on the other, a second decree-law in which indefinite rental contracts and compensation for the tenant are established if the owner wants to end the contract early. According to the majorities in the permanent deputation, only the first one is expected to go ahead, since the PNB has also opposed this second measure, which is a demand of the Tenants' Union (Sindicat de Llogateres). Sources from the Basque nationalists, in any case, will address the direction of their vote in the coming hours. From Sumar, the Minister of Culture, Ernest Urtasun, has already warned that they will not accept "cuts" to the proposal.

What does it mean for the first housing decree-law to come into force? The main effect is that evictions of vulnerable families will be stopped, a measure that the government approved during the pandemic and had been extended until this year. Junts struck it down with the argument that it did not provide enough guarantees of rent collection for small owners –an autonomous compensation with state funds was established– while the eviction for vulnerability was suspended. This same week there were 90 evictions planned just in the city of Barcelona, which is the city where the most are carried out, some of which would have to be stopped the day after the new housing decree-law was published in the BOE. At the same time, once the decree-law is approved, tenants will also be able to request the extraordinary two-year extension of rental contracts or deduct the rent in their personal income tax (IRPF) declaration if they have a salary of less than 33,000 euros per year and if the contract was set to expire before the end of 2028.

The purchase of homes by investors for a price lower than 70% of the market value will also be prohibited –the method established by the Spanish government to veto home buying and selling operations by vulture funds–; tax incentives for owners will be activated, such as a 100% deduction of the net income provided by the property if the rent is lowered by 5% compared to the previous price; and a 10% VAT will be applied to tourist apartments.