Can Barcelona Solve One of the Toughest Housing Crises in Europe?-OxBig News Network

In 33 years, Marga Aguilar never missed a rent payment on her apartment in a Modernist-style building in the heart of Barcelona. The owner of the building had always treated her and the other tenants as if they were family, and kept rents reasonable.

But when the owner died recently, Ms. Aguilar, 62, got a brutal awakening. A Dutch investment fund swooped in to buy the building, — called Casa de la Papallona because it is crowned with a mosaic sculpture of a butterfly — with plans to convert the apartments into lucrative temporary rentals. Tenants received eviction notices, asking them to leave the next month.

“My legs started to buckle,” said Ms. Aguilar, whose 92-year-old father had moved in with her during the pandemic. “We don’t know where we’re going to go — we can’t afford to live anywhere else.”

Spain is confronting a housing crisis that has rapidly become one of the most acute in Europe. Since 2015, nearly one-tenth of the country’s housing stock has been plucked by investors or converted to tourist rentals. The scarcity has helped drive up prices much faster than wages, making affordable homes out of reach for many.

The problem is complex, perhaps no more so than in Barcelona, which has become ground zero for Spain’s housing dilemma — and a crucible for the challenges of trying to fix it. And with the summer tourist season fast approaching, the city is facing more urgency to find solutions.

Despite efforts to help residents attain affordable housing, investors have found ways to get around restrictions. As authorities scramble to address the scale of the predicament, experts warn it will take time to turn around a problem that has been years in the making.

“Housing must be a right, not a business,” said Salvador Illa, the president of Catalonia, the Spanish region that encompasses Barcelona. “The need to address it is urgent.”

Barcelona’s woes mirror the pain lashing European cities: Residential real estate has increasingly been turned into financial assets by investors. A surge in global tourism and workers crossing borders has landlords favoring short-term rentals over protected long-term tenants. Cities need more homes, but high costs and complex regulations have stifled construction. A once-vaunted stock of social housing to shelter struggling families has shrunk after governments sold them to raise cash.

The affordability problem has become one of the biggest drivers of inequality in Europe. Rents in the European Union rose 20 percent in 10 years, and house prices have surged by half, according to Eurostat. In 2023, one in 10 Europeans spent 40 percent or more of his or her income on housing.

Hoping to reverse the trend, Ursula von der Leyen, the president of the European Commission, the executive arm of the European Union, recently appointed Europe’s first housing commissioner.

In Barcelona, the situation is viewed as so critical that the mayor, Jaume Collboni, has joined with his counterparts in 14 other European cities, including Amsterdam, Budapest, Paris and Rome, to urge Brussels to treat the crisis with the same urgency as defense for Ukraine.

“Europe is facing a threat on our borders” from Russia’s aggression, Mr. Collboni said in an interview from his ornate office overlooking Plaça Sant Jaume in the historic center of Barcelona. “But we are also facing an internal threat, which is rising inequality due to the lack of affordable housing.”

Other European cities have been hit by the housing crunch, but Barcelona has been whipped by it. This sun-kissed city, boasting the Sagrada Familia cathedral and La Rambla promenade, draws around 15 million tourists annually. Tens of thousands of foreign workers have immigrated recently, bolstering the economy but adding to the squeeze.

The right to housing is protected in Spain’s Constitution. But rental prices have increased 57 percent in the country since 2015 and home prices 47 percent, while household income has grown just 33 percent, according to PwC. In Barcelona alone, rents surged 68 percent in a decade.

Mr. Collboni, a Socialist politician elected in 2023, moved swiftly to apply solutions, starting with the imposition of rental price caps last March. Since then, rents have fallen more than 6 percent on average. After a stormy year in which angry Spaniards held mass protests for affordable housing, Barcelona will become the first European city to end licenses for Airbnb homes, requiring owners by 2028 to offer them as long-term lodging at capped rents or put them up for sale.

