While they are busy building enough new flats around Madrid to house the remaining few young professionals that still haven’t fled to the city from the economically depressed provinces, there are a remarkable number of empty flats here in the centre of the city. Half the shutters in the 6 floor building opposite ours are permanently down – a sure sign of an empty home – and no-one has lived next to, or below us, for as long as we have been here. There are a vast number of unoccupied flats in the centre of Madrid, a problem that is reflected in large cities all over Spain.
The local Catalan Government had decided to do something about the problem, and intends to charge the owners of such premises 9 Euros for every day that their flat remains empty (Spanish article in El Pais). The idea is to stimulate a completely stagnant rental market. I remember standing in queues of up to 40 people to see flats for rent in Madrid 6 years ago, and I doubt the situation has changed. Either you were Spanish and had a decent wage slip to show potential landlords, or you could forget it.
Carl
23 Jan 07 at 12:00 am
How about making the laws a little more land-lord friendly? Nobody wants to rent because once someone gets in they can stay without paying – legally – for I think, two years.
Ben
23 Jan 07 at 7:55 am
True, obviously some balance is needed, but it does seem criminal the number of empty houses there are in Madrid…
Pedrito J
23 Jan 07 at 1:10 pm
I see lots of empty cars in the street. And lots of food in stores, that nobody is eating. And lots of clothes that nobody is wearing.
Clothing, eating, transport… They are at least equally important than housing. Should we fine bikers each day their bikes are stopped?
I guess that harming property rights is no good.
Janelle
24 Jan 07 at 10:26 am
At first I thought, Great! They are doing something about all those empty flats. But then it was explained to me that this measure is more to get votes than anything. It seems that if the law protected landlords, as Carl mentions, who cant kick people out even if they dont pay, then maybe those landlords would be more inclined to rent out their property. I think they need to really study this issue and do something about the law from the inside.
Marina
24 Jan 07 at 10:45 am
Ben, the renting scenario has indeed changed since you were trying to rent six years ago. Then it was impossible to rent unless you had a good nomina (salary), arrived the first to see the flat and with the money for the deposit in your hands. That lasted for a few months or maybe a year, but I know of lots of work mates that have been renting without problems for the last 4 years.
Carl, the law changed recently and now the period of time has been reduced to 6 months, (which is still not ideal but it’s much better than before) also the local governments are starting to offer some kind of insurance for landlords. For example, they would cover the costs if the people that rents stop paying and also they would cover if there is any damage in the property. This aids are quite recent so I can’t tell if they are working ok or not.
Pedrito, in a way I agree that property rights shouldn’t be limited but the housing problem has got out of hands in Spain, everybody with a bit of money is making the most of the situation (including many politicians) and meanwhile single people can not afford to leave their parents house and even couples have really big troubles to do so without a little bit of extra help. Somehow the inertia of the increase in prices has to be stopped.
Pedrito J
25 Jan 07 at 12:01 am
Marina, you say that by some kind of insurance, government “would cover the costs and damages”. Sorry, but government is not paying anything; you and me are paying those landlords via taxes, either we want ir or not.
Secondly, I dont mind stopping “inertias”, my problem is harming individual rights. We could try to decrease taxes, or let constructors do their job wherever they want. But governments always try to get more money from us to waste it…
Marina
25 Jan 07 at 10:36 am
Well Pedrito, it is obvious to me that the money that government dedicate to any kind of aid comes from taxes. But if you prefer to clarify it no problem!
Also, I didn’t say that I agree with the 9€ / day measure, I consider it abusive. But I agree with the idea of not having empty flats, people can still invest in property and then rent it out instead of keeping it empty. However that is only going to happen if the landlords feel protected if there is any kind of problem. Also, it is possible that this local government insurances can be self sufficient because it will help to regulate the rents and tax each one of them (remember that most of the rents are still paid in black money) and that money can be used towards the insurances themselves.
greytop
25 Jan 07 at 4:34 pm
There may be a lot of reasons that people don’t sell or rent flats out. Inheritance law problems, capital gains allowances over a period of years, hassle of doing it if you don’t need the money. Once the government starts to regulate this market it is likely to get into other areas of what should be personal choice. Look at any harbour full of fancy boats that don’t move yet people complain of a lack of berths. Cars sitting in the street for weeks yet a lack of parking and so on. Valencia has a similar problem with many thousands of empty properties & even a small town like Pego has its fair share. Short of compulsory purchase or punitive taxes, how do you regulate this? But yes, it leaves an edgy feeling when they do act in this way.
Pedrito J
25 Jan 07 at 4:36 pm
Clarification is good, you hear lots of politicians saying “they are doing an effort”, and the only effort there is ours.
What do you think about empty cars?
And what about my bank accounts, that I am not using right now?
greytop
25 Jan 07 at 4:41 pm
Empty bank accounts? If not the Spanish bank charges will soon sort them out
Marina
26 Jan 07 at 11:42 am
I wouldn’t compare holiday houses that remain empty most of the year but they are still inhabited for a period of time to houses which literally are empty for years. I think it would be in the benefit of all the parts to regulate the rents in a way that the landlords feel more safe to rent. For me that is the key to finish with the long term empty houses. It would be good for the renting prices, as if there is more offer they will be more reasonable, it would be good for the land lords that will earn some money out of their flats and it will be good for the state that will tax those rents.
Pedrito J
26 Jan 07 at 1:05 pm
Just nuances
1) Do not see empty houses as a problem, but as a sign of wealthness. In Burundi there are not empty houses.
2) Renting is already overregulated. We could just let people contract freely, and have judges ruling well and fast.
3) I do not know if landlords renting are happier than landlords not renting. But I know that if they do as they please, they will be happier.
Freedom for everyone!