The Balearic government has asked for 56 'major owners' empty homes!

The government of The Balearic Islands has announced its plans to request the rent of 56 empty houses spread across Mallorca, Menorca and Ibiza for seven years. Similar measures are reportedly being studied in other regions such as the Community of Valencia. houses for sale

The housing policy is transferred to the 17 autonomous regions of Spain, so that the regional governments can regulate housing markets within the Spanish constitutional limits. This power was used by the Balearic government to pass a Housing Act in 2018 which permits it to temporarily requested houses on the 'speculative market' and forcing owners to supply them with low-market rents or penalties as affordable housing. This law was invoked in 56 vacancies owned by "major owners" who have been defined as owners of 10 or more properties and who will now have to rent them to tenants under local authorities terms.

Empty houses are defined as properties empty "without justification" for two years or more. The government claims that 700 households in the region falling under this class have been identified, out of a total of 6,000 households belonging to banks, investment funds, developers and private individuals owning 10 or more properties.

In accordance with the law, at the start of the 7-year term the government will pay the owners a total of €1.8 million to cover the rent, but the owners have to put up the cash to make the properties habitable and to cover all management and maintenance costs.

The Balearic government claims that it will pay a rent "significantly inferior" to the rate of €624/month identified by the government's Madrid rental index. That means private owners expect the government's housing bill to be subsidized by private owners. The Government of Mallorca is to pay 408€/m for 27 residencies, 336€/m in 13 residences in Menorca and 520€/m for 6 residences in Ibiza, making up the difference, if any, between the paid rent and the capacity of the tenants to pay that never should exceed 30% of the household income.

The government expects owners to lodge a legal appeal against this measure, but argues that it can still make proceedings while the judicial appeal is lodged.

Official statements show that the Bealearic government is proud to be the first region to oblige owners to rent vacant properties below market rates. Josep Marí, Balearic Housing and Mobility Councilor, said that this is a pioneering measure across the country, while claiming other regions are far behind the Balearics.

But the Spanish property portal Idealista's news service reports that several other regions like the Valencian Community, the Basque Country and Catalonia have housing legislation contemplating, under differing circumstances, temporary confiscation of private property for affordable housing and closely monitor developments in the Balearic Islands. It may not be long before other regions come along.

Private property associations like Asval Landlords' Association say these actions will reduce investment in housing and lead over time to a chronic shortage of affordable homes.