Spain's Congress defeats housing decrees as Puerta del Sol protests persist

Parliamentary defeat for housing decrees

The Spanish Congress of Deputies on Friday voted down two housing decree laws proposed by the government of Prime Minister Pedro Sánchez. A parliamentary majority formed by the People's Party (PP), Vox, Junts, and the Navarrese People's Union (UPN) united to reject the legislation. The contentious initiatives sought to introduce strict tenancy protections, mandating successive five-year lease extensions after the initial contract period, or seven-year terms when landlords are legal entities. Under the most contested provision, property owners who chose not to renew a contract would have been required to pay up to 12 monthly rent payments in compensation to the tenant.

Protests spread from Puerta del Sol

Outside the parliament, demonstrators marched toward the lower house, which was cordoned off by the National Police, connecting with the camp that has occupied Madrid's Puerta del Sol for several days. The mobilization followed the eviction of 87-year-old Maricarmen Abascal, who faced displacement over an old rental contract signed in 1956 before negotiating a return to her residence with property company Urbagestión. The protest has engaged diverse segments of the population, including landlords protesting against real estate speculation. Marta, an owner of two apartments who joined the Puerta del Sol encampment with her daughter, argued that investment funds treat Spain as a secondary market and called for a nationwide general strike alongside rent caps.

Housing cannot be a business.

Another landlord, Alfonso, broke into tears while voicing support for the campers in Madrid, stating that widespread mobilizations should have taken place earlier. Activists also established a similar camp in Barcelona's Plaça de Catalunya.

Market reactions and economic debate

The legislative proposal prompted immediate adjustments across the rental market ahead of the vote. Data from the rental observatory at Alquiler Seguro indicated that available residential and temporary rental supply dropped by roughly 4,290 properties below projected levels, as private owners withdrew listings or delayed transactions to assess legal risks. During an interview on the television program Espejo Público, economist José Carlos Díez criticized the government's approach over the past eight years, stating that the executive failed to implement initiatives capable of expanding housing supply. Díez stated that 92% of housing owners in Madrid are working families who saved to acquire a second property to rent out, rather than large investment funds.

The housing problem in Spain is a supply deficit. In 2007 we had an excess, and now quite the opposite.

Landlord challenges and future outlook

Property managers pointed to operational burdens and legal uncertainty as key factors driving owners away from standard leases. During a broadcast of Antena 3's program La Mesa on 30 September, hosted by Cristina Pardo, 39-year-old entrepreneur Rubén Zaballos detailed the management costs of his portfolio of 150 properties. Zaballos, who pays over 100,000 euros per month in mortgages and employs 60 staff members, stated that he previously rented residential units at an average rate of 300 euros per month. However, after experiencing squatting, non-payment, and illicit drug operations on his properties, he shifted a portion of his units into tourist accommodations. Following the defeat of the decrees in Congress, the debate over housing reform remains focused on whether to prioritize tenant compensation rules or broad supply incentives.