Madrid, Spain, has banned the granting of new licences for tourist flats, following in the footsteps of its Catalan sister, Barcelona, as the whole country battles the negative impacts of overtourism.
With immediate effect and until 2025, the Spanish capital will stop issuing new licences to tourist rental apartments, city mayor José Luis Martínez-Almeida told a press conference. The idea is to get a grip on Madrid’s accommodation offer, which is overrun with illegal vacation rentals largely blamed for pushing up rental prices and creating a housing shortage for locals. A previous measure, the Special Accommodation Plan, brought in during 2019, had been “ineffective” at solving the problem Martinez-Almeida said.
93% of holiday rentals illegal
According to official figures, the number of tourist rentals in Madrid has grown by 41% since 2017. The city’s website indicates that 13,500 holiday lets exist in Madrid and an astonishing 93% of them are illegal. The issue is skewing the capital’s accommodation market and contributing to “residential desertification”, authorities and residents say.
As a result, the city is planning a crackdown, recruiting 15% more urban planning inspectors and introducing hefty fines for those who fail to comply with regulations about holiday lets. Under the changes to the city’s General Plan of Urban Development, first time illegal landlords could be slapped with cease and desist orders and penalties for non-compliance of between €1,000 and €30,000. Repeat offenders could be punished with fines up to €60,001, and charges of over €100,000 will be imposed for third-time rule-breakers.
The sanctions, which can be imposed cumulatively up to €190,000, are designed to create a financial deterrent so that illegally turning a residential apartment into a holiday let no longer pays off.
Territory-wide problem
Solutions seen in other cities around the world include making rules to ensure Airbnb style hosts really live in the accommodation they are renting and limiting the number of nights per year that rentals can be made available.
Across the Spanish territory similar measures are in the pipeline. The Canary Islands are looking at legislating to prevent new-build properties from being turned into holiday lets. Barcelona and Malaga too are limiting holiday rental licences.
But figures from Spain’s statistics institute show that in 25 of the country’s biggest cities, the number of holiday lets increased by 25% in just the first three months of 2024. What’s more, the roughly 1.9 million hotel beds across the country are now almost matched by 1.75 million beds in 351,000 holiday rentals. How the vacation rental market’s turning tide will affect owners of those properties or affect Spain’s popularity as a destination, remains to be seen.
