The fallacy of rent regulation in Spain: how the 2023 housing law worsens the real estate market crisis

Abstract

The Housing Law 12/2023, enacted on May 24, was introduced as a solution to improve housing accessibility in Spain. However, this article argues that rent regulation does not solve the problem but rather exacerbates the housing crisis. By analyzing international cases such as Berlin, San Francisco, and Sweden, it is demonstrated that state intervention in price control leads to a reduction in supply, discourages investment, and fosters the black market. Additionally, the article examines the negative effects of the 2023 Housing Law, including violations of property rights, reduced incentives for small landlords, and increased legal uncertainty. Finally, the study proposes alternative measures to enhance housing accessibility without distorting the market, such as tax incentives for landlords, stronger legal security, the promotion of new housing developments, and a comprehensive reform of real estate taxation. These approaches aim to balance the housing market and ensure real accessibility without resorting to state interventions that have proven counterproductive.