Real Estate

Housing Crisis in Spain: Homelessness Up 24% as Short-Term Rentals Surge 56%

Homelessness in Spain rises 24% since 2012 as short-term rentals surge 56%, reducing long-term rental supply by 15%.

By Doug Elli

7/11, 02:17 EDT
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Key Takeaway

  • Spain's homelessness rate has surged 24% since 2012, driven by high rental prices and a shortage of social housing.
  • The government plans to add 184,000 public housing units in three years, but the Bank of Spain estimates an additional 1.5 million homes are needed.
  • Short-term rentals for tourists have increased by 56%, reducing long-term rental supply by 15%, exacerbating the housing crisis.

Rising Homelessness in Spain

Spain is grappling with a severe housing crisis, as highlighted by the story of Francisco Carrillo, a 62-year-old pensioner who found himself homeless after moving to Madrid for cancer treatment. Carrillo's plight is emblematic of a broader issue affecting thousands of Spaniards who are being priced out of the rental market due to a shortage of social housing and regulations that deter long-term rentals. The situation has been exacerbated by a surge in holiday lets on platforms like Airbnb and Booking.com, leading to widespread protests across the country. According to official statistics, the rate of homelessness in Spain has risen by 24% since 2012, with approximately 28,000 people currently without a home.

The Impact of Short-Term Rentals

The boom in short-term rentals has significantly impacted the availability of long-term rental properties. Data from property listings website Idealista indicates that the supply of long-term rentals has fallen by 15% in the past year, while short-term rentals, primarily for tourists, have increased by 56%. This shift has intensified competition for available apartments, with about 40 people responding to each new listing in Madrid. The Bank of Spain reports that around 45% of people living in rented accommodation are at risk of poverty or social exclusion, the highest proportion in Europe. This dire situation is further compounded by Spain's social housing stock, which stands at just 1.5% of all homes, compared to a European average of 9%.

Government and Charitable Efforts

In response to the crisis, the Spanish government has announced plans to add 184,000 units of public housing over the next three years, with a goal of matching the European average by 2027. However, the Bank of Spain estimates that an additional 1.5 million homes are needed to meet this target. Charities are also stepping in to fill the gap left by the state. For instance, Mundo Justo (Fair World) and Hogar Si are providing rental homes to the homeless at below-market rates, supported by private capital. Techo, a social investment fund, owns around 230 flats and works with 50 NGOs to offer affordable housing solutions. Despite these efforts, the demand for social housing far outstrips supply, with 48,000 people currently on the waiting list in Madrid alone.

Broader Implications and Comparisons

The housing crisis in Spain is not an isolated phenomenon but part of a broader trend affecting many European countries. The European Commission has noted a substantial increase in homelessness across the continent over the past decade. In the United States, similar challenges are being addressed through measures like the proposed $20 billion bond in the Bay Area to fund affordable housing projects. This bond, if approved, would provide low-cost loans to support the development of nearly 41,000 new affordable homes. Such initiatives highlight the critical need for a mix of public and private efforts to tackle housing shortages and ensure that vulnerable populations have access to safe and affordable housing.