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Spain is aiming to help millions of young adults still living with their parents to rent their own homes by offering them properties abandoned when its housing market collapsed a decade ago.
The rising cost of rent is set to become a key campaign issue as Spain gears up for regional ballots on May 28 and a general election later in the year. Just 16% of young people in Spain live independently, compared to an average of 32% in Europe, according to the Observatory of Emancipation.
The government on Tuesday approved plans to make up to 50,000 foreclosed homes held by Spain's bad bank Sareb available for affordable rent. It also reached an agreement with allies in parliament last week to push through a bill that will introduce rent caps of 3% a year in areas where rents are rising significantly.
"Young people and the not-so-young can't pay for their rented apartments," Housing Minister Raquel Sanchez said of the plan to repurpose toxic assets held by Sareb on Antena 3. "We think it's a measure that will work and it's not the only one that we're putting on the table."
High rents are a particular problem in the Balearic and Canary archipelagos and on the Mediterranean coast, where short-term rental properties for tourists and foreign buyers are crimping supply. In Malaga, rents have increased by 20.4% as availability fell by 27% in the first quarter from a year earlier, according to housing search website Idealista.com.
Antonio Garamendi, president of Spanish employers association CEOE, said the housing bill's "populist and interventionist" measures would not resolve rising rent prices but instead will "provoke the opposite of what is intended."
Sareb was created in 2012 to take over more than 50 billion euros ($54.85 billion) in real estate and other toxic assets from former savings banks that collapsed after a housing bubble burst.
Although the government has said up to 50,000 homes will be made available, in reality only 9,000 are nearly ready for tenants. In addition, it has identified 112 plots of land on which 10,000 new homes can be built initially, with a further 5,000 to be added in the future.
A further 14,000 homes that are already inhabited could also be included in the social renting program, according to Sareb.
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