The rent increase limit indicates possible changes to the future housing law

The economic shock plan approved by the government on Tuesday in response to the war in Ukraine replaces some of the essential guidelines that the coalition executive has so far set in regulating housing. They can point to the direction of parliamentary elaboration of the future housing law, which has just begun in Congress.

The plan to respond to the aftermath of the war, which plans to mobilize up to 16,000 million euros, includes a “historic” event that does not involve a single euro increase in government spending and is dedicated to “protecting the people who hire them.” houses”. This is a 2% limit on three months of lease revaluation. The limit to be applied to lease contracts that are updated from the publication of the Royal Decree Law in the Official Gazette (BOE) containing it until 30 June.

According to the second vice-president and Minister of Labor, Yolanda Diaz, this restriction is aimed at “sending a message to homeowners” and also “to those who rent.” “Housing is a ‘fundamental right’ and ‘rent is sometimes impossible’,” Diaz told a news conference after the Council of Ministers.

Parliamentary groups are calling for more ambition

For payment purposes, in the face of a rising index – 7.6% in February and 9.8% in March, as announced this Wednesday – the government has introduced two safeguards for tenants that go further than the bill provides. The right to housing prepared in Monclo and which, in part, includes the claims of social groups, tenants’ associations and parliamentary groups whose votes are necessary to enforce the law.

Especially since the negotiations can not be stalled in time. The government intends to pass the law by the end of the year, as promised by Brussels as part of a restoration plan linked to the receipt of European funds.

The ERC, for example, not only demanded that the government make a written commitment to respect autonomous powers in housing matters – these are communities that have the power to legislate – but also urged them to go further in the process. Rental of rental prices.

Más País leader Inigo Erehon also criticized the project “it was so decaffeinated that it is a glass of water”. Despite this criticism, he voted for the return changes introduced by PP, Ciudadanos, PNV, PDeCAT and Junts, which made it possible to continue processing the text and change it in Congress. In the same vein, Compromise MP Joan Baldow. “This is not the law we want,” he said. “We will be very demanding” during processing.

Hats for rent for large landowners, individuals and businesses

One of the lines the government has crossed in the emergency response plan in response to the war is to clarify who is the major landlord who can limit the rent they have imposed on their tenants.

The draft Housing Law identifies large owners as individuals and legal entities who own more than 10 properties or more than 1,500 square meters of living space, with the exception of garages and storerooms in any case. However, by limiting the latter, apartment owners representing foundations or companies, price restrictions are increasing.

In addition, the text processed by Congress only addresses certain geographic areas that highlight rents – price increases of 5% more than the CPI of the autonomous community where they are located – and will also be linked to a price index that has not yet been determined.

On the other hand, the shock plan, which limits price increases to 2% – in principle, until June – is planned for all large owners, regardless of whether they are individuals or legal entities; And there are no territorial restrictions, nor are there areas with more or less tense prices.

Limiting the increase to 2% is also one of the issues that the union of tenants and logothetes demanded to be included in the law, this Thursday the trade unions will present the proposed changes in the text to the Congress of Deputies. Among them, they indicate that they include a 2% limit.

In addition, trade unions have already offered this limit in other cases. For example, at a meeting they held a few weeks ago at the Ministry of Transport, Mobility and Urban Agenda with Minister Raquel Sanchez and Housing Secretary David Luca.

This use of IGC will be an alternative to the price index provided by law and it is not known how it will be developed if the Treasury, INE data is taken into account; Or also autonomous communities on which lease bond records depend. The government initially gave itself up to 18 months after the law was passed to create and approve this index.

One limit with two speeds

Technically, the 2% growth limit will have two speeds: it will be automatically linked to the General Competitiveness Index (IGC) in the case of large owners; In the case of small landlords, they will have to renegotiate with the tenants. That is, the latter may agree to this revision of more than 2%. However, always with a 2% limit, if there is no agreement, it is the same as the IGC itself.

In most rental contracts, the annual renewal is currently linked to the overall CPI, which in turn is the maximum limit at which rent can be revised upwards, although this is not the only indicator by which the law allows them to be indexed. Leases can, in fact, never be renewed until they are in effect unless otherwise stated.

When this is projected, it is done against the general CPI, or, in some cases, at least, according to various sources in the real estate sector, towards the CPI for rental housing, which has hardly tightened in recent months. , Or with respect to IGC, which is also calculated by INE if an annual update is collected but not a reference.

This last index will be the only reference from the promulgation of the Royal Decree until June 30th.

For example, in Spain the average rent, which is around € 700, will increase by only € 14 in the coming months (2%) and not by € 53.2, which is what happens if the reference is to the CPI for February, at 7.6 above. % And this is that this measure will free the tenants who will renew the rent for the next three months, although the revised rents from October have already increased by more than 5%, also increased the main supplies: electricity, gas …

Another example, according to the February CPI, if you take into account the average rent in Madrid or Barcelona, ​​which according to the index calculated by the Real Estate Portal is around 1,200 euros: this implies an increase of 91.2 euros per month. Nearly 1,100 euros over the next year. Practically another extra monthly payment. Under the shock plan, this increase is limited to 24 euros per month or up to 288 euros per year.