Perspectives: The Brussels Bubble

Housing Crisis

Javier Gil: The housing movement in Madrid achieved favorable judicial regulations against the funds

To which extent is the housing crisis affecting Madrid and Spain? 

Spain came out from a major housing crisis in the 1990s and 2000s; after that we had the financial crisis. Banks were evicting people from their households as they could not meet loan payments. In this context, big housing movements were created, advocating for housing rights. Meanwhile, during these years, and especially since the 2008 mortgage crisis, the government has intervened and changed public policy on housing to attract international investors and hedge funds. These funds would then buy non-performing loans (NPLs), revalue the properties, increase the rents, move on to evictions and reshape the entire housing market. 

Large corporate landlords have turned these housing units into rental properties with excessive rent increases. They bought homes with squatters and evicted them. Before, real estate companies and wealthy families owned Spain’s rental housing sector. Now, banks and international private equity funds have entered the rental sector, accumulating a massive number of units in a very short period of time. These private equity giants are very influential over government’s decision-making and the market fluctuations. 


Since 2019 renters in Madrid have been organizing a campaign called “Madrid Against Blackstone”. Tell us more about this initiative. 

After 2008, the foreclosure crisis hit Spain hard. Many evictions took place between 2008 and 2015. The housing movement affected by the mortgage crisis grew and considering the fact that governments have been favoring and promoting homeownership, the repercussions of the crisis were even deeper. People that were losing homes came from lower-income and migrant communities, people and families who were not previously politicized were being part of the movement, taking up empty housing, sometimes entire blocks, organized and determined to win against huge corporate landlords.

Today, Blackstone is the biggest homeowner in Spain and the largest private housing operator in the country’s history. When it started raising rents by nearly 100%, Madrid Tenants Union was mobilized against this policy. Tenants were staying home even if the lease had finished, to avoid signing a new contract with abusive rent. We’ve been doing this since 2017 when the Madrid Tenants Union was created. We started conflicts with the landlords and put them on social media. We formed “buildings in struggle,” as we called them, and more Blackstone tenants got involved. We were going all over Madrid because Blackstone was raising rents incessantly. The discussion had then entered the Parliament, the debate had gone mainstream, Blackstone had started suing people in court, but tenants were still paying the old rent, not the increase, showing that there was a commitment on their side to keep paying what they considered as legitimate rent.

After two years of struggle, Blackstone sat down and negotiated, although the law was on its side. Over 80 households stayed in the fight. In the end, we won an extremely favorable contract, a reduction from 100% rent increase to a one-time increase of 8% and no additional rent increase for the next seven years. 


Is it possible to impose rent control and taxes on vacant housing? What would be the outcome of such regulations? 

Madrid has one of the largest percentages of vacant houses in Europe. Investors consider vacant houses as an asset, speculating on the price, instead of putting these houses in the market, paying the relevant tax, not the one they are paying now which is much lower and pushes the market price and the rents down. 

As for rent control, in the Catalonia region and Berlin we have two cases of rent control where the Constitutional Court has adjusted the prices, the Parliament has respected the verdict, and renters started paying more affordable rents. The situation is much better there than in Madrid. 


What is the situation with respect to social housing and how it has developed during the last years? 

Social housing was a policy destined to be transformed into home ownership. We have a huge stock of housing being built in the 1960s in a way that tenants after a period of time would be able to buy the house; this was thus a way to privatize social housing. This process created a huge “bubble”, a huge private houses portfolio that after 2008 collapsed. In this respect, considering the previous experience, social housing is not the solution; rent control is the solution and taxes on vacant housing. 


Is there any space for social movements to cooperate with the corporate sector towards securing the right to affordable housing? 

The stakes for the corporate sector are high and the pressure exerted by the social movements is also growing. For the corporate sector and the government it is always “business as usual”, but for us, for the tenants and social movements it is about affordable housing. It is a real estate business and for the corporate sector housing is a financial asset, a means to accumulate capital and so there is an antagonistic relationship between the two sides. 

For the time being, the corporate sector is winning its case with the support of the state and of huge institutions, such as the European Central Bank, which has been the real reason for this real estate boom. 


What are the major contradictions of Airbnb in cities with vast international visitors, like Madrid?  

There is a big contradiction between the foundations of Airbnb and what we are witnessing today. Initially, it was an idea for a shared economy model, it was about a model of sustainable economy, but what we are experiencing now is the exact opposite. Huge concentration of tourists, huge displacement of local population, landlords making more money than the ones who are renting regularly and for years their house. Airbnb has become a disgrace for citizens as there is no compliance with housing laws.

It is a huge business that destroys the cities, makes daily life exhausting, noise is going up, buildings and public spaces are not used in a way they were meant to, neighbors are leaving their areas and consequently schools are closing as there are no more kids to attend classes. Oversaturation of tourists has also a negative and pressing effect on public healthcare and other public-driven services making the entire local and public system overwhelmed. Therefore, it is difficult to find a balance between the positive and negative aspects of Airbnb. 


*Javier Gil is a sociologist, researcher at the Urban Planning Institute of UNED University in Madrid, and founding member of the Madrid Tenants Union.

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