Property News
Tourist Apartments: A Perfect Storm or Opportunity for Positive Change?
There is a perfect storm unfolding in Spain’s tourist apartment rental sector that is shaking up Andalusia and all of Spain. Airbnb, VRBO and other online tourism rental portals have been growing dramatically for a long time. This model of tourist accommodation has attracted enthusiasm, ire and regulations since almost the beginning. I, myself, have been writing on this topic for at least a decade.
But something has definitely changed recently; the dam has burst. The headline grabbing events since May have been the very large demonstrations that have taken place against “tourist massification”. In particular, the Balearic Islands and the Canaries have had very big protests.
Organizers in Palma de Mallorca claimed that their protest at the end of May attracted 25,000 people. More recently, Spaniards showed up early to occupy a popular local beach that has become overcrowded since it became popular with Instagram influencers who have promoted it. In the Canaries in April there were somewhere between 60k and 100k people demonstrating on the seven islands. The reasons for the anger are clear enough: while tourism is key to the Canaries economy, contributing 35% to the island chain’s GDP, it is overwhelming the local population.
The Canary Islands, with a population of 2.2 million, saw nearly 14 million foreign tourists in 2023, a 13% increase from the previous year. In addition to these very big events there has been a lot of general, lower-level ferment unfolding across the peninsula, including in Malaga city itself. There’s everything from anti-Airbnb sticker campaigns, graffiti, and the growth of a number of community resident organizations – from Cádiz to Granada to Madrid, and beyond.
New Tourist Law In Andalusia
Here in Andalusia, the public protests come together with recent changes to the tourist apartment law passed in January of this year about which I’ve written previously. In the current turmoil of changes, there was one big factor that I pointed to in the legal reform:
One big feature of the new law is that it allows municipalities to establish limitations on the maximum number of tourist apartments, either per building, per sector/area, during certain periods of the year, or other criteria. Any such limitations must balance economic concerns with quality of life concerns for local residents. And according to the Junta, municipalities will have to provide clear justification for any limitations. It hasn’t taken long for that devolution of power to bear fruit.
Malaga and Granada both announced very similar measures in the same week. Licensing of new tourist apartments has been temporarily frozen in Granada and in both cities, there will be imposed new conditions, for instance that tourist apartments must have their own separate entrance, emergency exits and separate utilities such as water and electricity.
There are also studies taking place to examine the way that tourist rentals are concentrated in various cities and to limit licensing based on that. For instance, in Sevilla there is a proposal from the city council to limit concentrations of tourist apartments to a maximum of 10%. Cádiz already has such regulations in place.
Regulating tourist apartments is nothing new. Barcelona has had a licensing system – although rather leaky – since 2012. What is new is both the sense of urgency and the spread of the sentiment to regions where tourism has provided substantial source of income and employment.
The underlying theme to all this is the lack of affordable, long term rental housing in Spain and a growing sense that the country is becoming over-saturated with tourism, leading to a decline in the quality of life for Spanish residents.
Saturation Point
A recent study by Exceltur, a non-profit association of leading Spanish tourism companies, takes a very detailed look at the issue, in order to advocate for what they believe is an urgent need for change. According to the study, the number of tourist accommodation places in Spain’s 20 largest cities nearly doubled between 2010 and 2019, from 346,921 to 788,136. Tourist apartments account for a massive 82% of this growth.
There are regulations in some places, such as Barcelona where the official number of tourist apartments have been frozen for a decade. But by and large, the picture is one of uncontrolled expansion.
This growth has put immense pressure on residents in tourist neighbourhoods.In some locales, such as La Merded in Malaga, the number of tourist apartment places per 100 inhabitants reaches as high as 192. In other words, tourists outnumber residents by 2-to-1. That impacts everything from the services and stores that are available but also housing prices and availability. In those areas where tourist apartments are heavily concentrated, housing prices have risen far more rapidly than in areas of low tourist apartment density.
Again, according to theExceltur study, rents in heavily touristed neighbourhoods have increase by an average of 9.1% between 2010 and 2019, compared to just 0.5% in non-tourist areas. That has incentivized landlords to replace long term rentals with higher profit tourist rentals. The combination of high rents and landlords taking long term apartments off the market, has led to the displacement of residents. The population of long-term residents in highly touristed neighbourhoods has declined by an average of 2.7% in the same period.
Residents are feeling that subjectively as well. Almost 78% of tourist neighbourhood residents believe that tourist apartments have made housing less affordable and 68.4% believe that they have increased the local cost of living. Besides the impact on affordability, there is also a substantial impact on the livability of neighbourhoods where tourism dominates. Amongst those who share buildings with tourist apartments 65% report having noise issues, 54.6% cite cleanliness problems in common areas, and 47.7% feeling less secure in their own homes.
What is the Cure?
Every level of government is now acknowledging that there is a problem that needs addressing. Spain’s Housing and Urban Agenda Minister Isabel Rodríguez, has called for controls on tourist apartments. This is good and should be welcomed. You can’t fix a problem that you don’t address. However, what exactly that will look like is unclear as so much is currently in flux.
In some cities, such as Valencia, tourist apartment licenses will not be transferrable to new owners and no new licenses will be granted in the old city. In Barcelona an increase in a tourist tax was introduced in March to increase the funds available to deal with strains on local infrastructure. There is also a lot of talk about a shift towards “quality tourism”, though it isn’t always clear what is meant by that. Often it seems to be about focusing on luxury accommodations such as 4-5 star hotels.
It’s true that, in raw numbers, having tourists who spend more money on luxury hotels and Michelin starred restaurants means more money spent per person. But what of all those businesses that don’t cater to the wealthy – and their employees? In other words, this is a thorny problem with a lot of moving parts. One area that ought to be more straightforward to relieve pressure would be to increase the amount of high quality, low cost rental housing.
The reality is that Spain is woefully under-building affordable housing and has been for a long time. For instance, as an article in The Local from April noted:
However, Spain currently lags behind the rest of EU when it comes to state-controlled social housing making up just 2.5 percent of the total, while in countries such as the Netherlands (30 percent), Austria (24 percent) and Denmark (20.9 percent) it is ten times that or more. In fact, even with the Socialist government’s promise of providing 184,000 affordable housing units for rent, the number of legally registered holiday lets in Spain is far higher than that: 340,000.
The result of this lack of affordable rental housing is that 41% of tenants spend over 40% of their income in housing costs. The stories from places like Mallorca of the conditions in which tourism workers must live – even in vans and cars – because of a lack of housing, are appalling.
Likely, what we will see for the moment is a series of temporary measures in major tourist centers, tightening restrictions on new tourist apartments, and then a wide range of experiments to find a solution. Some of those will help, some won’t. But, in the end, until some core problems are resolved, such as the lack of housing construction, economic diversification to reduce the importance of tourism’s weight in the country’s GDP, these crises will recur. I’m hopeful that the current moment is opening a real debate and discussion that will move us towards real solutions.
By Adam Neale | Property News | June 10th, 2024