“In one shot, boom: We’ll put 10,000 flats back on the open market,” Mr. Collboni said. “That’s nearly 25,000 people who will be able to live in Barcelona again.”

In addition, the Catalonia government has rolled out plans to team up with developers to build 50,000 affordable homes by 2030. It is also pushing to cut approval times for construction permits in half. “When the market is broken, you need to intervene,” Mr. Illa said.

But housing activists say those measures do nothing to solve an immediate crunch. They are pressing the government instead to compel landlords and banks holding defaulted mortgages to put a cache of four million empty homes in Spain — around 75,000 of them in Barcelona — to use for long-term rentals.

“People are being forced out of their homes every day, and this is an immediate solution,” said Max Carbonell, a spokesman for the Socialist Union of Housing in Catalonia, which helps renters grappling with eviction by confronting companies buying their homes. “Why build when you have housing that’s already there?”

The Catalan government has sought other ways to keep renters in their homes, including buying some buildings from investors. Last year, it spent 9 million euros to repurchase Casa Orsola, a historic residence snapped up by the Spanish investor Lioness Inversiones in 2021 for €6 million.

But housing activists and renters protested the move, saying that investors causing the pain were profiting from taxpayer money.

But property owners say regulations have become so protective of renters that many owners prefer to leave homes empty. “There is a lack of housing because developers, homeowners and landlords have been criminalized,” said Jesús Encinar, the founder of Idealista, Spain’s biggest real estate search website.

The tension can be seen in a national law that Mr. Collboni called “a black hole” that leaves residents of buildings like Casa de la Papallona vulnerable. The law allows investors to buy buildings to convert to temporary rentals, which offer leases of less than a year. Spain’s prime minister, Pedro Sánchez, introduced a bill to kill the law, but it faces opposition from lawmakers concerned about property rights.

New Amsterdam Developers, the fund that bought Casa de la Papallona, also known as Casa Fajol, has acquired hundreds of other Barcelona apartments for such use, often aimed at business travelers whose finances outstrip those of locals. The company did not respond to requests for comment.

In a nearby neighborhood, Inmobiliaria Gallardo, a developer run by a family that owns Almirall, one of Spain’s largest pharmaceutical companies, took advantage of a loophole in Catalonia’s housing laws that opened briefly in 2023 to obtain licenses to convert all 120 residential apartments in an 11-story building into tourist rentals.

“We noticed one day that some of our neighbors were moving out, then more and more — in one week, 10 people left,” said Maite Martín, 63, a university employee who has lived in the building for 25 years.

A quarter of all the apartments now lodge vacationers. The company did not respond to requests for comment.

“This was a community of families and older people who lived here for decades,” Ms. Martín said while sitting at her table with two neighbors who said they were surrounded by strangers. “That fabric is being destroyed,” she added.

Ms. Martín recently had to clean vomit off laundry drying on her balcony from partying tourists renting above her. Aided by the housing union, residents of her building as well as some tenants in Casa de la Papallona have decided to remain in their homes as a form of protest.

Occupying properties has become a grass-roots movement in Spain to protest the housing crunch, especially in Barcelona, whose former mayor, Ada Colau, was elected on a housing activism platform. But a backlash has been forming, and the Catalan government has sought to counter the movement.

Amid the turmoil, the government is pressing ahead with building more homes. On a hill above the center of Barcelona, construction workers were busy one recent weekday pouring concrete and installing lighting, kitchens, showers and stairs in the shell of a five-story building atop land set aside by the Catalonian government.

A private construction company, Arcadia PLA, had won an €1.8 million public tender to create 15 energy-efficient, rent-capped apartments housing up to 60 people. Thirty similar projects are in the pipeline, many of them bigger buildings of 60 apartments, part of the broader plan to expand the region’s social housing park, said Carles Mas, an architect for the Catalonia government overseeing the site.

Yet given the magnitude of the crisis, more needs to be done, he said. “We need to find ways to move faster.”

José Bautista contributed reporting.