Why do they raise my rent so much? Causes, myths and traps
Rosario, Cristina and Raquel have had to move from their apartments. They could not afford the rent increase or they could not find a home they could afford in their neighborhood. Berta and Aurora suffer a situation of harassment to continue in their homes and reject an exorbitant increase in prices with a contract in force. Neus and Óscar fight because an investment fund does not kick them out of their building. Stories of tenants who see the right to housing threatened with the situation of the rental market Why? How did we get here? Experts from all sectors put the focus on three factors and analyze their effects.
Bubble or problem of supply and demand?
To place issues on the media agenda one of the battles is always linguistic. Labeling or categorizing the problem helps to develop a speech but also to direct the debate. Real estate portals and tenant unions differ when it comes to framing the market situation: boom or bubble? In the opinion of Julio Rodríguez, of Economists facing the crisis, it is not rigorous to speak of the second because "rent is a yield and not the price of an asset". The former president of Banco Hipotecario de España does appreciate that cities such as Madrid or Barcelona are close to a localized bubble situation. "They are experiencing very strong and intense increases, but this is not the case in all of Spain." Rodríguez considers that there is an excess of demand and the supply has been reduced. "There is a greater demand arising from the fact that there is more badly paid employment and a lower supply derived from tourist flats and the sale of owners who now find selling more attractive than renting".
According to the Fotocasa report on the rental market in the last four years, prices increased by 49% in Catalonia and by 27% in Madrid. The national average is around 18%. For its spokesperson, Beatriz Toribio, the increase part of 2013, where historical lows are reached, and attributed to several factors. "The first is a demand issue, which is now much higher than the offer for different reasons: On the one hand, there are many people who can not afford to buy a home because of their economic or work situation; investor who is betting on the purchase to put the house for rent attracted by the high returns of the market ". To these arguments adds the change of mentality in Spain. "There is a more positive image of the rent, the flexibility and freedom that this type of life offers is highly valued, which changes the profile of the person who rents". From their website they prefer to talk about boom because, he says, it is impossible to speculate with the rent. "If the market asks for a lower price, you'll have to adjust to it and that profitability will be reduced, it's not like when it was sold in a short period at a higher price." David Herencia, commercial director of Idealista, expresses himself in this same line. "We always say that there is no bubble because we differentiate it from the real estate that once had the purchase, this has an investment component and with the rent, the tenant does not expect any return, is limited to their economic capacity. to arrive and what I can pay according to my salary ". Coincides with Fotocasa in that it is due to an offer that does not meet the demand and the inability of many people to access the purchase, and warns of a change in trend. "The prices in Barcelona have dropped slightly in 2017. If it is confirmed in the following quarters, it could be touching ceiling This would contradict the bubble theory because it has a limit and there comes a time when if the house is not rented, the owner drop the price".
Since the tenants' unions reject this argument as reductionist and ask to put the focus on the speculative issue. "The supply and demand is a myth that we have to insist a lot on dismantling.In the previous real estate bubble, in the purchase of owned flats, there had never been so much supply." The empty flats that remained afterwards prove it. Not necessarily because there are a lot of offers lower prices, sometimes it is the opposite for the expectations of profit ", explains Irene Sabaté, one of the spokespersons of the Sindicat de Llogaters, who defends to move the debate to how a good of the first should be governed need as housing. "It does not have to be a market like other things, for example, we have assumed that the price of medicines is regulated, since the price of housing should also be regulated to guarantee the exercise of that right." The sociologist Javier Gil focuses on the large owners and the number of empty flats. "The problem is that the offer is very controlled because the big holders of housing are the SAREB, the banks and the vulture funds." In Spain there are no official data, the administration recognizes as valid the figures of the real estate portals, and, in his opinion, this contributes to generate expectations. "It activates a machinery to talk about a simple increase in rental prices, which means that if you have a flat, you can upload it, and if you live rent, you think it is a better time to buy a house. public that everything is going well, "he laments.
The law of urban leases
In 2013, the PP, with its absolute majority, reformed the law governing the rental market alone. It reduced the minimum duration of contracts from five to three and deleted the recommendation to update prices according to the CPI. A regulation tailored to the owner that now, before the exorbitant increase in prices, the opposition tries to modify the requests of some municipalities. "The law had a meaning, was to encourage more rental offers to appear, in that aspect it could encourage more during the crisis, the recession, for some people to rent when they only wanted to sell. of the houses have gone up, they can already sell, and it is clear that people are looking to put tourist flats to get more profitability, possibly this law is creating negative consequences ", analyzes Julio Rodríguez. The economist points out in particular two perverse effects that he urgently needs to correct immediately. "By reducing the term, owners can freely raise the price, the lack of a benchmark is a bad joke for the tenant, and also, if the landlord has not registered the contract in a register and sells the house, the new The landlord can throw the tenant who is with his papers in order miserably on the street. "
For the tenant unions, repealing this legislation is a priority. They place the LAU at the origin of this "bubble" and consider that it facilitates the expulsion of the tenants by drastically reducing their rights. "The law is modified to help the banks and the SAREB, which become the leading real estate companies in the country, in the context of the bubble in 2008 and the fall in rental prices. According to them, it is easier for an owner to encourage them to put a flat in rent, but they do not want the classes measured with an extra floor to introduce it to the market, "says Javier. Gil. The researcher of the UNED believes that this law seeks to give greater fluidity to react to market changes and also eliminates the right of first refusal if your 'landlord' sells the apartment. "Everything is designed to encourage a bubble in the rental sector and greater profitability in the sector." The anthropologist Irene Sabaté shares her diagnosis. "The bank saw itself with many flats in its possession, a huge stock of empty flats, and it presses in the form of a lobby to regulate it to the extent that the contracts last long enough to generate a rotation that revalues those flats", what sum the irruption of the Socimi (Listed Companies of Real Estate Investment). "They pay 0% in corporate tax and many attract international and national speculative capital that is wreaking havoc on the right to housing."
The real estate portals understand that the law is positive for both parties. "Instead of using the IPC as a reference to put the price on the lease of the contract, it allows other systems to be used.